Visteon Reports Third-Quarter 2012 Results

                  Visteon Reports Third-Quarter 2012 Results

PR Newswire

VAN BUREN TOWNSHIP, Mich., Nov. 1, 2012

VAN BUREN TOWNSHIP, Mich., Nov. 1, 2012 /PRNewswire/ -

  oResults in line with company expectations

       oSales of $1.62 billion
       oNet income of $15 million; adjusted EBITDA of $131 million

  oStrong cash performance

       oThird-quarter cash from operations $156 million; up $121 million from
         2011
       oFree cash flow $112 million; up $136 million from 2011
       oTotal cash of $920 million and total debt of $595 million

  oShareholder value creation plan announced Sept. 19

       oCost-reduction program initiated
       oSale of Visteon Climate to Halla Climate Control Corporation on
         target

  oUpdated 2012 guidance – sales projected at upper end of previously
    announced range; adjusted EBITDA mid-point reaffirmed; and free cash flow
    increased

Visteon Corporation (NYSE: VC) today announced third-quarter 2012 results,
which were in line with company expectations, reporting sales of $1.62
billion. Sales were lower compared with the same period in 2011 due to the
October 2011 deconsolidation of Duckyang Industry Co. Ltd. and unfavorable
currency.

(Logo: http://photos.prnewswire.com/prnh/20001201/DEF008LOGO )

Visteon reported net income of $15 million, or $0.28 per diluted share, in the
third quarter of this year, compared with net income of $41 million, or $0.79
per diluted share, in the third quarter of 2011. Third-quarter 2012 adjusted
EBITDA, a non-GAAP financial measure as defined below, was $131 million,
compared with $168 million for the same period last year.

Strong cash performance of $156 million from operating activities resulted in
an increase of $121 million in the third quarter of 2012 compared with the
same period in 2011. Free cash flow, a non-GAAP financial measure as defined
below, of $112 million for the third quarter of 2012 improved by $136 million
compared with the same period in 2011. On a year-to-date basis, Visteon
reported cash from operating activities of $163 million and free cash flow of
$17 million.

"The quarter met our expectations considering the challenging macroeconomic
conditions in Europe, but we are not satisfied with these results," said Tim
Leuliette, who on Sept. 30 was named president and chief executive officer of
Visteon. "We are taking aggressive rightsizing actions to ensure we have an
efficient overhead and operational structure as part of a broad value-creation
strategy for all Visteon stakeholders."

Today Visteon announced its intention to restructure the company, including a
plan to address and rationalize certain underperforming facilities and to
significantly reduce global selling, general and administrative (SG&A) and
other costs. "Year-to-date, we have reduced targeted costs by 7 percent
compared with 2011 levels, but there is more we can and must do," Leuliette
said. The company expects to incur restructuring and other costs of
approximately $100 million with charges beginning in the fourth quarter of
2012. Savings are expected to result in year-over-year improvements in both
2013 and 2014.

On Sept. 19, the company also announced its intention to combine its wholly
owned climate businesses into a single world-class climate organization under
its 70 percent-owned affiliate Halla Climate Control Corporation ("Halla"),
with substantial benefits to both Visteon and Halla. Since the announcement,
significant steps have been taken, including the definition of the transaction
perimeter, commencement of independent valuations and due diligence.

"The sharply focused value-creating actions for customers, partners and
shareholders that were announced in mid-September remain on track, and I'm
pleased with our progress," Leuliette reported. "Specifically, the combination
of Visteon's global climate business with that of our Korean affiliate, Halla
Climate Control, is tracking toward first quarter 2013 completion."

During the third quarter, Visteon announced a lump sum payment option to
certain former U.S. employees who are vested defined benefit plan participants
not currently receiving monthly payments. At current interest rate levels, the
lump sum settlements provide an opportunity for Visteon to significantly
reduce liabilities and administrative costs. The payment option, to be funded
with pension plan assets, is being offered from Oct. 1 to Nov. 9 to nearly
10,000 of the company's 20,000 total U.S. plan participants. Eligible
participants will be given an option to select a lump sum payment, begin an
immediate annuity, or to maintain their existing benefit. A non-cash
settlement charge is expected in the fourth quarter of 2012, resulting from
the lump sum payment. The total charge will depend on the participation rate,
value of assets and discount rate at year-end.

Third Quarter in Review

Sales of $1.62 billion for the third quarter of 2012 decreased $285 million
from $1.90 billion in the same quarter a year earlier. Hyundai-Kia accounted
for approximately 32 percent of Visteon's third-quarter sales, with Ford Motor
Company representing 28 percent, Renault-Nissan 8 percent and PSA
Peugeot-Citroen 4 percent. On a regional basis, Asia accounted for 45 percent
of total product sales, down slightly from 47 percent for the same period last
year, while Europe represented 30 percent – also down slightly from 31 percent
a year earlier. North America represented 19 percent of total product sales
for the third quarter of 2012, compared with 15 percent during the same
quarter last year, and South America accounted for 6 percent, compared with 7
percent in the third quarter of 2011.

Gross margin for the third quarter of 2012 was $129 million, compared with
$139 million a year earlier. Gross margin decreased $10 million
year-over-year, reflecting unfavorable currency and volume, partially offset
by cost efficiencies. SG&A expense of $89 million for the third quarter of
2012 decreased $6 million from a year earlier.

During the third quarter of 2012, Visteon recognized $38 million of equity in
the net income of non-consolidated affiliates, compared with $43 million in
the third quarter of 2011. Visteon's 50 percent-owned affiliate, Yanfeng
Visteon Automotive Trim Systems Co., Ltd. (YFV), and related affiliated
interests contributed $38 million in equity income. On Aug. 31, Visteon
completed the previously announced sale of its 50 percent equity stake in the
R-TEK Ltd. interiors joint venture in the UK for about $30 million. The
company also completed the sale of its lighting product line for approximately
$70 million on Aug. 1.

For the third quarter of 2012, the company reported net income of $15 million,
or $0.28 per diluted share. This compares with net income of $41 million for
the same period of 2011. Adjusted EBITDA for the third quarter of 2012 was
$131 million, compared with $168 million for the same period a year earlier.
On a year-over-year basis, decreases in adjusted EBITDA from unfavorable
currency and volume, and equity in the net income of non-consolidated
affiliates, were partially offset by positive net cost performance.

Segment Results

Climate sales increased by $21 million during the third quarter of 2012
compared with the same quarter last year. Higher production volumes and net
new business increased sales by $92 million, primarily attributable to Asia,
Europe and North America. Unfavorable currency related to the euro, Indian
rupee and Korean won resulted in a decrease of $69 million.

Electronics sales decreased $40 million during the third quarter of 2012,
compared with the third quarter of 2011. Production volume declines, including
the impact of weakened economic conditions in Europe, resulted in a $15
million sales decline. Unfavorable currency, driven by the weakening of the
euro, further decreased sales by $21 million.

Interiors sales decreased during the quarter by $293 million, compared with
the third quarter of 2011. Sales decreased $190 million due to the
deconsolidation of Duckyang. Sales were further decreased by lower production
volumes in Europe, Asia and South America of $28 million, $18 million and $13
million, respectively. Unfavorable currency primarily related to the euro and
Brazilian real decreased sales by $41 million.

First Nine Months of 2012

For the first nine months of 2012, the company reported net income of $61
million, or $1.14 per diluted share. This compares with net income of $106
million, or $2.04 per diluted share, for the same period in 2011. Adjusted
EBITDA for the first nine months of 2012 was $432 million, compared with $531
million for the same period a year earlier.

Cash and Debt Balances

As of Sept. 30, 2012, Visteon had global cash balances of $920 million,
including $19 million of restricted cash. Total debt was $595 million as of
Sept. 30, 2012. Year-to-date through Sept. 30, 2012, free cash flow was $17
million, an improvement of $147 million compared with the first nine months of
2011.

2012 Sales and Earnings Guidance

Visteon has moved its sales guidance for full-year 2012 to the upper end of
the previously announced range and has narrowed the range of previously
announced earnings guidance for 2012. The company expects full-year 2012
product sales to be approximately $6.8 billion and adjusted EBITDA to be in
the range of $590 million to $610 million. The company has increased its free
cash flow guidance and expects to generate positive free cash flow for 2012 in
excess of $25 million.

Share Repurchase Program

On Aug. 2, 2012, Visteon announced a plan to repurchase up to $100 million of
its common shares during the next two years. Visteon did not repurchase any
shares during the third quarter of 2012 due to trading restrictions in August
and September. Future repurchases will be made from time to time in open
market transactions or in privately negotiated transactions. Any future
purchase will take into consideration global macroeconomic conditions,
Visteon's trading value and the assessment of current and future cash needs of
the business.

About Visteon

Visteon is a leading global automotive supplier that designs, engineers and
manufactures innovative climate, interior and electronic products for vehicle
manufacturers. With corporate offices in Van Buren Township, Mich. (U.S.);
Shanghai, China; and Chelmsford, UK; the company has facilities in 28
countries and employs approximately 22,000 people. Learn more at
www.visteon.com.

Conference Call and Presentation

Today, Thursday, Nov. 1, at 8 a.m. ET, the company will host a conference call
for the investment community to discuss the quarter's results and other
related items. The conference call is available to the general public via a
live audio webcast. The dial-in numbers to participate in the call are:

U.S./Canada: 888-452-7086
Outside U.S./Canada: 706-643-3752

(Call approximately 10 minutes before the start of the conference.)

The conference call and live audio webcast, along with the financial results
release, presentation material and other supplemental information, will be
accessible through Visteon's website at www.visteon.com.

Those interested in hearing a replay of the conference call can do so through
the company's website or by calling 855-859-2056 (toll-free if dialing from
the U.S. and Canada) or 404-537-3406 (international). To access the replay by
phone, enter conference ID 35395639. The replay will be available by phone for
one week following the conference call.

Forward-looking Information

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not guarantees of future results and conditions but rather are
subject to various factors, risks and uncertainties that could cause our
actual results to differ materially from those expressed in these
forward-looking statements, including, but not limited to: (1) our ability to
satisfy future capital and liquidity requirements; including our ability to
access the credit and capital markets at the times and in the amounts needed
and on terms acceptable to us; our ability to comply with financial and other
covenants in our credit agreements; and the continuation of acceptable
supplier payment terms; (2) our ability to satisfy pension and other
post-employment benefit obligations; (3) our ability to access funds generated
by foreign subsidiaries and joint ventures on a timely and cost-effective
basis; (4) conditions within the automotive industry, including (i) the
automotive vehicle production volumes and schedules of our customers, and in
particular Ford's and Hyundai-Kia's vehicle production volumes, (ii) the
financial condition of our customers or suppliers and the effects of any
restructuring or reorganization plans that may be undertaken by our customers
or suppliers or work stoppages at our customers or suppliers, and (iii)
possible disruptions in the supply of commodities to us or our customers due
to financial distress, work stoppages, natural disasters or civil unrest; (5)
new business wins and re-wins do not represent firm orders or firm commitments
from customers, but are based on various assumptions, including the timing and
duration of product launches, vehicle production levels, customer price
reductions and currency exchange rates; (6) general economic conditions,
including changes in interest rates, currency exchange rates and fuel prices;
the timing and expenses related to internal restructurings, employee
reductions, acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations; (7) increases in raw material and energy
costs and our ability to offset or recover these costs, increases in our
warranty, product liability and recall costs or the outcome of legal or
regulatory proceedings to which we are or may become a party; and (8) those
factors identified in our filings with the SEC (including our Annual Report on
Form 10-K for the fiscal year ended Dec. 31, 2011).

Caution should be taken not to place undue reliance on our forward-looking
statements, which represent our view only as of the date of this release, and
which we assume no obligation to update. The financial results presented
herein are preliminary and unaudited; final interim financial results will be
included in the company's Quarterly Report on Form 10-Q for the quarter ended
Sept. 30, 2012.

Use of Non-GAAP Financial Information

This press release contains information about Visteon's financial results
which is not presented in accordance with accounting principles generally
accepted in the United States ("GAAP"). Such non-GAAP financial measures are
reconciled to their closest GAAP financial measures at the end of this press
release. The provision of these comparable GAAP financial measures for
full-year 2012 is not intended to indicate that Visteon is explicitly or
implicitly providing projections on those GAAP financial measures, and actual
results for such measures are likely to vary from those presented. The
reconciliations include all information reasonably available to the company at
the date of this press release and the adjustments that management can
reasonably predict.



VISTEON CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Millions, Except Per Share Data)
(Unaudited)
                                        Three Months Ended  Nine Months Ended
                                        September 30        September 30
                                        2012      2011      2012      2011
Sales                                   $ 1,624   $ 1,909   $ 5,034   $ 5,805
Cost of sales                           1,495     1,770     4,643     5,331
Gross margin                            129       139       391       474
Selling, general and administrative     89        95        267       291
expenses
Interest expense                        17        10        39        37
Interest income                         4         5         11        16
Loss on debt extinguishment             4         —         4         24
Equity in net income of                 38        43        183       130
non-consolidated affiliates
Restructuring and other (income)        (11)      1         63        29
expenses
Income from continuing operations       72        81        212       239
before income taxes
Provision for income taxes              33        25        102       87
Income from continuing operations       39        56        110       152
(Loss) income from discontinued         (5)       4         (3)       8
operations, net of tax
Net income                              34        60        107       160
Net income attributable to              19        19        46        54
non-controlling interests
Net income attributable to Visteon      $ 15      $ 41      $ 61      $ 106
Corporation
Per share data:
Basic earnings (loss) per share:
Continuing operations                   $ 0.37    $ 0.72    $ 1.21    $ 1.92
Discontinued operations                 (0.09)    0.08      (0.06)    0.15
Basic earnings attributable to Visteon  $ 0.28    $ 0.80    $ 1.15    $ 2.07
Corporation
Diluted earnings (loss) per share:
Continuing operations                   $ 0.37    $ 0.71    $ 1.20    $ 1.89
Discontinued operations                 (0.09)    0.08      (0.06)    0.15
Diluted earnings attributable to        $ 0.28    $ 0.79    $ 1.14    $ 2.04
Visteon Corporation
Average shares outstanding (in
millions)
Basic                                   53.3      51.5      53.1      51.1
Diluted                                 53.8      52.0      53.5      52.0
Comprehensive income:
Comprehensive income (loss)             $ 96      $ (102)   $ 163     $ 110
Comprehensive income (loss)             $ 63      $ (84)    $ 103     $ 74
attributable to Visteon Corporation





VISTEON CORPORATION AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
                                                     September 30  December 31
                                                     2012          2011
ASSETS
Cash and equivalents                                 $   901       $  723
Restricted cash                                      19            23
Accounts receivable, net                             1,168         1,071
Inventories                                          408           381
Other current assets                                 265           296
Total current assets                                 2,761         2,494
Property and equipment, net                          1,278         1,412
Equity in net assets of non-consolidated affiliates  734           644
Intangible assets, net                               324           353
Other non-current assets                             73            66
Total assets                                         $   5,170     $  4,969
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term debt, including current portion of        $   89        $  87
long-term debt
Accounts payable                                     1,077         1,010
Accrued employee liabilities                         162           189
Other current liabilities                            248           267
Total current liabilities                            1,576         1,553
Long-term debt                                       506           512
Employee benefits                                    413           495
Deferred tax liabilities                             202           187
Other non-current liabilities                        251           225
Shareholders' equity
Preferred stock                                      —             —
Common stock                                         1             1
Stock warrants                                       13            13
Additional paid-in capital                           1,258         1,165
Retained earnings                                    227           166
Accumulated other comprehensive income (loss)        17            (25)
Treasury stock                                       (17)          (13)
Total Visteon Corporation shareholders' equity       1,499         1,307
Non-controlling interests                            723           690
Total shareholders' equity                           2,222         1,997
Total liabilities and shareholders' equity           $   5,170     $  4,969





VISTEON CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
                                         Three Months Ended  Nine Months Ended
                                         September 30        September 30
                                         2012        2011    2012       2011
Operating Activities
Net income                               $  34       $ 60    $  107     $ 160
Adjustments to reconcile net income to
net cash provided from operating
activities:
Depreciation and amortization            64          86      196        248
Equity in net income of
non-consolidated affiliates, net of      27          (5)     (107)      (88)
dividends remitted
Loss on debt extinguishment              4           —       4          24
Other non-cash items                     (9)         10      33         26
Changes in assets and liabilities:
Accounts receivable                      33          64      (58)       (131)
Inventories                              (22)        (10)    (54)       (50)
Accounts payable                         (23)        (98)    41         (19)
Other assets and other liabilities       48          (72)    1          (115)
Net cash provided from operating         156         35      163        55
activities
Investing Activities
Capital expenditures                     (44)        (59)    (146)      (185)
Proceeds from business divestitures      100         —       100        —
Proceeds from asset sales                8           1       88         11
Other                                    —           (8)     (2)        (13)
Net cash provided from (used by)         64          (66)    40         (187)
investing activities
Financing Activities
Short-term debt, net                     (2)         2       2          11
Proceeds from issuance of debt, net of   810         1       812        503
issuance costs
Principal payments on debt               (820)       (7)     (824)      (513)
Cash restriction, net                    —           —       —          52
Rights offering fees                     —           —       —          (33)
Dividends to non-controlling interests   (1)         (5)     (23)       (29)
Other                                    —           3       —          3
Net cash used by financing activities    (13)        (6)     (33)       (6)
Effect of exchange rate changes on cash  13          (44)    8          (9)
and equivalents
Net increase (decrease) in cash and      220         (81)    178        (147)
equivalents
Cash and equivalents at beginning of     681         839     723        905
period
Cash and equivalents at end of period    $  901      $ 758   $  901     $ 758





VISTEON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in Millions)
(Unaudited)



In this press release the Company has provided information regarding certain
non-GAAP financial measures including "Adjusted EBITDA" and "free cash flow."
Such non-GAAP financial measures are reconciled to their closest GAAP
financial measure in the schedules below.

Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the
Company's performance that management believes is useful to investors because
the excluded items may vary significantly in timing or amounts and/or may
obscure trends useful in evaluating and comparing the Company's operating
activities across reporting periods. The Company defines Adjusted EBITDA as
net income attributable to Visteon, plus net interest expense, provision for
income taxes and depreciation and amortization, as further adjusted to
eliminate the impact of asset impairments, gains or losses on divestitures,
net restructuring expenses and other reimbursable costs, certain non-recurring
employee charges and benefits, reorganization items, and other non-operating
gains and losses. Additionally, amounts below are inclusive of the Company's
discontinued operations. Because not all companies use identical calculations
this presentation of Adjusted EBITDA may not be comparable to other similarly
titled measures of other companies.



                            Three Months Ended  Nine Months Ended  Estimated
                            September 30        September 30       Full Year
                            2012        2011    2012       2011    2012
Total Adjusted EBITDA       $  131      $ 168   $  432     $ 531   $590 - $610
 Interest expense, net     13          5       28         21      41
 Loss on debt              4           —       4          24      4
extinguishment
 Provision for income      33          25      102        87      140
taxes
 Depreciation and          64          81      195        232     260
amortization
 Restructuring and other   (11)        1       63         29      80
(income) expenses
 Equity investment gain    —           —       (63)       —       (63)
 Other non-operating       5           8       12         13      13
costs, net
 Discontinued operations   8           7       30         19      30
Net income attributable to  $  15       $ 41    $  61      $ 106   $85 - $105
Visteon Corporation

Adjusted EBITDA is not a recognized term under GAAP and does not purport to be
a substitute for net income as an indicator of operating performance or cash
flows from operating activities as a measure of liquidity. Adjusted EBITDA has
limitations as an analytical tool and is not intended to be a measure of cash
flow available for management's discretionary use, as it does not consider
certain cash requirements such as interest payments, tax payments and debt
service requirements. In addition, the Company uses Adjusted EBITDA (i) as a
factor in incentive compensation decisions, (ii) to evaluate the effectiveness
of the Company's business strategies, and (iii) the Company's credit
agreements use measures similar to Adjusted EBITDA to measure compliance with
certain covenants.

Free Cash Flow: Free cash flow is presented as a supplemental measure of the
Company's liquidity that management believes is useful to investors in
analyzing the Company's ability to service and repay its debt. The Company
defines free cash flow as cash flow provided from (used by) operating
activities less capital expenditures. Because not all companies use identical
calculations, this presentation of free cash flow may not be comparable to
other similarly titled measures of other companies.



                            Three Months Ended  Nine Months Ended  Estimated
                            September 30        September 30       Full Year
                            2012       2011     2012     2011      2012
Cash provided from          $  156     $ 35     $  163   $ 55      $  255    +
operating activities
Capital expenditures        (44)       (59)     (146)    (185)     (230)
Free cash flow              $  112     $ (24)   $  17    $ (130)   $  25     +

Free cash flow is not a recognized term under GAAP and does not purport to be
a substitute for cash flows from operating activities as a measure of
liquidity. Free cash flow has limitations as an analytical tool and does not
reflect cash used to service debt and does not reflect funds available for
investment or other discretionary uses. In addition, the Company uses free
cash flow (i) as a factor in incentive compensation decisions, and (ii) for
planning and forecasting future periods.



SOURCE Visteon Corporation

Website: http://www.visteon.com
Contact: Media, Jim Fisher, +1-734-710-5557, jfishe89@visteon.com or
Investors, Scott Deitz, +1-734-710-2603, sdeitz@visteon.com
 
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