SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report October 19, 2001 ---------------- (Date of earliest event reported) VISTEON CORPORATION ------------------- (Exact name of registrant as specified in its charter) Delaware 1-15827 38-3519512 -------- ------- ---------- (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 5500 Auto Club Drive, Dearborn, Michigan 48126 ------------------------------------------ --------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (800)-VISTEON -------------
- 2 - ITEM 5. OTHER EVENTS. On October 19, 2001, we issued a press release concerning our third quarter 2001 earnings. The press release, filed as Exhibit 20 to this Current Report on Form 8-K, is incorporated herein by this reference. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Exhibit No. Description 20 Press release dated October 19, 2001
- 3 - SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VISTEON CORPORATION Date: October 19, 2001 By: /s/ Stacy L. Fox ---------------------------------- Stacy L. Fox Senior Vice President, General Counsel and Secretary
- 4 - EXHIBIT INDEX Exhibit No. Description Page Exhibit 20 Press Release dated October 19, 2001
EXHIBIT NO. 20 Contacts: Media Inquiries: Carly Lamprecht Visteon Corporation 313-755-0879 Public Affairs clamprec@visteon.com 5500 Auto Club Drive Dearborn, MI 48126 Facsimile 313-755-7983 Liane Smyth 313-755-2916 lsmyth1@visteon.com Investor Inquiries: Derek Fiebig 313-755-3699 dfiebig@visteon.com NEWS RELEASE [VISTEON LOGO] IMMEDIATE RELEASE VISTEON CORPORATION REPORTS THIRD QUARTER RESULTS DEARBORN, Mich., October 19, 2001 - Visteon Corporation (NYSE: VC) today announced a Third Quarter loss of $95 million or $0.74 per share. Excluding restructuring actions, the loss was $74 million or $0.57 per share. Visteon earned $48 million or $0.37 per share in the Third Quarter of 2000. "It was a difficult quarter. Our results reflect unexpected and sharp production cuts late in the quarter, accompanied by an unfavorable vehicle production mix," said Peter J. Pestillo, Chairman and Chief Executive Officer. "On the positive side, strong new business wins continue and our aggressive program of cutting costs and spending will make us stronger in the future." Third Quarter sales were $3.7 billion, down $682 million compared with the same period last year. Nearly all the decrease is accounted for by lower Ford revenue. Despite lower industry volumes and unfavorable currency changes, non-Ford revenue for the quarter was down only $12 million from a year ago, as new business growth continued. The decline in operating earnings compared with a year ago was more than accounted for by sharply lower volume and price reductions provided to the company's customers. The company noted that actions taken to reduce cost and spending mitigated the volume and price reductions substantially. In the Third Quarter, cost reductions totaled about $190 million, offsetting more than 40 percent of the decline. 1.
NEWS RELEASE During the Third Quarter of 2001, Visteon recorded a charge of $21 million after taxes, related to voluntary hourly employee separation programs to improve the performance of its Nashville Glass plant. Third Quarter operating cash flow was $258 million negative, reflecting primarily the impact of the mid-September production cuts on earnings and inventory. Visteon ended the quarter in a solid financial position with almost $1 billion in cash and marketable securities. Sales for the first nine months of 2001 totaled $13.4 billion, down $1.6 billion from the same period a year ago. The company incurred a loss of $104 million or $0.80 per share for the first nine months of this year. Excluding restructuring costs, the company earned $17 million or $0.13 per share in the first nine months of the year. This compares with net income of $357 million or $2.75 per share for the first nine months of 2000. So far this year, Visteon has won $1.6 billion in net new business from more than a dozen global automakers in every region of the world. Approximately 75 percent of the wins were with customers other than Ford and 28 percent were outside of North America. Recent announcements include new business wins with DaimlerChrysler on Mercedes Benz trucks and substantial systems on new vehicles including the Renault Clio, Ford Thunderbird and Ford Fiesta. "Because of the uncertain industry outlook, it is difficult to forecast what our near-term results will be," said Pestillo. "However, we are leaving no stone unturned in terms of containing costs and spending and putting in place actions that will help us weather a moderate downturn without sacrificing future growth." Visteon expects to provide a Fourth Quarter earnings outlook later in the quarter. Visteon Corporation is a leading full-service supplier that delivers consumer-driven technology solutions to automotive manufacturers worldwide and through multiple channels within the global automotive aftermarket. Visteon has about 80,000 employees and a global delivery system of more than 160 technical, manufacturing, sales, and service facilities located in 25 countries. This press release contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as "estimated" and "potentially" signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2001. Should any risks and uncertainties develop into actual events, these developments could have material adverse effects on Visteon's business, financial condition and results of operations. ### Additional financial detail is available at www.visteon.com 2.
VISTEON CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DATA (IN MILLIONS, EXCEPT PER SHARE AMOUNTS, PERCENTAGES AND AS NOTED) 2001 OVER/(UNDER) 2001 2000 ---------------------- ---------------------- THIRD FIRST THIRD FIRST QUARTER NINE MONTHS QUARTER NINE MONTHS ------- ----------- ------- ----------- SALES (UNAUDITED) Ford and affiliates $ 3,005 $ 10,985 $ (670) $(1,737) Other customers 717 2,365 (12) 149 ------- -------- ------- ------- Total sales $ 3,722 $ 13,350 $ (682) $(1,588) ======= ======== ======= ======= DEPRECIATION AND AMORTIZATION Depreciation $ 150 $ 432 $ 3 $ (14) Amortization 22 78 (2) 11 ------- -------- ------- ------- Total depreciation and amortization $ 172 $ 510 $ 1 $ (3) ======= ======== ======= ======= SELLING, ADMINISTRATIVE AND OTHER EXPENSES* Amount $ 176 $ 545 $ (7) $ (7) Percent of revenue 4.7 % 4.1 % 0.5 pts 0.4 pts INCOME (LOSS) BEFORE INCOME TAXES As reported $ (146) $ (148) $ (228) $ (733) Excluding restructuring costs* (112) 44 (194) (541) NET INCOME (LOSS) As reported $ (95) $ (104) $ (143) $ (461) Excluding restructuring costs* (74) 17 (122) (340) EARNINGS (LOSS) PER SHARE (BASIC AND DILUTED) As reported $ (0.74) $ (0.80) $ (1.11) $ (3.55) Excluding restructuring costs* (0.57) 0.13 (0.94) (2.62) CASH DIVIDENDS PER SHARE $ 0.06 $ 0.18 $ - N/A EFFECTIVE TAX RATE 37 % 37 % - pts - pts EBITDA* Amount $ 75 $ 597 $ (189) $ (530) Percent of revenue 2.0 % 4.5 % (4.0) pts (3.0) pts AFTER TAX RETURNS* On sales (1.8)% 0.3 % (3.0) pts (2.2) pts On assets (2.4) 0.4 (4.3) (3.8) On equity (8.8) 0.7 (14.1) (18.1) CAPITAL EXPENDITURES Amount $ 176 $ 516 $ (43) $ 13 Percent of revenue 4.7 % 3.9 % (0.3) pts 0.5 pts OPERATING CASH FLOW** $ (258) $ (384) $ (729) $ (503) CASH AND BORROWING (AT END OF PERIOD) Cash and marketable securities $ 978 $ (338) Borrowing 1,988 (18) - - - - - * Third quarter of 2001 and year-to-date 2001 amounts exclude costs related to restructuring items of $34 million ($21 million after-tax) and $192 million ($121 million after-tax) in the third quarter and first nine months of 2001, respectively, of which $81 million was recorded as selling, administrative and other expense in the second quarter of 2001. ** Includes capital expenditures and excludes restructuring/independence actions.
VISTEON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000 (IN MILLIONS, EXCEPT PER SHARE AMOUNTS) THIRD QUARTER FIRST NINE MONTHS ------------------- ------------------- 2001 2000 2001 2000 ---- ---- ---- ---- (UNAUDITED) (UNAUDITED) SALES Ford and affiliates $ 3,005 $ 3,675 $ 10,985 $12,722 Other customers 717 729 2,365 2,216 ------- ------- -------- ------- Total sales 3,722 4,404 13,350 14,938 COSTS AND EXPENSES (NOTES 2 AND 3) Costs of sales 3,677 4,128 12,829 13,772 Selling, administrative and other expenses 176 183 626 552 ------- ------- -------- ------- Total costs and expenses 3,853 4,311 13,455 14,324 OPERATING INCOME (LOSS) (131) 93 (105) 614 Interest income 13 21 46 73 Interest expense 33 40 105 127 ------- ------- -------- ------- Net interest expense (20) (19) (59) (54) Equity in net income of affiliated companies 5 8 16 25 ------- ------- -------- ------- INCOME (LOSS) BEFORE INCOME TAXES (146) 82 (148) 585 Provision (benefit) for income taxes (57) 27 (61) 209 ------- ------- -------- ------- INCOME (LOSS) BEFORE MINORITY INTERESTS (89) 55 (87) 376 Minority interests in net income of subsidiaries 6 7 17 19 ------- ------- -------- ------- NET INCOME (LOSS) $ (95) $ 48 $ (104) $ 357 ======= ======= ======== ======= Average number of shares of Common Stock outstanding (Note 4) 130 131 131 130 EARNINGS (LOSS) AND DIVIDENDS PER SHARE (NOTE 4) Basic and diluted $ (0.74) $ 0.37 $ (0.80) $ 2.75 Cash dividends $ 0.06 $ 0.06 $ 0.18 $ 0.06 The accompanying notes are part of the financial statements.
VISTEON CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (IN MILLIONS) SEPTEMBER 30, DECEMBER 31, 2001 2000 --------------- ---------------- (UNAUDITED) ASSETS Cash and cash equivalents $ 881 $ 1,412 Marketable securities 97 65 -------- -------- Total cash and marketable securities 978 1,477 Accounts receivable - Ford and affiliates 1,625 1,333 Accounts receivable - other customers 839 857 -------- -------- Total receivables 2,464 2,190 Inventories (Note 5) 1,022 948 Deferred income taxes 194 192 Prepaid expenses and other current assets 165 198 -------- -------- Total current assets 4,823 5,005 Equity in net assets of affiliated companies 151 142 Net property 5,451 5,497 Deferred income taxes 249 100 Other assets 546 581 -------- -------- TOTAL ASSETS $ 11,220 $ 11,325 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Trade payables $ 1,869 $ 1,949 Accrued liabilities 943 1,086 Income taxes payable 23 65 Debt payable within one year 616 622 -------- -------- Total current liabilities 3,451 3,722 Long-term debt 1,372 1,397 Other liabilities 3,041 2,683 Deferred income taxes 18 18 -------- -------- Total liabilities 7,882 7,820 STOCKHOLDERS' EQUITY Capital stock Preferred Stock, par value $1.00, 50 million shares authorized, none outstanding - - Common Stock, par value $1.00, 500 million shares authorized, 131 million shares issued, 130 million and 131 million shares outstanding, respectively 131 131 Capital in excess of par value of stock 3,310 3,311 Accumulated other comprehensive income (201) (179) Other (28) (12) Earnings retained for use in business 126 254 -------- -------- Total stockholders' equity 3,338 3,505 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,220 $ 11,325 ======== ======== The accompanying notes are part of the financial statements.
VISTEON CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000 (IN MILLIONS) FIRST NINE FIRST NINE MONTHS 2001 MONTHS 2000 ----------- ----------- (UNAUDITED) CASH AND CASH EQUIVALENTS AT JANUARY 1 $ 1,412 $1,849 Cash flows provided by (used in) operating activities 62 (922) Cash flows from investing activities Capital expenditures (516) (503) Purchases of securities (240) (126) Sales and maturities of securities 210 - Acquisitions and investments in joint ventures, net (5) (30) Other 39 (14) ------- ------ Net cash used in investing activities (512) (673) Cash flows from financing activities Cash distributions from prior owner - 85 Commercial paper issuances, net 1 302 Payments on short-term debt - (1,775) Proceeds from issuance of short-term debt 1 1,374 Proceeds from issuance of other debt 95 1,212 Principal payments on other debt (124) (185) Purchase of treasury stock (25) - Cash dividends (24) (8) Other 2 (86) ------- ------ Net cash (used in) provided by financing activities (74) 919 Effect of exchange rate changes on cash (7) 17 ------- ------ Net decrease in cash and cash equivalents (531) (659) ------- ------ CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 881 $1,190 ======= ====== The accompanying notes are part of the financial statements.
VISTEON CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. FINANCIAL STATEMENTS - The financial data presented herein are unaudited, but in the opinion of management reflect those adjustments, including normal recurring adjustments, necessary for a fair presentation of such information. Results for interim periods should not be considered indicative of results for a full year. Reference should be made to the consolidated financial statements and accompanying notes included in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, as filed with the Securities and Exchange Commission on February 27, 2001. Certain amounts for prior periods were reclassified to conform with present period presentation. Visteon Corporation ("Visteon") is a leading, global supplier of automotive systems, modules and components. Visteon sells products primarily to global vehicle manufacturers, and also sells to the worldwide aftermarket for replacement and vehicle appearance enhancement parts. Visteon became an independent company when Ford Motor Company ("Ford") established Visteon as a wholly-owned subsidiary in January 2000 and subsequently transferred to Visteon the assets and liabilities comprising Ford's automotive components and systems business. Ford completed its spin-off of Visteon on June 28, 2000 (the "spin-off"). Prior to incorporation, Visteon operated as Ford's automotive components and systems business. 2. SELECTED COSTS AND EXPENSES are summarized as follows: THIRD QUARTER FIRST NINE MONTHS ----------------- -------------------- 2001 2000 2001 2000 ---- ---- ---- ---- (IN MILLIONS) Depreciation $ 150 $ 147 $ 432 $ 446 Amortization 22 24 78 67 ----- ----- ----- ----- Total $ 172 $ 171 $ 510 $ 513 ===== ===== ===== ===== 3. SPECIAL CHARGES - During the third quarter of 2001, Visteon recorded a pre-tax charge of $34 million related to special voluntary retirement and separation programs offered to hourly employees located at Visteon's Nashville Glass plant. This action resulted in the separation of about 245 employees during the third quarter of 2001. As of September 30, 2001, Visteon has spent or utilized about $24 million related to this charge, which consists of amounts incurred related to special pension and other postretirement benefits, with the majority of the remaining charge expected to be spent in the fourth quarter of 2001. The pre-tax charge of $34 million ($21 million after-tax) is recorded in costs of sales and by the Glass Operations segment. During the second quarter of 2001, Visteon recorded a pre-tax charge of $146 million related to the elimination of more than 2,000 salaried positions worldwide. About 90% of the separations were completed in the second quarter of 2001 and 5% in the third quarter of 2001. The remaining separations are expected to be completed prior to the end of 2001. In addition, Visteon recorded a pre-tax charge in the second quarter of 2001 of $12 million related to the planned closure of two European facilities, ZEM in Poland and Wickford in the U.K., and other actions. Of the total pre-tax charges of $158 million ($100 million after-tax), $81 million is recorded in selling, administrative and other expenses and $77 million is recorded in costs of sales, and $142 million is recorded by the Automotive Operations segment and $16 million is recorded by the Glass Operations segment. During the third quarter of 2001, Visteon spent about $38 million mainly for severance pay. As of September 30, 2001, Visteon has spent or utilized about $125 million related to these charges, which includes $70 million of cash payments, $50 million incurred related to special pension and other postretirement benefits and $5 million related to the non-cash write-down to fair value of certain plant assets. Visteon recorded a pre-tax charge of approximately $13 million ($8 million after-tax) and $5 million ($3 million after-tax) in the second and third quarters of 2000, respectively, for Visteon employees that were part of special voluntary retirement and separation programs.
VISTEON CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (UNAUDITED) 4. INCOME (LOSS) PER SHARE OF COMMON STOCK - Basic income per share of common stock is calculated by dividing the income attributable to common stock by the average number of shares of common stock outstanding during the applicable period, adjusted for restricted stock. The average number of shares of restricted stock outstanding was about 1,730,000, 1,320,000, 870,000 and 310,000 for the third quarter of 2001, first nine months of 2001, third quarter of 2000 and first nine months of 2000, respectively. The calculation of diluted income per share takes into account the effect of dilutive potential common stock, such as stock options and restricted stock. For the third quarter and first nine months of 2001 potential common stock of about 697,000 and 367,000 shares, respectively, are excluded as the effect would have been antidilutive. For purposes of the earnings per share calculations, 130 million shares of common stock are treated as outstanding for periods prior to the spin-off from Ford. 5. INVENTORIES are summarized as follows: SEPTEMBER 30, DECEMBER 31, 2001 2000 --------------- ---------------- (IN MILLIONS) Raw materials, work-in-process and supplies $ 875 $ 829 Finished products 147 119 ------- ----- Total inventories $ 1,022 $ 948 ======= ===== U.S. inventories $ 636 $ 586 6. COMPREHENSIVE INCOME (LOSS) - Other comprehensive income mainly includes foreign currency translation adjustments. Total comprehensive income is summarized as follows: THIRD QUARTER FIRST NINE MONTHS ----------------- -------------------- 2001 2000 2001 2000 ---- ---- ---- ---- (IN MILLIONS) Net income (loss) $(95) $ 48 $(104) $357 Other comprehensive income (loss) 45 (85) (22) (143) ---- ---- ----- ---- Total comprehensive income (loss) $(50) $(37) $(126) $214 ==== ==== ===== ==== 7. ACCOUNTING CHANGE - Visteon adopted Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities," on January 1, 2001. SFAS 133 (as amended by SFAS 137 and 138) establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires recognition of all derivatives as either assets or liabilities on the balance sheet and measurement of the instruments at fair value. The change in fair value of a derivative is required to be recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and if so, the type of hedge transaction. Consistent with the first and second quarters of 2001, the impact of implementing this new standard on Visteon's results of operations and financial condition for the three and nine months ended September 30, 2001 was not material.
VISTEON CORPORATION AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (UNAUDITED) 8. SEGMENT INFORMATION - Visteon's reportable operating segments are Automotive Operations and Glass Operations. Financial information for the reportable operating segments is summarized as follows: AUTOMOTIVE GLASS TOTAL OPERATIONS OPERATIONS VISTEON ---------- ---------- ------- (IN MILLIONS) THIRD QUARTER 2001 Sales $ 3,578 $ 144 $ 3,722 Income (loss) before taxes (112) (34) (146) Net income (loss) (74) (21) (95) Average assets 10,953 367 11,320 2000 Sales $ 4,224 $ 180 $ 4,404 Income before taxes 80 2 82 Net income 46 2 48 Average assets 10,887 574 11,461 FIRST NINE MONTHS 2001 Sales $ 12,866 $ 484 $ 13,350 Income (loss) before taxes (97) (51) (148) Net income (loss) (73) (31) (104) Average assets 10,920 353 11,273 2000 Sales $ 14,357 $ 581 $ 14,938 Income (loss) before taxes 603 (18) 585 Net income (loss) 367 (10) 357 Average assets 11,169 668 11,837