☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

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Item 1.	Consolidated Financial Statements

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The unaudited consolidated financial statements of Visteon Corporation (the "Company" or "Visteon") have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements include all adjustments (consisting of normal recurring adjustments, except as otherwise disclosed) that management believes are necessary for a fair presentation of the results of operations, financial position and cash flows of the Company for the interim periods presented. Interim results are not necessarily indicative of full-year results.

Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported herein. Such estimates and assumptions affect, among other things, the Company’s goodwill and long-lived asset valuation; inventory valuation; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; and credit losses related to our financial assets. Considerable judgment is involved in making these determinations and the use of different estimates or assumptions could result in significantly different results. Management believes its assumptions and estimates are reasonable and appropriate. However, actual results could differ from those reported herein. Events and changes in circumstances arising after March 31, 2020, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

Recently Adopted Accounting Pronouncements:

The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments", effective for fiscal years beginning after December 15, 2019. The guidance requires financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. The guidance also requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the expected increases or decreases of expected credit losses that have taken place during the period. Additionally, the guidance limits the credit loss to the amount by which fair value is below amortized cost.

The Company adopted the guidance effective January 1, 2020. The guidance allows for various methods for measuring expected credit losses. The Company elected to apply a historical loss rate based on historic write offs by region to aging categories. The historical loss rate will be adjusted for current conditions and reasonable and supportable forecasts of future losses as necessary. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements. Accordingly, the allowance for doubtful accounts balance was $ 10 million as of March 31, 2020 and December 31, 2019.

The FASB issued ASU 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes." The new guidance simplifies the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, hybrid taxes and the recognition of deferred tax liabilities for outside basis differences.  It also clarifies and simplifies other aspects of the accounting for income taxes.  For public companies, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years.  Early adoption is permitted in interim or annual periods with any adjustments reflected as of the beginning of the annual period that includes that interim period.  Additionally, entities that elect early adoption must adopt all the amendments in the same period.  Amendments are to be applied prospectively, except for certain amendments that are to be applied either retrospectively or with a modified retrospective approach through a cumulative effect adjustment recorded to retained earnings.  The Company adopted the guidance effective January 1, 2020. The adoption of the guidance did not have a material impact on the Company's consolidated financial statements.

 

Accounting Pronouncements Not Yet Adopted:

In March 2020, the FASB issued ASU 2020-04. "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting ." The guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another rate that is expected to be discontinued. The amendments in the guidance are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impacts of the provisions of ASU 2020-04 on its financial position, results of operations, and cash flows.

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Disaggregated revenue by geographical market and product lines is as follows:

	Three Months Ended March 31
(In millions)	2020				2019
Geographical Markets
Europe	$	254			$	262
Americas	192				190
China Domestic	57				108
China Export	64				69
Other Asia-Pacific	116				157
Eliminations	( 40		)		( 49		)
	$	643			$	737

	Three Months Ended March 31
(In millions)	2020				2019
Product Lines
Instrument clusters	$	312			$	314
Audio and infotainment	145				196
Information displays	109				123
Body and security	25				32
Climate controls	10				21
Telematics	12				11
Other	30				40
	$	643			$	737

During the three months ended March 31, 2020 , revenue recognized related performance obligations satisfied in previous periods represented less than 1 % of consolidated net sales. The Company has no material contract assets, contract liabilities or capitalized contract acquisition costs as of March 31, 2020 .

Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker, the Chief Executive Officer, evaluates the performance of the Company’s segment primarily based on net sales, before elimination of inter-company shipments, Adjusted EBITDA (a non-GAAP financial measure, as defined below) and operating assets. As the Company has one reportable segment, net sales, total assets, depreciation, amortization and capital expenditures are equal to consolidated results.

The Company’s current reportable segment is Electronics, which provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment systems, audio systems, telematics solutions and head-up displays.

Adjusted EBITDA

The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, restructuring expense, net interest expense, equity in net income of non-consolidated affiliates, gain and loss on divestiture, provision for income taxes, discontinued operations, net income attributable to non-controlling interests, non-cash stock-based compensation expense, and other gains and losses not reflective of the Company's ongoing operations.

Adjusted EBITDA is presented as a supplemental measure of the Company's financial 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. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be a substitute for net

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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.

Segment Adjusted EBITDA and reconciliation to net income attributable to Visteon is as follows:

	Three Months Ended March 31
(In millions)	2020				2019
Net income (loss) attributable to Visteon Corporation	$	( 35	)		$	14
Depreciation and amortization	25				25
Non-cash, stock-based compensation expense	5				5
Provision (benefit) for income taxes	5				( 5		)
Interest expense, net	2				2
Net income (loss) attributable to non-controlling interests	( 1		)		2
Restructuring expense, net	33				1
Equity in net income of non-consolidated affiliates	( 1		)		( 3		)
Adjusted EBITDA	$	33			$	41

Basic earnings per share is calculated by dividing net income attributable to Visteon by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding. Performance based share units are considered contingently issuable shares, and are included in the computation of diluted earnings per share based on the number of shares that would be issuable if the reporting date were the end of the contingency period and if the result would be dilutive.

The table below provides details underlying the calculations of basic and diluted earnings per share:

	Three Months Ended March 31
(In millions, except per share amounts)	2020				2019
Numerator:
Net income (loss) attributable to Visteon	$	( 35	)		$	14
Denominator:
Average common stock outstanding - basic	27.9				28.2
Dilutive effect of performance based share units and other	—				0.2
Diluted shares	27.9				28.4
Basic and Diluted Per Share Data:
Basic earnings (loss) per share attributable to Visteon	$	( 1.25	)		$	0.50
Diluted earnings (loss) per share attributable to Visteon:	$	( 1.25	)		$	0.49

Given the economically-sensitive and highly competitive nature of the automotive electronics industry, the Company continues to closely monitor current market factors and industry trends, taking action as necessary which may include 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.

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Electronics

During January 2020, the Company approved a restructuring program impacting primarily European engineering and administrative functions to improve the Company’s efficiency and rationalize its footprint. During the three months ended March 31, 2020 , the Company recorded $ 21 million in relation to the program and expects to incur up to $ 24 million under this program. The total expected costs include employee severance, retention and termination costs. As of March 31, 2020 , $ 20 million remains accrued for the program.

During March 2020, the Company approved a global restructuring program impacting engineering, administrative and manufacturing facilities to improve efficiency and further rationalize the Company’s footprint. During the three months ended March 31, 2020 , the Company recorded $ 11 million in relation to the program and expects to incur up to $ 15 million under this program. The total expected costs include employee severance, retention and termination costs. As of March 31, 2020 , $ 9 million remains accrued for the program.

Additionally, during 2020 the Company recorded and paid $ 1 million related to restructuring expenses at two North American manufacturing facilities.

During the first quarter of 2019, the Company approved a restructuring program impacting two European manufacturing facilities due to the end of life of certain product lines. During the three months ended March 31, 2019 , the Company recorded $ 2 million of restructuring expenses for this program.

During the second quarter of 2018, the Company approved a restructuring program impacting legacy employees at a South America facility and employees at North America manufacturing facilities due to the wind-down of certain products, as of March 31, 2020 , $ 3 million remains accrued related to this program.

During the third quarter of 2018, the Company approved a restructuring program impacting engineering and administrative functions to optimize operations, as of March 31, 2020 , $ 2 million remains accrued for the program.

Other and Discontinued Operations

As of March 31, 2020 , the Company retained restructuring reserves as part of the Company's divestiture of the majority of its global Interiors business (the "Interiors Divestiture") of $ 2 million associated with completed programs for the fundamental reorganization of operations at facilities in Brazil and France.

Restructuring Reserves

Restructuring reserve balances of $ 36 million and $ 10 million as of March 31, 2020 and December 31, 2019 , respectively, are classified as "Other current liabilities" on the consolidated balance sheets. The Company anticipates that the activities associated with the current restructuring reserve balance will be substantially complete by mid-2021. The Company’s consolidated restructuring reserves and related activity are summarized below, including amounts associated with discontinued operations.

(In millions)	Electronics				Other and Discontinued Operations				Total
December 31, 2019	$	8			$	2			$	10
Expense	33				—				33
Utilization	( 6		)		—				( 6		)
Foreign currency	( 1		)		—				( 1		)
March 31, 2020	$	34			$	2			$	36

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Variable Interest Entities

The Company determines whether joint ventures in which it has invested are Variable Interest Entities (“VIE”) at the start of each new venture and when a reconsideration event has occurred. An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Visteon and Yangfeng Automotive Trim Systems Co. Ltd. ("YF") each own 50 % of a joint venture under the name of Yanfeng Visteon Investment Co., Ltd. ("YFVIC"). In October 2014, YFVIC completed the purchase of YF’s  49 % direct ownership in Yanfeng Visteon Automotive Electronics Co., Ltd. ("YFVE") a consolidated joint venture of the Company ("The YFVIC Transaction"). The purchase by YFVIC was financed through a shareholder loan from YF and external borrowings, guaranteed by Visteon, which was paid in 2019.

The Company determined that YFVIC is a VIE. The Company holds a variable interest in YFVIC primarily related to its ownership interests and subordinated financial support. The Company and YF each own 50 % of YFVIC and neither entity has the power to control the operations of YFVIC; therefore, the Company is not the primary beneficiary of YFVIC and does not consolidate the joint venture.

A summary of the Company's investments in YFVIC is provided below:

	March 31				December 31
(In millions)	2020				2019
Payables due to YFVIC	$	9			$	9
Exposure to loss in YFVIC:
Investment in YFVIC	$	43			$	43
Receivables due from YFVIC	28				41
Subordinated loan receivable from YFVIC	6				8
Maximum exposure to loss in YFVIC	$	77			$	92

Inventories, net consist of the following components:

	March 31				December 31
(In millions)	2020				2019
Raw materials	$	115			$	100
Work-in-process	25				28
Finished products	40				41
	$	180			$	169

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Intangible assets, net are comprised of the following:

			March 31, 2020
(In millions)	Estimated Weighted Average Useful Life (years)		Gross Intangibles				Accumulated Amortization				Net Intangibles
Definite-Lived:
Developed technology	5		$	40			$	( 36	)		$	4
Customer related	10		87				( 52		)		35
Capitalized software development	3		37				( 5		)		32
Other	19		15				( 5		)		10
Subtotal			179				( 98		)		81
Indefinite-Lived:
Goodwill			45				—				45
Total			$	224			$	( 98	)		$	126

A roll-forward of the carrying amounts of intangible assets is presented below:

	December 31, 2019												March 31, 2020
(In millions)	Gross Intangibles				Accumulated Amortization				Net Intangibles				Additions				Foreign Currency				Amortization Expense				Net Intangibles
Definite-Lived:
Developed technology	$	40			$	( 35	)		$	5			$	—			$	—			$	( 1	)		$	4
Customer related	89				( 51		)		38				—				( 1		)		( 2		)		35
Capitalized software development	32				( 5		)		27				5				—				—				32
Other	15				( 4		)		11				—				—				( 1		)		10
Subtotal	176				( 95		)		81				5				( 1		)		( 4		)		81
Indefinite-Lived:
Goodwill	46				—				46				—				( 1		)		—				45
Total	$	222			$	( 95	)		$	127			$	5			$	( 2	)		$	( 4	)		$	126

The Company recorded amortization expense of $ 4 million for each three month period ended March 31, 2020 and 2019 related to definite-lived intangible assets. The Company currently estimates annual amortization expense to be $ 15 million , $ 17 million , $ 17 million , $ 14 million , $ 8 million and $ 7 million for the years ended 2020 , 2021 , 2022 , 2023 , 2024 , and 2025 , respectively. Indefinite-lived intangible assets are not amortized but are tested for impairment at least annually, or earlier when events and circumstances indicate that it is more likely than not that such assets have been impaired.

The Company considered the global COVID-19 pandemic as a possible indicator of impairment for all its long-lived assets. The Company concluded that its long-lived assets were not impaired as of March 31, 2020 .

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Other current assets are comprised of the following components:

	March 31				December 31
(In millions)	2020				2019
Recoverable taxes	$	62			$	61
Prepaid assets and deposits	30				22
Joint venture receivables	28				41
Contractually reimbursable engineering costs	25				29
China bank notes	19				16
Royalty agreements	10				17
Other	3				7
	$	177			$	193

The Company sold $ 27 million and $ 23 million of China bank notes during the three months ended March 31, 2020 and 2019 respectively. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. As of March 31, 2020 , $ 24 million remains outstanding and will mature by the end of the third quarter of 2020.

Other non-current assets are comprised of the following components:

	March 31				December 31
(In millions)	2020				2019
Deferred tax assets	$	56			$	59
Contractually reimbursable engineering costs	33				24
Recoverable taxes	21				28
Royalty agreements	14				11
Joint venture notes receivables	6				8
Other	20				20
	$	150			$	150

During 2019, the Company amended royalty agreements with certain suppliers as part of cost reduction efforts. As of March 31, 2020, $ 10 million was recorded in other current assets and $ 14 million in other non-current assets, with an offsetting amount of $ 14 million in accounts payable and $ 7 million in other non-current liabilities relating to these agreements. The Company recorded $ 4 million of royalty expense during the three months ended March 31, 2020 associated with such arrangements.

Current and non-current contractually reimbursable engineering costs are related to pre-production design and development costs incurred pursuant to long-term supply arrangements that are contractually guaranteed for reimbursement by customers. The Company expects to receive cash reimbursement payments of $ 19 million during the remainder of 2020 , $ 15 million in 2021 , $ 14 million in 2022 , $ 3 million in 2023 and $ 7 million in 2024 and beyond.

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The Company’s short and long-term debt consists of the following:

	March 31				December 31
(In millions)	2020				2019
Short-Term Debt:
Short-term borrowings	$	36			$	37
Long-Term Debt:
Term debt facility, net	$	348			$	348
Revolving credit facility	400				—
Total long-term debt, net	$	748			$	348

Short-Term Debt

Short-term borrowings are primarily related to the Company's non-U.S. joint ventures and are payable in Chinese Renminbi and India Rupee. As of March 31, 2020 , the available borrowings under these affiliate credit facilities are $ 117 million . Certain of these facilities have pledged assets as security or accompanied by corporate credit support.

Long-Term Debt

On March 19, 2020, the Company borrowed the entire amount of revolving loans available under the Revolving Credit Facility to increase its cash position and maximize its flexibility in light of the current uncertainty surrounding the impact of COVID-19. As of March 31, 2020, the Company had $ 350 million of Term Facility loans and $ 400 million of Revolving Credit Facility loans outstanding under the Company's credit agreement (the "Credit Agreement"), both facilities will mature during 2024.

Interest on the Term Facility loans accrue at a rate equal to a LIBOR-based rate plus an applicable margin of 1.75 % per annum. Revolving Credit Facility loans accrue interest at a rate equal to a LIBOR-based rate plus an applicable margin of between 1.00 % - 2.00 % , as determined by the Company's total gross leverage ratio. As of March 31, 2020, the all-in rates for the Term Facility and Revolving Credit Facility loans were 2.79 % and 2.49 % , respectively.

The Credit Agreement requires compliance with customary affirmative and negative covenants and contains customary events of default.  The Revolving Credit Facility also requires that the Company maintain a total net leverage ratio no greater than 3.50 : 1.00 . During any period when the Company’s corporate and family ratings meet investment grade ratings, certain of the negative covenants shall be suspended. As of March 31, 2020, the Company was in compliance with all its debt covenants. 

The Revolving Credit Facility also provides $ 75 million availability for the issuance of letters of credit and a maximum of $ 20 million for swing line borrowings.  Any amount of the facility utilized for letters of credit or swing line loans outstanding will reduce the amount available under the existing Revolving Credit Facility. The Company may request increases in the limits under the Credit Agreement and may request the addition of one or more term loan facilities. Outstanding borrowings may be prepaid without penalty (other than borrowings made for the purpose of reducing the effective interest rate margin or weighted average yield of the loans). There are mandatory prepayments of principal in connection with: (i) excess cash flow sweeps above certain leverage thresholds, (ii) certain asset sales or other dispositions, (iii) certain refinancing of indebtedness and (iv) over-advances under the Revolving Credit Facility. There are no excess cash flow sweeps required at the Company’s current leverage level.

All obligations under the Credit Agreement and obligations with respect to certain cash management services and swap transaction agreements between the Company and its lenders are unconditionally guaranteed by certain of the Company’s subsidiaries. Under the terms of the Credit Agreement, any amounts outstanding are secured by a first-priority perfected lien (subject to certain exceptions) on substantially all property of the Company and the subsidiaries party to the security agreement, subject to certain limitations. 

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Other

The Company has a $ 5 million letter of credit facility, whereby the Company is required to maintain a cash collateral account equal to 103 % ( 110 % for non-U.S. dollar denominated letters) of the aggregate stated amount of issued letters of credit and must reimburse any amounts drawn under issued letters of credit. The Company had $ 2 million of outstanding letters of credit issued under this facility secured by restricted cash, as of March 31, 2020 . Additionally, the Company had $ 12 million of locally issued letters of credit with less than $ 1 million of collateral as of March 31, 2020 , to support various tax appeals, customs arrangements and other obligations at its local affiliates.

Other current liabilities are summarized as follows:

	March 31				December 31
(In millions)	2020				2019
Restructuring reserves	$	36			$	10
Product warranty and recall accruals	35				34
Deferred income	19				22
Royalties	17				19
Non-income taxes payable	12				17
Joint venture payables	9				9
Income taxes payable	5				7
Dividends payable to non-controlling interests	2				3
Other	27				26
	$	162			$	147

Other non-current liabilities are summarized as follows:

	March 31				December 31
(In millions)	2020				2019
Product warranty and recall accruals	$	14			$	15
Derivative financial instruments	12				14
Deferred income	8				9
Royalty agreements	7				13
Income tax reserves	5				5
Non-income tax reserves	1				1
Other	12				15
	$	59			$	72

During 2019, the Company amended royalty agreements with certain suppliers as part of cost reduction efforts. As of March 31, 2020, $ 10 million was recorded in other current assets and $ 14 million in other non-current assets, with an offsetting amount of $ 14 million in accounts payable and $ 7 million in other non-current liabilities relating to these agreements. The Company recorded $ 4 million of royalty expense during the three months ended March 31, 2020 associated with such arrangements.

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Defined Benefit Plans

The Company's net periodic benefit costs for all defined benefit plans for the three month periods ended March 31, 2020 and 2019 were as follows:

	U.S. Plans								Non-U.S. Plans
(In millions)	2020				2019				2020				2019
Costs Recognized in Income:
Pension financing benefits (cost):
Interest cost	$	( 6	)		$	( 8	)		$	( 2	)		$	( 2	)
Expected return on plan assets	10				10				2				2
Restructuring related pension cost:
Special termination benefits	( 1		)		—				—				—
Net pension benefit (cost)	$	3			$	2			$	—			$	—

Pension financing benefits of $ 4 million and $ 2 million for the three months ended March 31, 2020 and 2019, respectively are classified as Other income, net on the Company's Consolidated Statement of Operations.

Required 2020 contributions to the Company's defined benefit plans are approximately $ 20 million . The Company is currently evaluating opportunities to defer some or all of its 2020 contributions pursuant to relief measures offered by the U.S. and U.K. governments in light of COVID-19.

During the three month period ended March 31, 2020 , the Company recorded a provision for income tax on continuing operations of $ 5 million , which reflects income tax expense in 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 pretax losses and/or recognize expense for pretax income in certain jurisdictions (including the U.S.) due to valuation allowances; and other non-recurring tax items, including changes in judgment about valuation allowances. Pretax losses from continuing operations in jurisdictions where valuation allowances are maintained and no income tax benefits are recognized totaled $ 52 million and $ 13 million for the three month periods ended March 31, 2020 and 2019 , respectively, resulting in an increase in the Company's effective tax rate in those years.

The Company's provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against income before income taxes, excluding equity in net income of non-consolidated affiliates for the period. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained. In determining the estimated annual effective tax rate, the Company analyzes various factors, including but not limited to, forecasts of projected annual earnings, taxing jurisdictions in which the pretax income and/or pretax losses will be generated, available tax planning strategies and estimated impacts attributable to the Tax Cuts and Jobs Act of 2017 (the "Act"). The changing and volatile macro-economic conditions connected with the COVID-19 pandemic may cause fluctuations in forecasted earnings before income taxes. As such, the Company's effective tax rate could be subject to volatility as forecasted earnings before income taxes are impacted by events which cannot be predicted. The Company’s estimated annual effective tax rate is updated each quarter and may be significantly impacted by changes to the mix of forecasted earnings by tax jurisdiction. The tax impact of adjustments to the estimated annual effective tax rate are recorded in the period such estimates are revised. The Company is also required to record the tax impact of certain other non-recurring tax items, including changes in judgment about valuation allowances and uncertain tax positions, and changes in tax laws or rates, in the interim period in which they occur, rather than include them in the estimated annual effective tax rate.

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 quarterly and annual effective tax rates. Full valuation allowances against deferred tax assets in the U.S. and applicable foreign countries will be maintained until sufficient positive evidence exists to reduce or eliminate them. The factors considered by management in its determination of the probability of the realization of the deferred tax assets include, but are not limited to, recent historical financial results, historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, tax planning strategies and projected future impacts attributable to the Act. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation

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allowance is recorded. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses, in particular, when there is a cumulative loss incurred over a three-year period. However, the three-year loss position is not solely determinative and, accordingly, management considers all other available positive and negative evidence in its analysis. In regards to the full valuation allowance recorded against the U.S. net deferred tax assets, despite recent improvement in the U.S. financial results, management concluded that the weight of negative evidence continues to outweigh the positive evidence, as the impact of COVID-19 reinforces the prevailing uncertainty surrounding global production volumes in 2020 that had already showed signs of softening which contributed to the reduction in the U.S. profitability during 2019. These factors further contribute to the relative uncertainty surrounding the ability that the U.S. operations will demonstrate sustained profitability in the future. Additionally, the Company has made a policy election to apply the incremental cash tax savings approach when analyzing the impact the Act's provisions for global intangible low-taxed income ("GILTI") could have on its U.S. valuation allowance assessment. As a result of future expected GILTI inclusions, and because of the Act’s ordering rules, U.S. companies may now expect to utilize tax attribute carryforwards (e.g. net operating losses and foreign tax credits) for which a valuation allowance has historically been recorded (this is referred to as the “tax law ordering approach”). However, due to the mechanics of the GILTI rules, companies that have a GILTI inclusion may realize a reduced (or no) cash tax savings from utilizing such tax attribute carryforwards (this view is referred to as the “incremental cash tax savings approach”). These positions, along with management’s analysis of all other available evidence, resulted in the conclusion that the Company maintain the valuation allowance against deferred tax assets in the U.S. Based on the Company’s current assessment, it is possible that within the next 12 to 24 months, the existing valuation allowance against the U.S. net deferred tax assets could be partially released. Any such release is dependent upon the sustained improvement in U.S. operating results, and, if such a release of the valuation allowance were to occur, it could have a significant impact on net income in the quarter in which it is deemed appropriate to partially release the reserve.

In March 2019, the closure of tax audits in Germany allowed the Company to initiate a tax planning strategy previously determined not to be prudent. This strategy provided the necessary positive evidence to support the future utilization of a portion of the Company's deferred tax assets in Germany resulting in a $ 12 million valuation allowance release during the three months ended March 31, 2019.

Unrecognized Tax Benefits

Gross unrecognized tax benefits as of March 31, 2020 and December 31, 2019 , including amounts attributable to discontinued operations, were $ 13 million in both years. Of these amounts, approximately $ 6 million in both years represent the amount of unrecognized benefits that, if recognized, would impact the effective tax rate. 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. If the uncertainty is resolved while a full valuation allowance is maintained, these uncertain tax positions should not impact the effective tax rate in current or future periods. The Company records interest and penalties related to uncertain tax positions as a component of income tax expense and related amounts accrued at March 31, 2020 and December 31, 2019 was $ 2 million in both years.

With few exceptions, the Company is no longer subject to U.S. federal tax examinations for years before 2014, or state, local or non-U.S. income tax examinations for years before 2003, although U.S. net operating losses carried forward into open tax years technically remain open to adjustment. Although it is not possible to predict the timing of the resolution of all ongoing tax audits with accuracy, it is reasonably possible that certain tax proceedings in the U.S., Europe, Asia and Mexico could conclude within the next twelve months and result in a significant increase or decrease in the balance of gross unrecognized tax benefits. 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. The long-term portion of uncertain income tax positions (including interest) in the amount of $ 5 million is included in "Other non-current liabilities" on the consolidated balance sheet, while $ 3 million is reflected as a reduction of a deferred tax asset related to a net operating loss included in Other-non current assets on the consolidated balance sheet.

During 2012, Brazil tax authorities issued tax assessment notices to Visteon Sistemas Automotivos (“Sistemas”) related to the sale of its chassis business to a third party, which required a deposit in the amount of $ 15 million during 2013 necessary to open a judicial proceeding against the government in order to suspend the debt and allow Sistemas to operate regularly before the tax authorities after attempts to reopen an appeal of the administrative decision failed. Adjusted for currency impacts and accrued interest, the deposit amount is $ 11 million as of March 31, 2020 . The Company believes that the risk of a negative outcome is remote once the matter is fully litigated at the highest judicial level. These appeal payments, as well as income tax refund claims associated with other jurisdictions, total $ 14 million as of March 31, 2020 , and are included in "Other non-current assets" on the consolidated balance sheets.

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Share Repurchase Program

During 2019, the Company purchased a total of 322,120 shares of Visteon common stock at an average price of $ 62.06 for an aggregate purchase amount of $ 20 million pursuant to various programs with third-party financial institutions.

During the three months ended March 31, 2020 , the Company purchased a total of 233,769 shares of Visteon common stock at an average price of $ 67.87 for an aggregate purchase amount of $ 16 million pursuant to an agreement with a third-party financial institution.

As of March 31, 2020 , $ 364 million is available for additional share repurchases under the Board of Directors authorization which expires on December 31, 2020. The Company currently does not intend to repurchase additional shares.

 

Non-Controlling Interests

The Company's non-controlling interests are as follows:

	March 31				December 31
(In millions)	2020				2019
Yanfeng Visteon Automotive Electronics Co., Ltd.	$	48			$	56
Shanghai Visteon Automotive Electronics, Co., Ltd.	41				41
Changchun Visteon FAWAY Electronics, Co., Ltd.	17				17
Other	1				1
	$	107			$	115

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Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated other comprehensive income (loss) (“AOCI”) and reclassifications out of AOCI by component include:

	Three Months Ended March 31
(In millions)	2020				2019
Changes in AOCI:
Beginning balance	$	( 267	)		$	( 216	)
Other comprehensive income (loss) before reclassification, net of tax	( 37		)		5
Amounts reclassified from AOCI	—				( 1		)
Ending balance	$	( 304	)		$	( 212	)
Changes in AOCI by Component:
Foreign currency translation adjustments
Beginning balance	$	( 153	)		$	( 142	)
Other comprehensive loss before reclassification, net of tax (a)	( 38		)		—
Ending balance	( 191		)		( 142		)
Net investment hedge
Beginning balance	4				( 5		)
Other comprehensive income before reclassification, net of tax (a)	9				7
Amounts reclassified from AOCI	( 1		)		( 1		)
Ending balance	12				1
Benefit plans
Beginning balance	( 114		)		( 71		)
Other comprehensive income before reclassification, net of tax (b)	1				—
Amounts reclassified from AOCI	1				—
Ending balance	( 112		)		( 71		)
Unrealized hedging gain (loss)
Beginning balance	( 4		)		2
Other comprehensive loss before reclassification, net of tax (c)	( 9		)		( 2		)
Ending balance	( 13		)		—
Total AOCI	$	( 304	)		$	( 212	)

(a) There were no income tax effects for either period due to the valuation allowance.

(b) Net tax expense was less than $ 1 million related to benefit plans for the three months ended March 31, 2020 and 2019 .

(c) There were no income tax effects related to unrealized hedging gain (loss) for either period due to the valuation allowance.

Fair Value Measurements

The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. 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 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.

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Items Measured at Fair Value on a Recurring Basis

The Company is exposed to various market risks including, but not limited to, changes in currency exchange rates arising from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt, dividends and investments in subsidiaries. The Company manages these risks, in part, through the use of derivative financial instruments. The maximum length of time over which the Company hedges the variability in the future cash flows related to transactions, excluding those transactions as related to the payment of variable interest on existing debt, is eighteen months. The maximum length of time over which the Company hedges forecasted transactions related to variable interest payments is the term of the underlying debt.

Hedge instruments are measured at fair value on a recurring basis 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 or may derived from observable data. Accordingly, the Company's currency instruments are classified as Level 2, "Other Observable Inputs" in the fair value hierarchy.

The Company presents its derivative positions and any related material collateral under master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. Derivative financial instruments are included in the Company’s consolidated balance sheets. There is no cash collateral on any of these derivatives.

Currency Exchange Rate Instruments: The Company primarily uses forward contracts denominated in Euro, Japanese Yen, Thai Baht and Mexican Peso intended to mitigate the variability of cash flows denominated in currency other than the hedging entity's functional currency.

As of March 31, 2020 and December 31, 2019 , the Company had foreign currency derivative instruments with aggregate notional value of $ 38 million and $ 8 million , respectively. At March 31, 2020, approximately $ 15 million of the hedge instruments have been designated as cash flow hedges. Accordingly, the total change in fair value of these transactions are recognized in other comprehensive income, a component of shareholders' equity. Upon settlement of the transactions, the accumulated gains and losses are reclassified to income in the same periods during which the hedged cash flows impact earnings. The fair value of these derivatives is a liability of $ 1 million and a liability of less than $ 1 million , as of March 31, 2020 and December 31, 2019 , respectively. The difference between the gross and net value of these derivatives after offset by counter party is not material. As of March 31, 2020, a loss of $ 2 million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next 12 months related to these designated hedges.

Cross Currency Swaps: The Company has executed cross-currency swap transactions intended to mitigate the variability of the U.S. dollar value of its investment in certain of its non-U.S. entities. These transactions are designated as net investment hedges and the Company has elected to assess hedge effectiveness under the spot method. Accordingly, periodic changes in the fair value of the derivative instruments attributable to factor other than spot exchange rate variability are excluded from the measure of hedge ineffectiveness and reported directly in earnings each reporting period.

As of March 31, 2020 and December 31, 2019 , the Company had cross currency swaps with an aggregate notional value of $ 250 million . The aggregate fair value of these derivatives is a non-current asset of $ 2 million as of March 31, 2020 and a non-current liability of $ 6 million as of December 31, 2019 . As of March 31, 2020, a gain of $ 7 million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next 12 months.

Interest Rate Swaps: The Company utilizes interest rate swap instruments to manage its exposure and to mitigate the impact of interest rate variability. The instruments are designated as cash flow hedges, accordingly, the effective portion of the periodic changes in fair value is recognized in accumulated other comprehensive income, a component of shareholders' equity. Subsequently, the accumulated gains and losses recorded in equity are reclassified to income in the period during which the hedged cash flow impacts earnings.

As of March 31, 2020 and December 31, 2019 , the Company had an aggregate notional value of interest rate swap transactions of $ 250 million . The aggregate fair value of these derivative transactions is a non-current liabilities of $ 13 million and $ 7 million as of March 31, 2020 and December 31, 2019 , respectively. As of March 31, 2020 , a loss of $ 6 million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next 12 months.

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Financial Statement Presentation

Gains and losses on derivative financial instruments for the three months ended March 31, 2020 and 2019 are as follows:

	Recorded Income (Loss) into AOCI, net of tax								Reclassified from AOCI into Income (Loss)								Recorded in Income (Loss)
(In millions)	2020				2019				2020				2019				2020				2019
Three months ended March 31,
Foreign currency risk - Cost of sales:
Cash flow hedges	$	( 2	)		$	—			$	—			$	—			$	—			$	—
Non-designated cash flow hedges	—				—				—				—				—				1
Interest rate risk - Interest expense, net:
Interest rate swap	( 7		)		( 2		)		—				—				—				—
Net investment hedges	9				7				1				1				—				—
	$	—			$	5			$	1			$	1			$	—			$	1

Items Not Carried at Fair Value

The Company's fair value of debt was $ 730 million and $ 390 million as of March 31, 2020 and December 31, 2019 , respectively. Fair value estimates were based on the current rates offered to the Company for debt of the same remaining maturities. Accordingly, the Company's debt fair value disclosures are classified as Level 2, "Other Observable Inputs" in the fair value hierarchy.

Investments

In 2018, the Company committed to make a $ 15 million investment in two entities principally focused on the automotive sector pursuant to limited partnership agreements. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount. As of March 31, 2020 , the Company has contributed a total of $ 3 million toward the aggregate investment commitments. The Company does not have significant influence in either partnership. These investments are carried at cost and evaluated for impairment on an annual basis.

Concentrations of Credit Risk

Financial instruments including cash equivalents, derivative contracts, and accounts receivable, expose the Company to counter-party credit risk for non-performance. The Company’s counterparties for cash equivalents and derivative contracts are banks and financial institutions that meet the Company’s credit rating requirements. 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 pursuant to written policies that specify minimum counterparty credit profile and by limiting the concentration of credit exposure amongst its multiple counterparties.

The Company's credit risk with any single customer does not exceed ten percent of total accounts receivable except for Ford and its affiliates which represent 19 % and 22 % , and Renault/Nissan which represents 6 % and 13 % , of the balance as of March 31, 2020 and December 31, 2019 , respectively.

The Company completed the sale of the majority of its global Climate business (the "Climate Transaction") during 2015 and completed the divestiture of its global Interiors Divestiture during 2016. These transactions met the conditions required to qualify for discontinued operations reporting and accordingly the settlement of retained contingencies have been classified in income from discontinued operations, net of tax, in the consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 .

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Discontinued operations are summarized as follows:

	Three Months Ended March 31
(In millions)	2020				2019
Cost of sales	$	—			$	( 1	)
Restructuring, net	—				1
Income from discontinued operations, net of tax	$	—			$	—

In 2003, the Local Development Finance Authority of the Charter Township of Van Buren, Michigan issued approximately $28 million in bonds finally maturing in 2032, the proceeds of which were used at least in part to assist in the development of the Company’s U.S. headquarters located in the Township. During January 2010, the Company and the Township entered into a settlement agreement (the “Settlement Agreement”) that, among other things, reduced the taxable value of the headquarters property to current market value. The Settlement Agreement also provided that the Company would negotiate in good faith with the Township, pursuant to the terms of the Settlement Agreement, in the event that property tax payments were inadequate to permit the Township to meet its payment obligations with respect to the bonds. In October 2019, the Township notified the Company that the Township had incurred a shortfall under the bonds of less than $1 million and requested that the Company meet to discuss payment. The parties met in November 2019 but no agreement was reached. On December 9, 2019, the Township commenced litigation against the Company in Michigan’s Wayne County Circuit Court claiming damages of $ 28 million related to what the Township alleges to be the current shortfall and projected future shortfalls under the bonds. The Company disputes the factual and legal assertions made by the Township and intends to defend the matter vigorously. The Company is not able to estimate the possible loss or range of loss in connection with this matter.

In November 2013, the Company and Halla Visteon Climate Control Corporation (“HVCC”), jointly filed an Initial Notice of Voluntary Self-Disclosure statement with the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) regarding certain sales of automotive HVAC components by a minority-owned, Chinese joint venture of HVCC into Iran. The Company updated that notice in December 2013, and subsequently filed a voluntary self-disclosure regarding these sales with OFAC in March 2014. In May 2014, the Company voluntarily filed a supplementary self-disclosure identifying additional sales of automotive HVAC components by the Chinese joint venture, as well as similar sales involving an HVCC subsidiary in China, totaling $ 12 million , and filed a final voluntary-self disclosure with OFAC on October 17, 2014. OFAC is currently reviewing the results of the Company’s investigation. Following that review, OFAC may conclude that the disclosed sales resulted in violations of U.S. economic sanctions laws and warrant the imposition of civil penalties, such as fines, limitations on the Company's ability to export products from the United States, and/or referral for further investigation by the U.S. Department of Justice. Any such fines or restrictions may be material to the Company’s financial results in the period in which they are imposed, but is not able to estimate the possible loss or range of loss in connection with this matter. Additionally, disclosure of this conduct and any fines or other action relating to this conduct could harm the Company’s reputation and have a material adverse effect on its business, operating results and financial condition. The Company cannot predict when OFAC will conclude its own review of voluntary self-disclosures or whether it may impose any of the potential penalties described above.

The Company's operations in Brazil are subject to highly complex labor, tax, customs and other laws. While the Company believes that it is in compliance with such laws, it is periodically engaged in litigation regarding the application of these laws. The Company maintained accruals of $ 8 million for claims aggregating $ 59 million in Brazil as of March 31, 2020 . The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based on the Company's assessment of the claims and prior experience with similar matters.

While the Company believes its accruals for litigation and claims are adequate, the final amounts required to resolve such matters could differ materially from recorded estimates and the Company's results of operations and cash flows could be materially affected.

Guarantees and Commitments

As part of the agreements of the Climate Transaction and Interiors Divestiture, the Company continues to provide lease guarantees to divested Climate and Interiors entities. As of March 31, 2020 , the Company has $ 5 million and $ 1 million of outstanding guarantees, related to the divested Climate and Interiors entities, respectively. The guarantees represent the maximum potential amount that the Company could be required to make under the guarantees in the event of default by the guaranteed parties. The

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guarantees will generally cease upon expiration of current lease agreement which expire in 2026 and 2021 for the Climate and Interiors entities, respectively.

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. Specific cause actions represent customer actions related to defective supplier parts and related software.

The following table provides a reconciliation of changes in the product warranty and recall claims liability:

	Three Months Ended March 31
(In millions)	2020				2019
Beginning balance	$	49			$	48
Accruals for products shipped	4				5
Changes in estimates	—				1
Specific cause actions	1				2
Settlements	( 5		)		( 5		)
Ending balance	$	49			$	51

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 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 as of March 31, 2020 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.

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Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

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Technology Innovation - The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, learning, and voice enabled. Visteon's broad portfolio of cockpit electronics technology and the development of the DriveCore™ advanced safety platform positions Visteon to support these macro trends in automotive.

•	Long-Term Growth and Margin Expansion - The Company has continued to win an elevated level of business by demonstrating product quality, technical and development capability, new product innovation, reliability, timeliness, product design, manufacturing capability and flexibility, as well as overall customer service.

•	Enhance Shareholder Returns - The Company has returned approximately $3.3 billion to shareholders since 2015 through a combination of ongoing share repurchases and a onetime $1.75 billion special distribution in 2016.

•	Enhanced liquidity and cash position by drawing down the full $400 million available under its revolving credit facility. Visteon has no significant near-term debt maturities.

•	Temporarily suspended, or significantly reduced, production at manufacturing facilities outside of China. During the three months ending March 31, 2020, the Company announced restructuring programs to rationalize the Company's global footprint, lower its cost base, and improve financial performance and cash flow generation.

•	Ramped up production in China during March and expecting to reach pre-COVID-19 levels during the second quarter.

•	Implemented temporary global compensation reductions of 40% for the CEO, 30% for the Company's executive committee, and 30% of the cash compensation for the Company's non-employee directors. Subject to local laws and regulations, all other employee salaries will be reduced by 20%.

•	Implemented comprehensive safety protocols to protect the health and safety of employees as operations resume.

•	Providing up to 50,000 protective face shield donations by using production lines at its state-of-the-art Palmela manufacturing facility in Portugal, typically dedicated to automotive cockpit electronics.

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•	The Company recorded net sales of $643 million , representing a decrease of $94 million when compared with the same period of 2019 .

•	Gross margin was $53 million or 8.2% of net sales for the three month period ended March 31, 2020 , compared to $66 million or 9.0% of net sales for the same period of 2019 .

•	Net loss attributable to Visteon was $35 million for the three month period ended March 31, 2020 , compared to net income of $14 million for the same period of 2019 .

•	As of March 31, 2020 , total cash was $825 million , inclusive of $400 million of cash drawn under the Company's revolving facility, representing a $356 million increase as compared to $469 million as of December 31, 2019 .

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•	Continued and future impacts of the COVID-19 pandemic on our financial condition and business operations including global supply chain disruptions, market downturns, reduced consumer demand, and new government actions or restrictions.

•	Visteon’s ability to satisfy its future capital and liquidity requirements; Visteon’s ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to Visteon; Visteon’s ability to comply with covenants applicable to it; and the continuation of acceptable supplier payment terms.

•	Visteon’s ability to satisfy its pension and other postretirement employee benefit obligations, and to retire outstanding debt and satisfy other contractual commitments, all at the levels and times planned by management.

•	Visteon’s ability to access funds generated by its foreign subsidiaries and joint ventures on a timely and cost-effective basis.

•	Changes in the operations (including products, product planning and part sourcing), financial condition, results of operations or market share of Visteon’s customers.

•	Changes in vehicle production volume of Visteon’s customers in the markets where it operates.

•	Increases in commodity costs or disruptions in the supply of commodities, including resins, copper, fuel and natural gas.

•	Visteon’s ability to generate cost savings to offset or exceed agreed-upon price reductions or price reductions to win additional business and, in general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs and capital investments.

•	Visteon’s ability to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements.

•	Restrictions in labor contracts with unions that restrict Visteon’s ability to close plants, divest unprofitable, noncompetitive businesses, change local work rules and practices at a number of facilities and implement cost-saving measures.

•	The costs and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential asset impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities.

•	Significant changes in the competitive environment in the major markets where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold.

•	Legal and administrative proceedings, investigations and claims, including shareholder class actions, inquiries by regulatory agencies, product liability, warranty, employee-related, environmental and safety claims and any recalls of products manufactured or sold by Visteon.

•	Changes in economic conditions, currency exchange rates, changes in foreign laws, regulations or trade policies or political stability in foreign countries where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold.

•	Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components or supplies to manufacture its products or where its products are manufactured, distributed or sold.

•	Changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of Visteon’s products or assets.

•	Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system or fuel prices and supply.

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•	The cyclical and seasonal nature of the automotive industry.

•	Visteon’s ability to comply with environmental, safety and other regulations applicable to it and any increase in the requirements, responsibilities and associated expenses and expenditures of these regulations.

•	Visteon’s ability to protect its intellectual property rights, and to respond to changes in technology and technological risks and to claims by others that Visteon infringes their intellectual property rights.

•	Visteon’s ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting.

•	Other factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.

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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 presentation, and which we assume no obligation to update. Backlog does 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 cancellations, installation rates, customer price reductions and currency exchange rates.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

Item 4.	Controls and Procedures

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Item 1.	Legal Proceedings

Item 1A.	Risk Factors

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

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Item 6.	Exhibits

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*	Indicates that exhibit is a management contract or compensatory plan or arrangement.

**	Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files as Exhibit 101 hereto are deemed not filed or part of a registration