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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
________________
FORM 10-Q
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 001-15827
VISTEON CORPORATION
(Exact name of registrant as specified in its charter)
State ofDelaware38-3519512
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One Village Center Drive,Van Buren Township,Michigan48111
(Address of principal executive offices)(Zip code)
Registrant’s telephone number, including area code: (800)-VISTEON
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, Par Value $.01 Per ShareVCThe NASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No__
Indicate by check mark whether the registrant: has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ü No __
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer," "accelerated filer,” "smaller reporting company" and “emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ü  Accelerated filer  __   Non-accelerated filer __   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. __
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ü
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ü No__
As of October 23, 2020, the registrant had outstanding 27,832,807 shares of common stock.
Exhibit index located on page number 40.
1




Visteon Corporation and Subsidiaries
Index
Page
Condensed Consolidated Statements of Changes in Equity (Unaudited)
2



Part I
Financial Information

Item 1.Condensed Consolidated Financial Statements

VISTEON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions except per share amounts)
(Unaudited)
Three Months Ended September 30,Nine Months Ended
September 30,
2020201920202019
Net sales
$747 $731 $1,761 $2,201 
Cost of sales
(648)(647)(1,605)(1,981)
Gross margin
99 84 156 220 
Selling, general and administrative expenses
(45)(52)(140)(167)
Restructuring expense, net
(32)(1)(69)(2)
Interest expense
(6)(4)(14)(10)
Interest income
1 1 4 3 
Equity in net income of non-consolidated affiliates
2 1 4 7 
Other income, net
3 2 10 7 
Income (loss) before income taxes
22 31 (49)58 
Provision for income taxes
(12)(13)(19)(16)
Net income (loss)
10 18 (68)42 
Net income attributable to non-controlling interests
(4)(4)(6)(7)
Net income (loss) attributable to Visteon Corporation
$6 $14 $(74)$35 
Comprehensive income (loss)
$30 $(4)$(80)$21 
 Less: Comprehensive income attributable to non-controlling interests7 1 9 4 
Comprehensive income (loss) attributable to Visteon Corporation
$23 $(5)$(89)$17 
Basic earnings (loss) per share attributable to Visteon Corporation
$0.22 $0.50 $(2.65)$1.25 
Diluted earnings (loss) per share attributable to Visteon Corporation
$0.21 $0.50 $(2.65)$1.24 

See accompanying notes to the condensed consolidated financial statements.
3



VISTEON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
September 30,December 31,
20202019
ASSETS
Cash and equivalents
$431 $466 
Restricted cash
4 3 
Accounts receivable, net
476 514 
Inventories, net
164 169 
Other current assets
193 193 
Total current assets
1,268 1,345 
Property and equipment, net
418 436 
Intangible assets, net
126 127 
Right-of-use assets
168 165 
Investments in non-consolidated affiliates
51 48 
Other non-current assets
133 150 
Total assets
$2,164 $2,271 
LIABILITIES AND EQUITY
Short-term debt
$ $37 
Accounts payable
494 511 
Accrued employee liabilities
74 73 
Current lease liability
31 30 
Other current liabilities
189 147 
Total current liabilities
788 798 
Long-term debt, net
348 348 
Employee benefits
280 292 
Non-current lease liability
145 139 
Deferred tax liabilities
29 27 
Other non-current liabilities
72 72 
Stockholders’ equity:
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of September 30, 2020 and December 31, 2019)
  
Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 28 million shares outstanding as of September 30, 2020 and December 31, 2019)
1 1 
Additional paid-in capital
1,344 1,342 
Retained earnings
1,605 1,679 
Accumulated other comprehensive loss
(282)(267)
Treasury stock
(2,283)(2,275)
Total Visteon Corporation stockholders’ equity
385 480 
Non-controlling interests
117 115 
Total equity
502 595 
Total liabilities and equity
$2,164 $2,271 

See accompanying notes to the condensed consolidated financial statements.
4



VISTEON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended September 30,
20202019
Operating Activities
Net income (loss)
$(68)$42 
Adjustments to reconcile net income (loss) to net cash provided from (used by) operating activities:
Depreciation and amortization
75 74 
Non-cash stock-based compensation
13 14 
Equity in net income of non-consolidated affiliates, net of dividends remitted
(4)(7)
Other non-cash items
1 5 
Changes in assets and liabilities:
Accounts receivable
38 17 
Inventories
5 (13)
Accounts payable
11 49 
Other assets and other liabilities
26 (63)
Net cash provided from operating activities
97 118 
Investing Activities
Capital expenditures, including intangibles
(83)(109)
Loan repayments from non-consolidated affiliates2 11 
Net investment hedge7 4 
Other(3)(2)
Net cash used by investing activities
(77)(96)
Financing Activities
Borrowings on revolving credit facility
400  
Payments on revolving credit facility(400) 
Repurchase of common stock
(16)(20)
Dividends paid to non-controlling interests
(7)(7)
Short-term debt repayments, net
(37)(8)
Net cash used by financing activities
(60)(35)
Effect of exchange rate changes on cash
6 (8)
Net decrease in cash
(34)(21)
Cash and restricted cash at beginning of the period
469 467 
Cash and restricted cash at end of the period
$435 $446 

See accompanying notes to the condensed consolidated financial statements.
5



VISTEON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions)
(Unaudited)
Total Visteon Corporation Stockholders' Equity
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Total Visteon Corporation Stockholders' EquityNon-Controlling InterestsTotal Equity
December 31, 2019
$1 $1,342 $1,679 $(267)$(2,275)$480 $115 $595 
Net income (loss)
  (35)  (35)(1)(36)
Other comprehensive income (loss)
   (37) (37) (37)
Stock-based compensation, net
 (5)  7 2  2 
Repurchase of shares of common stock
    (16)(16) (16)
Dividends declared to non-controlling interests
      (7)(7)
March 31, 2020
$1 $1,337 $1,644 $(304)$(2,284)$394 $107 $501 
Net income (loss)
  (45)  (45)3 (42)
Other comprehensive income (loss)
   5  5  5 
Stock-based compensation, net
 4    4  4 
June 30, 2020
$1 $1,341 $1,599 $(299)$(2,284)$358 $110 $468 
Net income (loss)
  6   6 4 10 
Other comprehensive income (loss)
   17  17 3 20 
Stock-based compensation, net
 3   1 4  4 
September 30, 2020
$1 $1,344 $1,605 $(282)$(2,283)$385 $117 $502 

Total Visteon Corporation Stockholders' Equity
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Total Visteon Corporation Stockholders' EquityNon-Controlling InterestsTotal Equity
December 31, 2018
$1 $1,335 $1,609 $(216)$(2,264)$465 $117 $582 
Net income (loss)
  14   14 2 16 
Other comprehensive income (loss)
   4  4 1 5 
Stock-based compensation, net
 (5)  7 2  2 
Acquisition of non-controlling interest
 2    2 (2) 
March 31, 2019
$1 $1,332 $1,623 $(212)$(2,257)$487 $118 $605 
Net income (loss)
  7   7 1 8 
Other comprehensive income (loss)
   (3) (3)(1)(4)
Stock-based compensation, net
 6    6  6 
Dividends declared to non-controlling interests
      (2)(2)
Repurchase of shares of common stock
    (20)(20) (20)
June 30, 2019
$1 $1,338 $1,630 $(215)$(2,277)$477 $116 $593 
Net income (loss)
  14   14 4 18 
Other comprehensive income (loss)
   (19) (19)(3)(22)
Stock-based compensation, net
 2    2  2 
Dividends declared to non-controlling interests
      (7)(7)
September 30, 2019
$1 $1,340 $1,644 $(234)$(2,277)$474 $110 $584 

See accompanying notes to the condensed consolidated financial statements.

6



VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. Summary of Significant Accounting Policies

Basis of Presentation - Interim Financial Statements

The condensed consolidated financial statements of Visteon Corporation (the "Company" or "Visteon") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") have been condensed or omitted pursuant to such rules and regulations. These interim condensed 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, stockholders' equity 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 September 30, 2020, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

Allowance for Doubtful Accounts

The following table provides a rollforward of changes in the allowance for doubtful accounts:

Nine Months Ended September 30,
(In millions)2020
Beginning balance$10 
Provision2 
Recoveries(3)
  Write-offs charged against the allowance(4)
Ending balance$5 

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 condensed consolidated financial statements.

7



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.  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 condensed 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 related to certain contract modifications and hedging relationships 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.

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." The guidance (i) removes disclosures that are no longer considered cost beneficial, (ii) clarifies the specific requirements of disclosures and (iii) adds disclosure requirements including reasons for significant gains and losses related to changes in the benefit obligation. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The Company does not expect application of this accounting standards update to have a material impact on its condensed consolidated financial statements.

NOTE 2. Non-Consolidated Affiliates

Investments in Affiliates

The Company recorded equity in the net income of non-consolidated affiliates of $4 million and $7 million for the nine months ended September 30, 2020 and 2019, respectively.

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.

A summary of the Company's investments in non-consolidated equity method affiliates is provided below:

September 30,December 31,
(In millions)20202019
YFVIC (50%)
$46 $43 
PT Astra Visteon Indonesia (50%)
5 5 
Total investments in non-consolidated affiliates
$51 $48 

Variable Interest Entities
The Company evaluates 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. The Company consolidates a VIE if it is determined to be the primary beneficiary of the VIE having 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.
8



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:
September 30,December 31,
(In millions)20202019
Payables due to YFVIC
$11 $9 
Exposure to loss in YFVIC:
Investment in YFVIC
$46 $43 
Receivables due from YFVIC
52 41 
Subordinated loan receivable from YFVIC
6 8 
    Maximum exposure to loss in YFVIC
$104 $92 

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 September 30, 2020, the Company has contributed a total of $3 million toward the aggregate investment commitments.

NOTE 3. Restructuring Activities
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, including potential impacts related to COVID-19, 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.

Restructuring actions initiated during 2020 include the following:

In September, in response to COVID-19 and to improve efficiency and rationalize the Company’s footprint, the Company approved a plan related to cash severance, retention, and termination costs. The Company has incurred $31 million in restructuring costs related to this plan and expects to incur up to $40 million. As of September 30, 2020, $30 million remains accrued related to this action.

In March, the Company approved a global restructuring plan impacting engineering, administrative and manufacturing functions to improve the Company’s efficiency and rationalize its footprint. The Company incurred $16 million of net restructuring expense for cash severance, retention, and termination costs related to this plan. As of September 30, 2020, $4 million remains accrued related to this action.

In January, the Company approved a plan primarily related to European engineering and administrative functions to improve the Company’s efficiency and rationalize its footprint. The Company incurred $22 million of net restructuring expense for cash severance, retention, and termination costs related to this plan and expects to incur up to $24 million. As of September 30, 2020, $13 million remains accrued related to this action.

During the nine months ended September 30, 2020, the Company incurred $1 million of restructuring expense for cash severance payments 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 nine months ended September 30, 2019, the Company recorded net restructuring expense of $2 million related to this program.

9



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 September 30, 2020, $3 million remains accrued related to this program.

As of September 30, 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 $52 million and $10 million as of September 30, 2020 and December 31, 2019, respectively, are classified as "Other current liabilities" on the condensed consolidated balance sheets. The Company anticipates that the activities associated with the current restructuring reserve balance will be substantially complete by the end of 2021. The Company’s condensed consolidated restructuring reserves and related activity are summarized below, including amounts associated with discontinued operations.

(In millions)
December 31, 2019$10 
   Expense33 
   Utilization(6)
   Foreign currency(1)
March 31, 2020$36 
   Expense1 
   Change in estimate3 
   Utilization(9)
   Foreign currency1 
June 30, 2020$32 
   Expense31 
   Change in estimate1 
   Utilization(12)
September 30, 2020$52 

NOTE 4. Inventories

Inventories, net consist of the following components:
September 30,December 31,
(In millions)20202019
Raw materials
$102 $100 
Work-in-process
25 28 
Finished products
37 41 
$164 $169 
10



NOTE 5. Goodwill and Other Intangible Assets

Intangible assets, net are comprised of the following:
September 30, 2020
(In millions)Estimated Weighted Average Useful Life (years)Gross IntangiblesAccumulated AmortizationNet Intangibles
Definite-Lived:
Developed technology5$40 $(37)$3 
Customer related1091 (59)32 
Capitalized software development341 (6)35 
Other2016 (7)9 
Subtotal188 (109)79 
Indefinite-Lived:
Goodwill47  47 
Total $235 $(109)$126 

A rollforward of the carrying amounts of intangible assets is presented below:

December 31, 2019September 30, 2020
(In millions)Gross IntangiblesAccumulated AmortizationNet Intangibles AdditionsForeign CurrencyAmortization ExpenseNet Intangibles
Definite-Lived:
Developed technology$40 $(35)$5 $ $ $(2)$3 
Customer related89 (51)38   (6)32 
Capitalized software development32 (5)27 9  (1)35 
Other15 (4)11   (2)9 
Subtotal176 (95)81 9  (11)79 
Indefinite-Lived:
Goodwill46  46  1  47 
Total $222 $(95)$127 $9 $1 $(11)$126 


NOTE 6. Other Assets

Other current assets are comprised of the following components:
September 30,December 31,
(In millions)20202019
 Recoverable taxes
$68 $64 
 Joint venture receivables
52 41 
 Contractually reimbursable engineering costs
32 29 
 Prepaid assets and deposits
19 22 
China bank notes11 16 
Royalty agreements11 17 
 Other
 4 
$193 $193 

The Company receives bank notes from certain customers in China to settle trade accounts receivable. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in
11



nature. The Company redeemed $104 million and $59 million of China bank notes during the nine months ended September 30, 2020 and 2019, respectively. Remaining amounts outstanding at third party institutions related to sold bank notes will mature by March 31, 2021.

Other non-current assets are comprised of the following components:
September 30,December 31,
(In millions)20202019
Deferred tax assets$55 $59 
Contractually reimbursable engineering costs30 24 
Recoverable taxes19 28 
Royalty agreements8 11 
Joint venture notes receivable6 8 
 Other
15 20 
$133 $150 
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 $12 million during the remainder of 2020, $24 million in 2021, $8 million in 2022, $7 million in 2023 and $11 million in 2024 and beyond.

NOTE 7. Other Liabilities

Other current liabilities are summarized as follows:
September 30,December 31,
(In millions)20202019
 Restructuring reserves$52 $10 
Product warranty and recall accruals
37 34 
Deferred income
21 22 
 Non-income taxes payable 19 17 
Royalty reserves
14 19 
Joint venture payables
11 9 
Income taxes payable
4 7 
Dividends payable to non-controlling interests
2 3 
Other
29 26 
$189 $147 

Other non-current liabilities are summarized as follows:
September 30,December 31,
(In millions)20202019
Derivative financial instruments
$27 $14 
Product warranty and recall accruals
13 15 
Deferred income
7 9 
Royalty reserves
6 13 
Income tax reserves
5 5 
Non-income tax reserves
1 1 
Other
13 15 
$72 $72 

12



NOTE 8. Debt
The Company’s short and long-term debt consists of the following:
September 30,December 31,
(In millions)20202019
Short-Term Debt:
Short-term borrowings$— $37 
Long-Term Debt:
Term debt facility, net$348 $348 
Short-Term Debt
Short-term borrowings, primarily related to the Company's non-U.S. joint ventures, were fully repaid during the third quarter of 2020. As of September 30, 2020, the available borrowings under these affiliate credit facilities are $153 million.
Long-Term Debt

As of September 30, 2020, the Company has an amended credit agreement ("Credit Agreement") which includes a $350 million Term Facility maturing March 24, 2024 and a $400 million Revolving Credit Facility which matures the earlier of December 24, 2024, 90 days prior to the scheduled maturity of the Term Facility, or the date of the termination of the Company's credit agreement.

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 response to unprecedented uncertainty related to the impact of COVID-19. On September 24, 2020, the Company fully repaid the amount borrowed under the Revolving Credit Facility following stronger than expected industry recovery and improved Company performance in the third quarter of 2020.

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. Loans under the Company' Revolving Credit Facility 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.

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 are suspended. As of September 30, 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 on substantially all property of the Company and the subsidiaries party to the security agreement, subject to certain limitations. 

13



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 $3 million of outstanding letters of credit issued under this facility secured by restricted cash, as of September 30, 2020. Additionally, the Company had $7 million of locally issued letters of credit with less than $1 million of collateral as of September 30, 2020, to support various tax appeals, customs arrangements and other obligations at its local affiliates.

NOTE 9. Employee Benefit Plans
Defined Benefit Plans