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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, 2023
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 19, 2023, the registrant had outstanding 27,811,203 shares of common stock.
Exhibit index located on page number 39.
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,
2023202220232022
Net sales
$1,014 $1,026 $2,964 $2,692 
Cost of sales
(871)(922)(2,607)(2,438)
Gross margin
143 104 357 254 
Selling, general and administrative expenses
(52)(47)(156)(134)
Restructuring and impairment
 (1)(2)(12)
Interest expense
(4)(3)(13)(10)
Interest income
3 1 6 3 
Equity in net (loss) income of non-consolidated affiliates
(1)(1)(8)3 
Other income (expense), net
3 5 (4)15 
 Income (loss) before income taxes
92 58 180 119 
 Provision for income taxes
(21)(9)(48)(24)
Net income (loss)
71 49 132 95 
Less: Net (income) loss attributable to non-controlling interests
(5)(5)(12)(5)
Net income (loss) attributable to Visteon Corporation
$66 $44 $120 $90 
Comprehensive income (loss)
$58 $15 $114 $21 
 Less: Comprehensive (income) loss attributable to non-controlling interests(4) (6)4 
Comprehensive income (loss) attributable to Visteon Corporation
$54 $15 $108 $25 
Basic earnings (loss) per share attributable to Visteon Corporation
$2.35 $1.57 $4.26 $3.20 
Diluted earnings (loss) per share attributable to Visteon Corporation
$2.32 $1.54 $4.20 $3.16 

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,
20232022
ASSETS
 Cash and equivalents
$481 $520 
 Restricted cash
4 3 
Accounts receivable, net
679 672 
Inventories, net
318 348 
Other current assets
140 167 
Total current assets
1,622 1,710 
Property and equipment, net
377 364 
Intangible assets, net
83 99 
Right-of-use assets
115 124 
Investments in non-consolidated affiliates
36 49 
Other non-current assets
124 104 
Total assets
$2,357 $2,450 
LIABILITIES AND EQUITY
Short-term debt
$18 $13 
Accounts payable
595 657 
Accrued employee liabilities
86 90 
Current lease liability
30 29 
Other current liabilities
219 246 
Total current liabilities
948 1,035 
Long-term debt, net
323 336 
Employee benefits
104 115 
Non-current lease liability
87 99 
Deferred tax liabilities
30 27 
Other non-current liabilities
64 64 
Stockholders’ equity:
Preferred stock (par value 0.01, 50 million shares authorized, none outstanding as of September 30, 2023 and December 31, 2022)
  
Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 27.9 and 28.2 million shares outstanding as of September 30, 2023 and December 31, 2022, respectively)
1 1 
Additional paid-in capital
1,349 1,352 
Retained earnings
1,908 1,788 
Accumulated other comprehensive loss
(225)(213)
Treasury stock
(2,309)(2,253)
Total Visteon Corporation stockholders’ equity
724 675 
Non-controlling interests
77 99 
Total equity
801 774 
Total liabilities and equity
$2,357 $2,450 

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,
20232022
Operating Activities
Net income (loss)
$132 $95 
Adjustments to reconcile net income (loss) to net cash provided from (used by) operating activities:
Depreciation and amortization
79 79 
Non-cash stock-based compensation
26 19 
Equity in net loss (income) of non-consolidated affiliates, net of dividends remitted
8 — 
Impairments
 4 
Other non-cash items
(3)(2)
Changes in assets and liabilities:
Accounts receivable
(19)(244)
Inventories
23 (112)
Accounts payable
(54)173 
Other assets and other liabilities
(23)(10)
Net cash provided from operating activities
169 2 
Investing Activities
Capital expenditures, including intangibles
(82)(54)
Contributions to equity method investments(1)(1)
Settlement of derivative contracts 9 
Other3 2 
Net cash used by investing activities
(80)(44)
Financing Activities
Borrowings on term debt facility 350 
Payments on term debt facility (350)
Short-term debt, net (4)
Principal repayment of term debt facility(8) 
Dividends to non-controlling interests(27) 
Repurchase of common stock(76) 
Stock based compensation tax withholding payments(16) 
Proceeds from the exercise of stock options8  
Other (3)
Net cash used by financing activities
(119)(7)
Effect of exchange rate changes on cash
(8)(41)
Net decrease in cash, equivalents, and restricted cash
(38)(90)
Cash, equivalents, and restricted cash at beginning of the period
523 455 
Cash, equivalents, and restricted cash at end of the period
$485 $365 

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, 2022
$1 $1,352 $1,788 $(213)$(2,253)$675 $99 $774 
Net income (loss)— — 34 — — 34 4 38 
Other comprehensive income (loss)— — — 16 — 16 (1)15 
Stock-based compensation, net— (18)— — 13 (5)— (5)
Dividends to non-controlling interest— — — — — — (15)(15)
March 31, 2023
$1 $1,334 $1,822 $(197)$(2,240)$720 $87 $807 
Net income (loss)— — 20 — — 20 3 23 
Other comprehensive income (loss)— — — (16)— (16)(4)(20)
Stock-based compensation, net— 7 — — 4 11 — 11 
Share repurchase— — — — (30)(30)— (30)
Dividends to non-controlling interest— — — — — — (13)(13)
June 30, 2023$1 $1,341 $1,842 $(213)$(2,266)$705 $73 $778 
Net income (loss)— — 66 — — 66 5 71 
Other comprehensive income (loss)— — — (12)— (12)(1)(13)
Stock-based compensation, net— 8 — — 3 11 — 11 
Share repurchase— — — — (46)(46)— (46)
September 30, 2023$1 $1,349 $1,908 $(225)$(2,309)$724 $77 $801 

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, 2021
$1 $1,349 $1,664 $(229)$(2,269)$516 $100 $616 
Net income (loss)
— — 22 — — 22 1 23 
Other comprehensive income (loss)
— — — 4 — 4  4 
Stock-based compensation, net— (10)— — 9 (1)— (1)
March 31, 2022
$1 $1,339 $1,686 $(225)$(2,260)$541 $101 $642 
Net income (loss)— — 24 — — 24 (1)23 
Other comprehensive income (loss)— — — (40)— (40)(4)(44)
Stock-based compensation, net— 6 — — 1 7 — 7 
Dividends payable— — — — — — (2)(2)
June 30, 2022$1 $1,345 $1,710 $(265)$(2,259)$532 $94 $626 
Net income (loss)— — 44 — — 44 5 49 
Other comprehensive income (loss)— — — (29)— (29)(5)(34)
Stock-based compensation, net— 6 — — 2 8 — 8 
September 30, 2022$1 $1,351 $1,754 $(294)$(2,257)$555 $94 $649 

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 and Subsidiaries (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 United States 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. 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, 2023 will be reflected in management's estimates in future periods.

Segment: The Company’s reportable segment is Electronics. The Electronics segment provides vehicle cockpit electronics products to customers, including digital instrument clusters, domain controllers with integrated advanced driver assistance systems ("ADAS"), displays, Android-based infotainment systems, and battery management systems. As the Company has one reportable segment, net sales, total assets, depreciation, amortization and capital expenditures are equal to consolidated results.

Allowance for Doubtful Accounts: The Company establishes an allowance for doubtful accounts for accounts receivable based on the current expected credit loss impairment model (“CECL”). The Company applies a historical loss rate based on historic write-offs by region to aging categories. The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts of future losses, as necessary. The Company may also record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the customer's operating results or financial position. The allowance for doubtful accounts was $8 million and $5 million as of September 30, 2023 and December 31, 2022, respectively.

Accounting Pronouncements Not Yet Adopted

Business Combinations - Joint Venture - In August 2023, the FASB issued ASU 2023-05, "Joint Venture Formation (Subtopic 805-60) - Recognition and initial measurement." to provide decision-useful information to investors and other allocators of capital (collectively, investors) in a joint venture’s financial statements and to create consistency in presentation. The amendments in this ASU are effective for fiscal years beginning after January 1, 2025 and interim periods within those fiscal years. The Company is currently evaluating the impacts of the provisions of ASU 2023-05.

Disclosure Improvements - In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements (Release No. 33-10532)." The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. The amendments in this ASU are effective for the interim period June 30, 2027. The Company is currently evaluating the impacts of the provisions of ASU 2023-06.


7



NOTE 2. Non-Consolidated Affiliates

Investments in Affiliates

The Company's investments in non-consolidated equity method affiliates include the following:

September 30,December 31,
(In millions)20232022
Yanfeng Visteon Investment Co., Ltd. ("YFVIC") (50%)
$11 $25 
Limited partnerships14 13 
Other
11 11 
Total investments in non-consolidated affiliates
$36 $49 

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.
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 Yangfeng Automotive Trim Systems Co. Ltd. ("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.
The Company's investments in YFVIC consists of the following:
September 30,December 31,
(In millions)20232022
Payables due to YFVIC
$20 $38 
Exposure to loss in YFVIC:
Investment in YFVIC
$11 $25 
Receivables due from YFVIC
22 48 
    Maximum exposure to loss in YFVIC
$33 $73 
A $5 million dividend was declared by a non-consolidated affiliate during the second quarter 2023, which is recorded as a current asset as of September 30, 2023.
The Company recorded a $9 million settlement charge related to a one-time contract dispute with a joint venture partner during the second quarter of 2022. This charge is recorded within Cost of Sales.
Equity 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, 2023, the Company has contributed a total of approximately $12 million toward the aggregate investment commitments. These limited partnerships are classified as equity method investments.

NOTE 3. Restructuring and Impairments
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 actions 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.
8




During the nine months ended September 30, 2023 and 2022, the Company recorded $2 million and $8 million, respectively, of net restructuring expense primarily related to employee severance.

Current restructuring actions include the following:

During the nine months ended September 30, 2023, the Company approved and recorded $2 million of net restructuring expense primarily in North and South America to improve efficiencies and rationalize the Company's footprint. As of September 30, 2023, $1 million remains accrued related to this action.

During prior periods the Company approved various restructuring programs to improve efficiencies across the organization. As of September 30, 2023, $3 million remains accrued related to these previously announced actions.

As of September 30, 2023, the Company retained restructuring reserves as part of the Company's divestiture of the majority of its global Interiors business (the "Interiors Divestiture") and legacy operations of $3 million associated with completed programs for the fundamental reorganization of operations at facilities in Brazil and France.

Restructuring Reserves

The Company’s restructuring reserves and related activity are summarized below.
(In millions)
December 31, 2022$11 
   Change in estimate1 
   Payments(3)
March 31, 2023$9 
   Expense2 
   Change in estimate(1)
   Payments(1)
June 30, 2023$9 
   Expense1 
   Change in estimate(1)
   Payments(2)
September 30, 2023$7 

Impairments

The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable.

During the nine months ended September 30, 2022, due to the geopolitical situation in Eastern Europe, the Company elected to close the Russian facility resulting in a non-cash impairment charge of $4 million to fully impair property and equipment and reduce inventory to its net realizable value.

NOTE 4. Inventories
Inventories, net consist of the following components:
September 30,December 31,
(In millions)20232022
Raw materials
$240 $291 
Work-in-process
34 26 
Finished products
44 31 
$318 $348 

9



NOTE 5. Goodwill and Other Intangible Assets

Intangible assets, net are comprised of the following:
September 30, 2023December 31, 2022
(In millions)Estimated Weighted Average Useful Life (years)Gross IntangiblesAccumulated AmortizationNet IntangiblesGross IntangiblesAccumulated AmortizationNet Intangibles
Definite-Lived:
Developed technology10$40 $(39)$1 $40 $(39)$1 
Customer related1084 (80)4 88 (77)11 
Capitalized software development551 (21)30 50 (16)34 
Other3217 (12)5 17 (9)8 
Subtotal192 (152)40 195 (141)54 
Indefinite-Lived:
Goodwill43 — 43 45 — 45 
Total $235 $(152)$83 $240 $(141)$99 

Capitalized software development consists of software development costs intended for integration into customer products.


NOTE 6. Other Assets

Other current assets are comprised of the following components:
September 30,December 31,
(In millions)20232022
 Recoverable taxes
$54 $55 
 Contractually reimbursable engineering costs
34 35 
 Joint venture receivables
26 49 
 Prepaid assets and deposits
19 18 
China bank notes 6 
 Other
7 4 
$140 $167 

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 nature. The Company redeemed $208 million and $101 million of China bank notes during the nine months ended September 30, 2023 and 2022, respectively. Remaining amounts outstanding at third-party institutions related to sold bank notes will mature by the end of the first quarter of 2024.
10



Other non-current assets are comprised of the following components:
September 30,December 31,
(In millions)20232022
Deferred tax assets$41 $42 
Contractually reimbursable engineering costs22 25 
Recoverable taxes11 11 
Derivative financial instruments8 2 
Pension assets4 4 
 Other
38 20 
$124 $104 
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 2023, $31 million in 2024, $10 million in 2025, $2 million in 2026, and $1 million in 2027 and beyond.

NOTE 7. Other Liabilities

Other current liabilities are summarized as follows:
September 30,December 31,
(In millions)20232022
Deferred income
$54 $55 
Product warranty and recall accruals
43 31 
Non-income taxes payable
26 35 
Joint venture payable
21 39 
Income taxes payable
17 22 
Royalty reserves
15 14 
Restructuring reserves
4 6 
Dividends payable
2 1 
Other
37 43 
$219 $246 

Other non-current liabilities are summarized as follows:
September 30,December 31,
(In millions)20232022
Product warranty and recall accruals
$23 $20 
Deferred income
11 14 
Income tax reserves
6 7 
 Restructuring reserves3 5 
Derivative financial instruments
 2 
Other
21 16 
$64 $64 

11



NOTE 8. Debt
The Company’s debt consists of the following:
September 30,December 31,
(In millions)20232022
Short-Term Debt:
Current portion of long-term debt$18 $13 
Long-Term Debt:
Term debt facility, net$323 $336 
As of December 31, 2021, the Company's credit agreement ("Credit Agreement") included a $350 million Term Facility maturing March 24, 2024 and a $400 million Revolving Credit Facility.
On July 19, 2022, the Company entered into a new amendment to the Credit Agreement to, among other things, extend the maturity dates of both facilities. The amended Revolving Credit Facility and Term Facility will mature on July 19, 2027. The amendment changed the method the Term Loan and Revolving Credit Facility accrue interest from a LIBOR-based rate to a Secured Overnight Financing Rate ("SOFR") based rate.
On June 28, 2023, the Company amended the existing Credit Agreement to, among other things, amend certain affirmative and negative covenants.
Short-Term Debt

Terms of the amended credit facility require a quarterly principal payment equal to 1.25% of the original term debt balance. The first required payment was paid during the second quarter of 2023.

As of September 30, 2023, the Company has no other short-term borrowings at the Company's subsidiaries. The Company's subsidiaries have access to $32 million of capacity under short-term credit facilities.

Long-Term Debt

The Company has no outstanding borrowings on the Revolving Credit Facility as of September 30, 2023.

Interest on the Term Facility loans and Revolving Credit Facility accrue interest at a rate equal to a SOFR-based rate plus an applicable margin of between 1.00% and 1.75%, as determined by the Company's total gross leverage ratio. The Company can benefit from a 5 basis point decrease to the applicable margin due to a sustainability-linked pricing provision based on the Company's annual performance on reducing GHG emissions.

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.

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) certain asset sales or other dispositions, (ii) certain refinancing of indebtedness and (iii) over-advances under the Revolving Credit Facility.

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.

12



Other

The Company has a $4 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 September 30, 2023 and December 31, 2022. Additionally, the Company had $2 million and $3 million of locally issued bank guarantees and letters of credit as of September 30, 2023 and December 31, 2022, respectively, to support various tax appeals, customs arrangements and other obligations at its local affiliates.

NOTE 9. Employee Benefit Plans
The Company's net periodic benefit costs for all defined benefit plans for the three month periods ended September 30, 2023 and 2022 were as follows:
U.S. PlansNon-U.S. Plans
(In millions)2023202220232022
Costs Recognized in Income:
Pension service (cost):
Service cost
$ $ $ $ 
Pension financing benefits (cost):
Interest cost
$(8)$(5)$(3)$(2)
Expected return on plan assets11 10 3 2 
Amortization of losses and other
— — — — 
Total pension financing benefits:3 5 — — 
Net pension benefit (cost)$3 $5 $— $— 
The Company's net periodic benefit costs for all defined benefit plans for the nine month periods ended September 30, 2023 and 2022 were as follows:
U.S. PlansNon-U.S. Plans
(In millions)2023202220232022
Costs Recognized in Income:
Pension service (cost):
Service cost
$ $ $(1)$(1)
Pension financing benefits (costs):
Interest cost
$(24)$(15)$(7)$(5)
Expected return on plan assets31 30 7 6 
Amortization of losses and other
1 — — (1)
Total pension financing benefits:8 15 — — 
Net pension benefit (cost)$8 $15 $(1)$(1)
Pension financing benefits are classified as Other income, net on the Company's condensed consolidated statements of comprehensive income.
During the nine months ended September 30, 2023, cash contributions to the Company's defined benefit plans were $4 million related to its non-U.S. plans. The Company estimates that total cash contributions to its non-U.S. defined benefit pension plans during 2023 will be $5 million.
13



NOTE 10. Income Taxes
During the nine month period ended September 30, 2023, the Company recorded a provision for income tax of $48 million which reflects income tax expense in countries where the Company is profitable, accrued withholding taxes, and the inability to record a tax benefit for pretax losses and/or recognize expense for pretax income in certain jurisdictions, including the United States ("U.S."), due to valuation allowances. Pre-tax losses in jurisdictions where valuation allowances are maintained and no income tax benefits are recognized totaled $29 million and $16 million for the nine month periods ended September 30, 2023 and 2022, respectively, resulting in an increase in the Company's effective tax rate.

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.

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 Company evaluates its deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. Based on the Company’s current assessment, it is possible that sufficient positive evidence may be available to support the release of all, or a portion, of its U.S. valuation allowance in three to twelve months. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded.

There were no material changes in unrecognized tax benefits during the third quarter of 2023. During the second quarter of 2023, the Company recorded a $3 million increase in tax expense related to uncertain tax positions attributable to transfer pricing as a result of new information from discussions with foreign tax authorities. The long-term portion of uncertain income tax positions (including interest) of $6 million is included in other non-current liabilities on the condensed consolidated balance sheet, while $4 million is included in other current liabilities, and $5 million is reflected as a reduction of deferred tax assets included in Other non-current assets on the condensed consolidated balance sheet. Outstanding income tax refund claims related primarily to India and Brazil jurisdictions, total $7 million as of September 30, 2023, and are included in other non-current assets on the condensed consolidated balance sheets.
14



NOTE 11. Stockholders’ Equity and Non-controlling Interests
Non-Controlling Interests
The Company's non-controlling interests are as follows:
September 30,December 31,
(In millions)20232022
Shanghai Visteon Automotive Electronics, Co., Ltd.$49 $45 
Yanfeng Visteon Automotive Electronics Co., Ltd.13 37 
Changchun Visteon FAWAY Automotive Electronics, Co., Ltd.
13 15 
Other
2 2 
$77 $99 
15



Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated other comprehensive income (loss) (“AOCI”) and reclassifications out of AOCI by component include:
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2023202220232022
Changes in AOCI:
Beginning balance
$(213)$(265)$(213)$(229)
Other comprehensive income (loss) before reclassification, net of tax
(14)(29)(18)(66)
Amounts reclassified from AOCI
2  6 1 
Ending balance
$(225)$(294)$(225)$(294)
Changes in AOCI by Component:
Foreign currency translation adjustments
  Beginning balance
$(208)$(206)$(210)$(149)
Other comprehensive income (loss) before reclassification, net of tax (a)
(19)(45)(17)(102)
  Ending balance
(227)(251)(227)(251)
Net investment hedge
  Beginning balance
9 18 12 4 
  Other comprehensive income (loss) before reclassification, net of tax (a)
5 5 2 20 
  Amounts reclassified from AOCI
   (1)
  Ending balance
14 23 1423 
Benefit plans
  Beginning balance
(26)(79)(25)(81)
  Other comprehensive income (loss) before reclassification, net of tax (b)
 2  3 
  Amounts reclassified from AOCI(1) (2)1 
  Ending balance
(27)(77)(27)(77)
Unrealized hedging gain (loss)
  Beginning balance
12 2 10 (3)
  Other comprehensive income (loss) before reclassification, net of tax (c)
 9 (3)13 
Amounts reclassified from AOCI3  8 1 
  Ending balance
15 11 15 11 
Total AOCI
$(225)$(294)$(225)$(294)
(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 and nine months ended September 30, 2023 and 2022.
(c) There were no income tax effects related to unrealized hedging gain (loss) for either period due to the valuation allowance.

Share Repurchase Program

On March 2, 2023 the Company's board of directors authorized a share repurchase program of $300 million of common stock through December 31, 2026. During the three months ended September 30, 2023, the Company has purchased 333,758 shares at an average price of $137.11 related to this program. During the nine months ended September 30, 2023, the Company has purchased 545,537 shares at an average price of $138.87 related to this program.


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NOTE 12. Earnings Per Share

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 calculated 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 September 30,Nine Months Ended
September 30,
(In millions, except per share amounts)2023202220232022
Numerator:
Net income (loss) attributable to Visteon
$66 $44 $120 $90 
Denominator:
Average common stock outstanding - basic
28.1 28.1 28.2 28.1 
Dilutive effect of performance based share units and other
0.4 0.4 0.4 0.4 
Diluted shares
28.5 28.5 28.6 28.5 
Basic and Diluted Per Share Data:
Basic earnings (loss) per share attributable to Visteon
$2.35 $1.57 $4.26 $3.20 
Diluted earnings (loss) per share attributable to Visteon:
$2.32 $1.54 $4.20 $3.16 

NOTE 13. Fair Value Measurements and Financial Instruments
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.

Items Measured at Fair Value on a Recurring Basis
The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates and market interest rates. The Company manages these risks, in part, through the use of derivative financial instruments. The use of derivative financial instruments creates exposure to credit loss in the event of nonperformance by the counterparty to the derivative financial instruments. The Company limits this exposure by entering into agreements including master netting arrangements directly with a variety of major highly rated financial institutions that are expected to fully satisfy their obligations under the contracts. Additionally, the Company’s ability to utilize derivatives to manage risks is dependent on credit and market conditions. 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. There is no cash collateral on any of these derivatives.
Derivative financial 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 derivative
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instruments are classified as Level 2, "Other Observable Inputs" in the fair value hierarchy.

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 swaps are designated as net investment hedges and the Company has elected to assess hedge effectiveness under the spot method. Accordingly, changes in the fair value of the swaps are recorded as a cumulative translation adjustment in AOCI in the condensed consolidated balance sheet.
During 2022, the Company terminated existing cross currency swaps and received $9 million upon settlement. Subsequently, the Company executed new cross-currency swap transactions. As of September 30, 2023, the Company had cross-currency swaps with aggregate notional amounts of $200 million intended to mitigate the variability of U.S. dollar value investment in certain of its non-U.S. entities. These swaps are designated as net investment hedges. There was no ineffectiveness associated with such derivatives as of September 30, 2023, and the fair value of these derivatives is a non-current liability of $6 million. As of September 30, 2023, a gain of approximately $3 million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next 12 months.

As of December 31, 2022, the fair value of these derivatives was a non-current liability of $8 million.

Interest Rate Swaps: The Company utilizes interest rate swap instruments to manage its exposure and to mitigate the impact of interest rate variability. The swaps are designated as cash flow hedges, accordingly, the effective portion of the changes in fair value is recognized in accumulated other comprehensive income. Subsequently, the accumulated gains and losses recorded in equity are reclassified to income in the period during which the hedged exposure impacts earnings.
During 2022, the Company terminated existing interest rate swaps and received less than $1 million upon settlement. Subsequently, the Company executed new interest rate swap instruments. As of September 30, 2023, the Company had interest rate swaps with aggregate notional amounts of $250 million. The fair value of these derivatives is a non-current asset of $14 million as of September 30, 2023. As of September 30, 2023, a gain of approximately $7 million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next twelve months.

As of December 31, 2022, the fair value of these derivatives was a non-current asset of $10 million.
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Financial Statement Presentation
Gains and losses on derivative financial instruments for the three and nine months ended September 30, 2023 and 2022 are as follows:
Recorded Income (Loss) into AOCI, net of tax
Reclassified from AOCI into Income (Loss)
Recorded in (Income) Loss
(In millions)202320222023202220232022
Three months ended September 30,
Foreign currency risk - Cost of sales:
Foreign currency derivative$— $— $— $— $ $ 
Interest rate risk - Interest expense, net:
Interest rate swaps 9 (3)   
Net investment hedges
5 5 — —   
$5 $14 $(3)$— $— $— 
Nine months ended September 30,
Foreign currency risk - Cost of sales:
Foreign currency derivative$— $— $— $— $ $3 
Interest rate risk - Interest expense, net:
Interest rate swaps
(3)13 (8)(1)  
Net investment hedges
2 20 — 1   
$(1)$33 $(8)$— $— $3 
Items Not Carried at Fair Value
The Company's fair value of debt was $337 million and $336 million as of September 30, 2023 and December 31, 2022, 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 in the fair value hierarchy.
Concentrations of Credit Risk
Financial instruments including cash equivalents, derivative contracts, and accounts receivable, expose the Company to counterparty 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 GM and their affiliates. Ford represents 18% and 16% of the Company's balance as of September 30, 2023 and December 31, 2022, respectively. GM represents 13% and 9% of the Company's balance as of September 30, 2023 and December 31, 2022, respectively.

NOTE 14. Commitments and Contingencies
Litigation and Claims
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 and also provided that the Company would negotiate in good faith with the Township if the property tax payments were inadequate to permit the Township to meet its payment obligations with respect to the bonds. On December 9, 2019, the Township commenced litigation against the Company in Michigan’s Wayne County Circuit Court. On
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June 27, 2023, Visteon and the Township entered into a Settlement and Mutual Release Agreement pursuant to which Visteon, without admitting wrongdoing, will pay the Township $12 million. Payment will be made in two installments. One payment was made on July 3, 2023. The second payment is scheduled to be paid on July 1, 2024 and is classified as a current liability. The litigation commenced in Michigan’s Wayne County Circuit Court and has been dismissed with prejudice.
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 the Company 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 $39 million in Brazil as of September 30, 2023. 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.
The adverse impacts of the COVID-19 pandemic led to a significant reduction in vehicle production in the first half of 2020, which was followed by increased consumer demand and vehicle production schedules in the second half of 2020, particularly in the fourth quarter. Because semiconductor suppliers have been unable to rapidly reallocate production to serve the automotive industry, the surge in demand has led to a worldwide semiconductor supply shortage. The Company's semiconductor suppliers, along with most automotive component supply companies that use semiconductors, have been unable to fully meet the vehicle production demands of the Company's customers due to events which are outside the Company's control, including but not limited to, the COVID-19 pandemic, the global semiconductor shortage, a fire at a semiconductor fabrication facility in Japan, significant weather events impacting semiconductor supplier facilities in the southern United States, and other extraordinary events. The Company is working closely with suppliers and customers to attempt to minimize potential adverse impacts of these events. Certain customers have communicated that they expect the Company to absorb some of the financial impact of their reduced production and are reserving their rights to claim damages arising from supply shortages, however, the Company believes it has a number of legal defenses to such claims and intends to defend any such claims vigorously. The Company has also notified semiconductor suppliers that it will seek compensation from them for failure to deliver sufficient quantities. The Company is not able to estimate the possible loss or range of loss in connection with this matter at this time.
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 2015 divestitures involving the Company's former climate and interiors businesses, the Company continues to provide lease guarantees to divested Climate and Interiors entities. As of September 30, 2023, the Company has $2 million and $2 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 pay under the guarantees in the event of default by the guaranteed parties. The guarantees will generally cease upon expiration of current lease agreement which expire in 2026 and 2024 for the Climate and Interiors entities, respectively.


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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.
The following table provides a rollforward of changes in the product warranty and recall claims liability:
Nine Months Ended September 30,
(In millions)20232022
Beginning balance$51 $50 
Provisions26 13 
Changes in estimates
2 1 
Currency(1)(6)
Settlements, net(12)(11)
Ending balance$66 $47 

The Company has recorded $15 million of expense during the nine months ended September 30, 2023 related to a recall campaign for certain vehicles involving instrument panel clusters manufactured by the Company. The cause for the instrument panel cluster failures was resolved by the Company in April 2023 and the recall relates to certain parts shipped prior to that time. The amount recorded represents the Company’s best estimate and the ultimate resolution of these matters could have a further negative effect on the Company's financial position, results of operations, and cash flow.

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; customs and international trade regulations; product recalls; product liability claims; 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 paragraphs where losses are deemed probable and reasonably estimable. It is possible, however, that some of the matters discussed in the foregoing paragraphs 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 September 30, 2023 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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NOTE 15. Revenue Recognition and Geographical Information

Financial Information by Geographic Region

Disaggregated net sales by geographical market and product lines is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2023202220232022
Geographical Markets
Europe$321 $335 $997 $929 
Americas311 308 879 828 
China Domestic162 180 442 431 
China Export88 72 259 166 
Other Asia-Pacific170 175 508 439 
Eliminations(38)(44)(121)(101)
$1,014 $1,026 $2,964 $2,692 
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2023202220232022
Product Lines
Instrument clusters$494 $481 $1,445 $1,286 
Cockpit domain controller146 130 397 313 
Infotainment136 141 397 357 
Information displays87 122 274 376 
Body and electrification electronics83 67 226 143 
Other68 85 225 217 
$1,014 $1,026 $2,964 $2,692 





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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition, and cash flows of Visteon Corporation (“Visteon” or the “Company”). MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on February 16, 2023 and the financial statements and accompanying notes to the financial statements included elsewhere herein.
Executive Summary
Strategic Priorities
Visteon is a global automotive technology company serving the mobility industry, dedicated to creating more enjoyable, connected, and safe driving experiences. The Company's platforms leverage proven, scalable hardware and software solutions that enable the digital, electric and autonomous evolution of the Company's global automotive customers. The automotive mobility market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital and towards device and cloud connected, electric vehicles, and vehicles with more advanced safety features.

The Company has laid out the following strategic priorities:

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, the industry's first wireless battery management system, and the development of safety technology integrated into its domain controllers positions Visteon to support these macro trends in the automotive industry.

Long-Term Growth - The Company has continued to win business at a rate that exceeds current sales levels 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 While Maintaining a Strong Balance Sheet - The Company has continued to maintain a strong balance sheet to withstand near-term industry volatility while providing a foundation for future growth and shareholder returns. In March 2023, the Company announced a $300 million share repurchase program maturing at the end of 2026. The Company repurchased $76 million of Company common stock during the first nine months of 2023 as part of this program.
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Financial Results

The pie charts below highlight the net sales breakdown for Visteon for the three and nine months ended September 30, 2023.
Three Months Ended September 30, 2023
https://cdn.kscope.io/5f71108057d66867f30a6b0695a28873-q3.jpg
Nine Months Ended September 30, 2023
https://cdn.kscope.io/5f71108057d66867f30a6b0695a28873-ytd3.jpg
*Regional net sales are based on the geographic region where sales originate and not where customer is located (excludes inter-regional eliminations).
Global Automotive Market Conditions and Production Levels
For the last few years, the industry has been negatively impacted by the COVID-19 pandemic, worldwide semiconductor and other supply related shortages, and increased geopolitical challenges. Industry vehicle volumes increased in 2022 and are forecasted to increase again in 2023 as the worldwide semiconductor and other supply related shortages have eased. However, industry production volumes remain well below recent industry production levels that peaked in 2017 and risks related to vehicle affordability, economic uncertainty, and potential geopolitical challenges create ongoing uncertainties. The magnitude of the impact on the financial statements, results of operations, and cash flows will depend on the evolution of the semiconductor supply shortage, plant production schedules, supply chain impacts, and global economic impacts.

The current United Autoworkers (UAW) work stoppages at certain customer facilities exposes the Company to the risk of reduced customer orders due to labor disruptions affecting its customers' production and operations. A protracted UAW strike, or strikes by other labor unions at customer facilities, may lead to decreased demand for the Company's products or services, as its customers' production schedules may be adversely impacted. The Company intends to closely monitor the UAW strike and any related developments, including their impact on customer relationships and financial results.
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Results of Operations - Three Months Ended September 30, 2023 and 2022
The Company's consolidated results of operations for the three months ended September 30, 2023 and 2022 were as follows:
Three Months Ended September 30,
(In millions)20232022Change
Net sales$1,014 $1,026 $(12)
Cost of sales(871)(922)51 
Gross margin143 104 39 
Selling, general and administrative expenses(52)(47)(5)
Restructuring and impairment— (1)
Interest expense, net(1)(2)
Equity in net income of non-consolidated affiliates(1)(1)— 
Other income, net(2)
Provision for income taxes(21)(9)(12)
Net income (loss)71