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Exhibit 99.1

 

LOGO    NEWS RELEASE

Visteon Reports Strong 2015 Financial Results, Driven by Record Electronics Performance

 

    Fourth-quarter results cap year of solid performance

 

    Full-year sales up 25 percent to $3.25 billion ($809 million in fourth quarter)

 

    Adjusted EBITDA up 59 percent to $282 million ($79 million in fourth quarter), led by record electronics performance

 

    2015 net income attributable to Visteon of $2,284 million (includes net income from discontinued operations of $2,286 million associated with climate and interiors businesses)

 

    Total cash and short-term investments of $2,783 million; total debt of $384 million

 

    Declared special distribution of $43.40 per share, or approximately $1.75 billion in aggregate

 

    Completed $500 million accelerated share repurchase program; authorized incremental $500 million share repurchase program

 

    Record 2015 performance for Electronics Product Group/Corporate

 

    Adjusted EBITDA of $294 million ($83 million in fourth quarter)

 

    Electronics/Corporate achieved cash from operations of $251 million, free cash flow of $149 million, and adjusted free cash flow of $212 million

 

    Record electronics new business wins; electronics backlog of $15.2 billion

 

    Transformed to focused cockpit electronics company in 2015

 

    Concluded sale of 70 percent interest in climate control business

 

    Sold interiors facility in Germany

 

    Integrated Johnson Controls electronics business, achieving high end of synergy range

 

    Early 2016 milestones

 

    Received approximately $325 million, net of taxes, in early 2016 related to refunded Korean withholding tax on HVCC transaction. Previous estimate was $250 million.

 

    Repurchased approximately $84 million or 1.3 million shares in early 2016

 

    Board approved execution of Accelerated Share Repurchase Program for balance of $500 million authorization

VAN BUREN TOWNSHIP, Mich., Feb. 25, 2016 — Visteon Corporation (NYSE: VC) today announced strong full-year 2015 results, reporting a net income attributable to Visteon of $2,284 million, or $52.63 per diluted share, including $2,286 million of net income associated with discontinued operations.

 

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Full-year sales were $3,245 billion, an increase of $659 million or 25 percent compared with 2014. Adjusted EBITDA, a non-GAAP financial measure as defined below, was $282 million for the year, an increase of $105 million or 59 percent compared with 2014. Adjusted free cash flow, a non-GAAP financial measure as defined below, was a positive $311 million for the full year 2015.

In 2015, customers awarded Visteon a record $1.35 billion in electronics new business wins, amounting to $4.3 billion of lifetime revenue. The ongoing backlog, defined as cumulative remaining life-of-program booked sales, was approximately $15.2 billion as of Dec. 31, 2015, or 4.9 times 2015 sales. Adjusting for currency and changes in market demand forecasts, Visteon’s backlog increased 8 percent in 2015.

“We delivered a strong finish to a year of many accomplishments, achieving significant year-over-year profit improvement despite currency challenges,” said Sachin Lawande, Visteon president and CEO. “In 2015 Visteon solidified its focus on vehicle cockpit electronics and software by completing the sale of our 70 percent interest in Halla Visteon Climate Control (HVCC). We also achieved the upper range of targeted synergies related to the Johnson Controls electronics acquisition, returned $500 million in capital to shareholders, and announced a $1.75 billion special cash distribution to shareholders and an additional $500 million repurchase authorization. We retain a substantial net cash position compared with our peer group.”

Lawande added: “I am excited about the opportunities ahead for Visteon as the only company focused on vehicle cockpit electronics that offers products across all segments of this fast-growing market. We are winning significant new business and have a robust strategy in place to drive further growth through our cockpit electronics and software focus, as well as customer and geographic expansion.”

Fourth Quarter in Review

Sales of $809 million for the fourth quarter of 2015 increased $21 million from $788 million for the same quarter a year earlier. An additional $15 million of sales were classified as discontinued operations.

Electronics sales totaled $775 million, an increase of $31 million from the fourth quarter of 2014. The year-over-year improvement was primarily related to increased production volumes and new business, partially offset by unfavorable currency. For the Electronics Product Group on a regional basis, Asia accounted for 39 percent of sales, Europe 31 percent, North America 29 percent and South America 1 percent.

Gross margin for the fourth quarter of 2015 was $114 million, compared with $117 million a year earlier. Selling, general and administrative (SG&A) expenses were $63 million for the fourth quarter of 2015, compared with $64 million a year earlier.

Adjusted EBITDA for the Electronics Product Group, including Corporate costs, was $83 million compared with $58 million for the fourth quarter of 2014. The improvement was driven by increased production volumes, new business and cost efficiencies. Adjusted EBITDA for the Other Product Group was a loss of $4 million, compared with $17 million for the fourth quarter of 2014. The decrease was primarily due to the sale of the Germany interiors facility and the non-recurrence of a one-time tax benefit in 2014.

 

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For the fourth quarter of 2015, Visteon reported net income attributable to Visteon of $21 million, or $0.52 per diluted share. This included a $105 million charge related to the sale of the Berlin, Germany, interiors operation; $28 million of restructuring and other transaction costs; and a $92 million gain from discontinued operations for the quarter.

Cash and Debt Balances

As of Dec. 31, 2015, Visteon had global cash and short-term investment balances totaling $2,783 million. This balance does not include approximately $325 million, net of taxes received in early 2016, related to refunded withholding taxes from the HVCC transaction completed in 2015. Total debt as of Dec. 31, 2015, was $384 million.

For the fourth quarter of 2015, Visteon generated $64 million of cash from operations, compared with $104 million in the same period a year earlier. Capital expenditures in the quarter were $36 million. Adjusted free cash flow was $62 million in the quarter, compared with $47 million in the fourth quarter of 2014. Cash flows for both periods included results related to discontinued operations.

Visteon generated $89 million of cash from operations related to the Electronics Product Group and Corporate costs in the fourth quarter. Electronics and Corporate capital expenditures totaled $39 million, and adjusted free cash flow for Electronics and Corporate totaled $66 million in the quarter.

Sale of Germany Interiors Operations

On Dec. 1, 2015, Visteon completed the sale of its non-core automotive interiors plant in Berlin, Germany, to APCH Automotive Plastic Components Holding GmbH. Visteon contributed cash of approximately $141 million and other assets and liabilities including pension-related liabilities of $182 million. Visteon also will make a 30 million Euro payment by Nov. 30, 2016, as part of this transaction. This completed the sale of Visteon’s only remaining interiors operation not covered by the 2014 agreement to divest the majority of the interiors business to Reydel Automotive Holdings B.V., as Visteon focuses on its automotive cockpit electronics business.

Share Repurchase

On Dec. 16, 2015, Visteon entered into a stock repurchase agreement with a third-party financial institution to purchase shares of its common stock complying with the provisions of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934 (“10b5-1 Share Repurchase Program”). The new 10b5-1 Share Repurchase Program is open until March 1, 2016, with the maximum purchase amount of $150 million. In addition to the 10b5-1 Share Repurchase Program, the board has approved execution of an accelerated share repurchase program to complete the balance of the current $500 million share repurchase authorization. Visteon will complete the accelerated share repurchase program by year end. Visteon’s board of directors, on Dec. 9, 2015, had authorized $500 million of share repurchase of its shares of common stock through Dec. 31, 2016.

 

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Special Distribution to Shareholders

On Jan. 22, 2016, Visteon paid a special distribution of $43.40 per share of its common stock outstanding as of Jan. 15, 2016, or approximately $1.75 billion in the aggregate. The special distribution is part of the previously announced plan to return $2.5 billion-$2.75 billion of cash to shareholders by June 2016.

Full-Year 2016 Outlook

Visteon projects Electronics Product Group 2016 sales of $3.2 billion. Adjusted EBITDA for the Electronics Product Group and Corporate Segment is projected in the range of $305 million to $335 million. Adjusted free cash flow, as defined below, for the Electronics and Corporate Segment is projected in the range of $110 million to $150 million.

About Visteon

Visteon is a global company that designs, engineers and manufactures innovative cockpit electronics products and connected car solutions for most of the world’s major vehicle manufacturers. Visteon is a leading provider of instrument clusters, head-up displays, information displays, infotainment, audio systems, and telematics solutions; its brands include Lightscape®, OpenAir® and SmartCore™. Headquartered in Van Buren Township, Michigan, Visteon has nearly 11,000 employees at 50 facilities in 19 countries. Visteon had sales of $3.25 billion in 2015. Learn more at www.visteon.com.

Conference Call and Presentation

Today, Thursday, Feb. 25, at 9 a.m. ET, the company will host a conference call for the investment community to discuss the quarterly and full-year results and other related items. The conference call is available to the general public via a live audio webcast. The dial-in numbers to participate in the call are:

U.S./Canada: 855-855-4109

Outside U.S./Canada: 706-643-3752

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

The conference call and live audio webcast, the financial results news release, related presentation materials and other supplemental information will be accessible through Visteon’s website at www.visteon.com.

A replay of the conference call will be available through the company’s website or by dialing 855-859-2056 (toll-free from the U.S. and Canada) or 404-537-3406 (international). The conference ID for the phone replay is 43843883. The phone replay will be available for one week following the conference call.

Forward-looking Information

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including, but not limited to: (1) conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, (ii) the financial

 

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condition of our customers and the effects of any restructuring or reorganization plans that may be undertaken by our customers or suppliers, including work stoppages, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress, work stoppages, natural disasters or civil unrest; (2) our ability to satisfy future capital and liquidity requirements; including our ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to us; our ability to comply with financial and other covenants in our credit agreements; and the continuation of acceptable supplier payment terms; (3) our ability to satisfy pension and other post-employment benefit obligations; (4) our ability to access funds generated by foreign subsidiaries and joint ventures on a timely and cost-effective basis; (5) our ability to execute on our transformational plans and cost-reduction initiatives in the amounts and on the timing contemplated; (6) general economic conditions, including changes in interest rates, currency exchange rates and fuel prices; (7) the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations; (8) increases in raw material and energy costs and our ability to offset or recover these costs, increases in our warranty, product liability and recall costs or the outcome of legal or regulatory proceedings to which we are or may become a party; and (9) those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015).

Caution should be taken not to place undue reliance on our forward-looking statements, which represent our view only as of the date of this release, and which we assume no obligation to update. The financial results presented herein are preliminary and unaudited; final financial results will be included in the company’s Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015. New business wins and rewins do not represent firm orders or firm commitments from customers, but are based on various assumptions, including the timing and duration of product launches, vehicle production levels, customer price reductions and currency exchange rates.

Use of Non-GAAP Financial Information

This press release contains information about Visteon’s financial results which is not presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. The provision of these comparable GAAP financial measures for 2016 is not intended to indicate that Visteon is explicitly or implicitly providing projections on those GAAP financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the company at the date of this press release and the adjustments that management can reasonably predict.

Follow Visteon:

 

 

LOGO

Contact:

Media:

Jim Fisher

734-710-5557

734-417-6184 – mobile

jfishe89@visteon.com

Investors:

Bob Krakowiak

734-710-5793

bkrakowi@visteon.com

 

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VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, Dollars in Millions, Except Per Share Data)

 

     Three Months Ended
December 31
    Twelve Months Ended
December 31
 
     2015     2014     2015      2014  

Sales

   $ 809      $ 788      $ 3,245       $ 2,586   

Cost of sales

     695        671        2,815         2,246   
  

 

 

   

 

 

   

 

 

    

 

 

 

Gross margin

     114        117        430         340   

Selling, general and administrative expenses

     63        64        245         228   

Restructuring expense

     18        32        36         54   

Interest expense, net

     1        6        14         21   

Loss on debt extinguishment

     —          —          5         23   

Equity in net (loss) income of non-consolidated affiliates

     (1     (3     7         2   

Loss on divestiture

     105        —          105         —     

Gain on non-consolidated affiliate transactions

     —          —          62         2   

Other expense, net

     10        19        25         61   
  

 

 

   

 

 

   

 

 

    

 

 

 

(Loss) income from continuing operations before income taxes

     (84     (7     69         (43

(Benefit from) provision for income taxes

     (16     11        27         32   
  

 

 

   

 

 

   

 

 

    

 

 

 

Net (loss) income from continuing operations

     (68     (18     42         (75

Net income (loss) from discontinued operations, net of tax

     92        (96     2,286         (131
  

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss)

     24        (114     2,328         (206

Net income attributable to non-controlling interests

     3        24        44         89   
  

 

 

   

 

 

   

 

 

    

 

 

 

Net income (loss) attributable to Visteon Corporation

   $ 21      $ (138   $ 2,284       $ (295
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings (loss) per share data:

         

Basic earnings (loss) per share

         

Continuing operations

   $ (1.75   $ (0.52   $ 0.52       $ (2.14

Discontinued operations

     2.27        (2.60     53.48         (4.30
  

 

 

   

 

 

   

 

 

    

 

 

 

Basic earnings (loss) per share attributable to Visteon Corporation

   $ 0.52      $ (3.12   $ 54.00       $ (6.44
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per share

         

Continuing operations

   $ (1.75   $ (0.52   $ 0.51       $ (2.14

Discontinued operations

     2.27        (2.60     52.12         (4.30
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per share attributable to Visteon Corporation

   $ 0.52      $ (3.12   $ 52.63       $ (6.44
  

 

 

   

 

 

   

 

 

    

 

 

 

Average shares outstanding (in millions)

         

Basic

     40.6        44.3        42.3         45.8   

Diluted

     40.6        44.3        43.4         45.8   

Comprehensive income (loss):

         

Comprehensive income (loss)

   $ 119      $ (344   $ 2,424       $ (529

Comprehensive income (loss) attributable to Visteon Corporation

   $ 116      $ (346   $ 2,393       $ (582


VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited, Dollars in Millions)

 

     December 31
2015
    December 31
2014
 

ASSETS

    

Cash and equivalents

   $ 2,728      $ 476   

Short-term investments

     47        —     

Restricted cash

     8        9   

Accounts receivable, net

     502        531   

Inventories, net

     187        208   

Current assets held for sale

     17        1,660   

Other current assets

     564        250   
  

 

 

   

 

 

 

Total current assets

     4,053        3,134   

Property and equipment, net

     351        363   

Intangible assets, net

     133        156   

Investments in non-consolidated affiliates

     56        99   

Non-current assets held for sale

     —          1,426   

Other non-current assets

     89        145   
  

 

 

   

 

 

 

Total assets

   $ 4,682      $ 5,323   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Distribution payable

   $ 1,751      $ —     

Short-term debt, including current portion of long-term debt

     37        29   

Accounts payable

     482        485   

Accrued employee liabilities

     132        114   

Current liabilities held for sale

     9        987   

Other current liabilities

     361        217   
  

 

 

   

 

 

 

Total current liabilities

     2,772        1,832   

Long-term debt

     347        587   

Employee benefits

     268        489   

Deferred tax liabilities

     21        53   

Non-current liabilities held for sale

     —          432   

Other non-current liabilities

     75        109   

Stockholders’ equity

    

Preferred stock

     —          —     

Common stock

     1        1   

Stock warrants

     —          3   

Additional paid-in capital

     1,345        1,246   

Retained earnings

     1,194        661   

Accumulated other comprehensive loss

     (190     (299

Treasury stock

     (1,293     (747
  

 

 

   

 

 

 

Total Visteon Corporation stockholders’ equity

     1,057        865   

Non-controlling interests

     142        956   
  

 

 

   

 

 

 

Total equity

     1,199        1,821   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 4,682      $ 5,323   
  

 

 

   

 

 

 


VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 1

(Unaudited, Dollars in Millions)

 

     Three Months Ended
December 31
    Twelve Months Ended
December 31
 
     2015     2014     2015     2014  

OPERATING

        

Net income (loss)

   $ 24      $ (114   $ 2,328      $ (206

Adjustments to reconcile net income to net cash provided from operating activities:

        

Gain on Climate Transaction

     8        —          (2,324     —     

Gain on non-consolidated affiliate transactions

     —          —          (62     (2

Depreciation and amortization

     22        65        169        270   

Losses on divestitures and impairments

     104        138        121        326   

Pension settlement gain

     —          2        —          (23

Equity in net income of non-consolidated affiliates, net of dividends remitted

     1        3        1        10   

Non-cash stock-based compensation

     1        1        8        8   

Loss on debt extinguishment

     —          —          5        23   

Other non-cash items

     2        (3     6        11   

Changes in assets and liabilities:

        

Accounts receivable

     8        (126     1        (121

Inventories

     9        6        (20     (27

Accounts payable

     (15     80        33        22   

Accrued income taxes

     (129     —          6        14   

Other assets and other liabilities

     29        52        66        (21
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided from operating activities

     64        104        338        284   

INVESTING

        

Capital expenditures

     (36     (131     (187     (340

Short-term investments, net

     5        —          (47     —     

Loan to non-consolidated affiliate

     —          —          (10     —     

Net proceeds from Climate Divestiture

     —          —          2,664        —     

Proceeds from asset sales and business divestitures

     —          4        91        66   

Acquisition of business, net of cash acquired

     —          (3     (4     (311

Payments associated with business divestitures

     (141     (147     (156     (147

Other

     (1     (2     7        (8
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used by) provided from investing activities

     (173     (279     2,358        (740

FINANCING

        

Short-term debt, net

     3        (3     2        39   

Proceeds from issuance of debt, net of issuance costs

     —          1        —          619   

Principal payments on debt

     —          (2     (250     (18

Repurchase of common stock

     —          —          (500     (500

Repurchase of long-term notes

     —          —          —          (419

Dividends paid to non-controlling interests

     (24     (13     (55     (97

Exercised warrants and stock options

     16        —          40        17   

Stock based compensation tax withholding payments

     (10     —          (10     —     

Other

     —          2        (1     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used by financing activities

     (15     (15     (774     (359

Effect of exchange rate changes on cash and equivalents

     (7     (18     (20     (35
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash and equivalents

     (131     (208     1,902        (850

Cash and equivalents at beginning of period

     2,860        1,035        827        1,677   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and equivalents at end of period

   $ 2,729      $ 827      $ 2,729      $ 827   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

1  The Company has combined cash flows from discontinued operations with cash flows from continuing operations within the operating, investing and financing categories. As such, cash and equivalents above include amounts reflected in current assets held for sale on the Consolidated Balance Sheets.


VISTEON CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, Dollars in Millions)

Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the Company’s performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company’s operating activities across reporting periods. The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, restructuring expense, net interest expense, loss on debt extinguishment, equity in net loss (income) of non-consolidated affiliates, loss on divestiture, gain on non-consolidated affiliate transactions, other net expense, (benefit from) provision for income taxes, discontinued operations, net income attributable to non-controlling interests, non-cash stock-based compensation expense, pension settlement gains and other non-operating gains and losses. Because not all companies use identical calculations, this presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

 

     Three Months Ended      Twelve Months Ended  
     December 31      December 31  
     2015      2014      2015      2014  

Total Visteon

           

Electronics

   $ 98       $ 64       $ 348       $ 221   

Other

     (4      17         (12      6   

Corporate

     (15      (6      (54      (50
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

     79         75         282         177   
  

 

 

    

 

 

    

 

 

    

 

 

 

Depreciation and amortization

     23         16         85         70   

Restructuring expense

     18         32         36         54   

Interest expense, net

     1         6         14         21   

Loss on debt extinguishment

     —           —           5         23   

Equity in net loss (income) of non-consolidated affiliates

     1         3         (7      (2

Loss on divestiture

     105         —           105         —     

Gain on non-consolidated affiliate transactions

     —           —           (62      (2

Other expense, net

     10         19         25         61   

(Benefit from) provision for income taxes

     (16      11         27         32   

Net (income) loss from discontinued operations, net of tax

     (92      96         (2,286      131   

Net income attributable to non-controlling interests

     3         24         44         89   

Non-cash, stock-based compensation expense

     1         3         8         12   

Pension settlement gain

     —           —           —           (25

Other

     4         3         4         8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income (loss) attributable to Visteon

   $ 21       $ (138    $ 2,284       $ (295
  

 

 

    

 

 

    

 

 

    

 

 

 


     Three Months Ended     Twelve Months Ended      
     December 31     December 31     Estimated
     2015     2014     2015     2014     Full Year 2016 *

Electronics and corporate

          

Adjusted EBITDA

   $ 83      $ 58      $ 294      $ 171      $305 - $335

Depreciation and amortization

     22        15        83        59      90

Restructuring expense

     18        32        36        38      30 - 20

Interest expense, net

     1        6        14        21      15

Loss on debt extinguishment

     —          —          5        23      —  

Equity in net loss of non-consolidated affiliates

     1        3        5        6      —  

Other expense, net

     6        9        35        40      15

Provision for income taxes

     2        11        45        37      65

Net income attributable to non-controlling interests

     3        5        20        23      20

Non-cash, stock-based compensation expense

     1        3        8        12      8

Other

     4        —          4        (6   —  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

Net income (loss)

   $ 25      $ (26   $ 39      $ (82   $62 - $102

(Income) loss from discontinued operations, net of tax

     (92     96        (2,286     131     

All other loss (income), net of tax

     96        16        41        82     
  

 

 

   

 

 

   

 

 

   

 

 

   

Net income (loss) attributable to Visteon

   $ 21      $ (138   $ 2,284      $ (295  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

* Guidance excludes the other product group and discontinued operations.

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

Free Cash Flow and Adjusted Free Cash Flow: Free cash flow and Adjusted free cash flow are presented as supplemental measures of the Company’s liquidity that management believes are useful to investors in analyzing the Company’s ability to service and repay its debt. The Company defines Free cash flow as cash flow provided from operating activities less capital expenditures. The Company defines Adjusted free cash flow as cash flow provided from operating activities less capital expenditures, as further adjusted for restructuring and transformation-related payments. Free cash flow and Adjusted free cash flow include amounts associated with discontinued operations. Because not all companies use identical calculations, this presentation of Free cash flow and Adjusted free cash flow may not be comparable to other similarly titled measures of other companies.

 

     Three Months Ended      Twelve Months Ended  
     December 31      December 31  
     2015      2014      2015      2014  

Total Visteon

           

Cash provided from operating activities - Electronics and corporate

   $ 89       $ 83       $ 251       $ 39   

Cash (used by) provided from operating activities - discontinued operations and other

     (25      21         87         245   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash provided from operating activities total Visteon

   $ 64       $ 104       $ 338       $ 284   

Capital expenditures

     (36      (131      (187      (340
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash flow

   $ 28       $ (27    $ 151       $ (56

Restructuring/transformation-related payments

     34         74         160         167   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted free cash flow

   $ 62       $ 47       $ 311       $ 111   
  

 

 

    

 

 

    

 

 

    

 

 

 


     Three Months Ended     Twelve Months Ended      
     December 31     December 31     Estimated
     2015     2014     2015     2014     Full Year 2016 *

Electronics and corporate

          

Cash provided from operating activities

   $ 89      $ 83      $ 251      $ 39      $125 - $155

Capital expenditures

     (39     (48     (102     (104   90 - 80
  

 

 

   

 

 

   

 

 

   

 

 

   

 

Free cash flow

   $ 50      $ 35      $ 149      $ (65   $35 - $75

Restructuring/transformation-related payments

     16        33        63        80      75
  

 

 

   

 

 

   

 

 

   

 

 

   

 

Adjusted free cash flow

   $ 66      $ 68      $ 212      $ 15      $110 - $150
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

* Guidance excludes the other product group and discontinued operations.

Free cash flow and Adjusted free cash flow are not recognized terms under U.S. GAAP and do not purport to be a substitute for cash flows from operating activities as a measure of liquidity. Free cash flow and Adjusted free cash flow have limitations as analytical tools as they do not reflect cash used to service debt and do not reflect funds available for investment or other discretionary uses. In addition, the Company uses Free cash flow and Adjusted free cash flow (i) as factors in incentive compensation decisions and (ii) for planning and forecasting future periods.

Adjusted Net Income and Adjusted Earnings Per Share: Adjusted net income and Adjusted earnings per share are presented as supplemental measures that management believes are useful to investors in analyzing the Company’s profitability. The Company defines Adjusted net income as net income attributable to Visteon adjusted to eliminate the impact of restructuring expense, loss on debt extinguishment, loss on divestiture, gain on non-consolidated affiliate transactions, other net expenses, other non-operating gains and losses and discontinued operations. The Company defines Adjusted earnings per share as Adjusted net income divided by diluted shares. Because not all companies use identical calculations, this presentation of Adjusted net income and Adjusted earnings per share may not be comparable to other similarly titled measures of other companies.

 

     Three Months Ended      Twelve Months Ended  
     December 31      December 31  
     2015      2014      2015      2014  

Diluted earnings (loss) per share:

           

Net income (loss) attributable to Visteon

   $ 21       $ (138    $ 2,284       $ (295

Average shares outstanding, diluted (in millions)

     40.6         44.3         43.4         45.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted earnings (loss) per share

   $ 0.52       $ (3.12    $ 52.63       $ (6.44

Adjusted earnings per share:

           

Net income (loss) attributable to Visteon

   $ 21       $ (138    $ 2,284       $ (295

Restructuring expense

     18         32         36         54   

Loss on debt extinguishment

     —           —           5         23   

Loss on divestiture

     105         —           105         —     

Gain on non-consolidated affiliate transactions

     —           —           62         2   

Other expense, net

     10         19         25         61   

Other

     (14      22         15         54   

Income (loss) from discontinued operations, net of tax

     92         (96      2,286         (131
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income

   $ 48       $ 31       $ 122       $ 26   

Average shares outstanding, diluted (in millions)

     40.6         44.3         43.4         45.8   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted earnings per share

   $ 1.18       $ 0.70       $ 2.81       $ 0.57   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income and Adjusted earnings per share are not recognized terms under U.S. GAAP and do not purport to be a substitute for profitability. Adjusted net income and Adjusted earnings per share have limitations as analytical tools as they do not consider certain restructuring and transaction-related payments and/or expenses. In addition, the Company uses Adjusted net income and Adjusted earnings per share for planning and forecasting future periods.