Visteon Announces First-Quarter 2010 Results

The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 proceedings to each of these constituencies. A plan of reorganization could result in holders of our liabilities and/or securities receiving no value for their interests. Because of such possibilities, the value of these liabilities and/or securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.

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.

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Millions, Except Per Share Data)

(Unaudited)





Three Months Ended


March 31





2010

2009

Net sales



Products

$1,846

$1,295

Services

58

57


1,904

1,352

Cost of sales



Products

1,429

1,251

Services

57

56


1,486

1,307

Gross margin

418

45

Selling, general and administrative expenses

113

108

Reorganization items, net

30

-

Restructuring expenses

8

27

Reimbursement from Escrow Account

-

62

Deconsolidation gain

-

95

Asset impairment and loss on divestitures

21

-

Operating income

246

67

Interest expense, net

3

51

Equity in net income of non-consolidated affiliates

30

7

Income before income taxes

273

23

Provision for income taxes

25

14

Net income

248

9

Net income attributable to noncontrolling interests

15

7

Net income attributable to Visteon

$233

$2




Per share data



Net earnings per share attributable to Visteon

$1.79

$0.02




Average shares outstanding (millions)



Basic

130.3

130.5

Diluted

130.3

130.5



VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)





(Unaudited)



March 31

December 31


2010

2009




ASSETS






Cash and equivalents

$964

$962

Restricted cash

135

133

Accounts receivable, net

1,072

1,055

Inventories, net

353

319

Other current assets

318

236

Total current assets

2,842

2,705




Property and equipment, net

1,849

1,936

Equity in net assets of non-consolidated affiliates

320

294

Other non-current assets

87

84

Total assets

$5,098

$5,019







LIABILITIES AND SHAREHOLDERS' DEFICIT






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

$216

$225

Accounts payable

1,037

977

Accrued employee liabilities

163

161

Other current liabilities

315

302

Total current liabilities

1,731

1,665




Long-term debt

10

6

Employee benefits

519

568

Deferred income taxes

171

159

Other non-current liabilities

247

257

Liabilities subject to compromise

2,828

2,819







Shareholders' deficit:



Preferred stock (par value $1.00, 50 million shares authorized, none outstanding)

-

-

Common stock (par value $1.00, 500 million shares authorized, 131 million shares issued, 130 million shares outstanding)

131

131

Stock warrants

127

127

Additional paid-in capital

3,408

3,408

Accumulated deficit

(4,343)

(4,576)

Accumulated other comprehensive income

(51)

142

Other

(4)

(4)

Total Visteon Corporation shareholders' deficit

(732)

(772)

Noncontrolling interests

324

317

Total shareholders' deficit

(408)

(455)

Total liabilities and shareholders' deficit

$5,098

$5,019



VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Millions)

(Unaudited)





Three Months Ended


March 31


2010

2009

Operating activities



Net income

$248

$9

Adjustments to reconcile net income to net cash provided from (used by) operating activities:



Depreciation and amortization

73

78

OPEB and pension amortization and curtailment

(240)

(8)

Deconsolidation gain

-

(95)

Asset impairments and loss on divestitures

21

-

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

(29)

(7)

Reorganization items

30

-

Other non-cash items

11

2

Changes in assets and liabilities:



Accounts receivable

(95)

15

Inventories

(38)

3

Accounts payable

49

(122)

Other

10

(150)

Net cash provided from (used by) operating activities

40

(275)




Investing activities



Capital expenditures

(25)

(25)

Cash associated with deconsolidation

-

(11)

Other

1

2

Net cash used by investing activities

(24)

(34)




Financing activities



Short-term debt, net

-

(15)

Cash restriction

(2)

(163)

Proceeds from issuance of debt, net of issuance costs

4

39

Principal payments on debt

(12)

(45)

Other, including book overdrafts

(1)

(56)

Net cash used by financing activities

(11)

(240)

Effect of exchange rate changes on cash

(3)

(27)

Net increase (decrease) in cash and equivalents

2

(576)

Cash and equivalents at beginning of year

962

1,180

Cash and equivalents at end of period

$964

$604



VISTEON CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Dollars in Millions)

(Unaudited)




In this press release the Company has provided information regarding certain non-GAAP financial measures including "Adjusted EBITDA" and "free cash flow."  Such non-GAAP financial measures are reconciled to their closest GAAP financial measure in the schedules below.




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 continuing operating activities across reporting periods. The Company defines Adjusted EBITDA as net income (loss) attributable to the Company, plus net interest expense, provision for income taxes and depreciation and amortization, as further adjusted to eliminate the impact of asset impairments, non-operating gains and losses, net unreimbursed restructuring expenses and other reimbursable costs, and reorganization items. Because not all companies use identical calculations this presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.







Three Months Ended


March 31





2010

2009




Net income attributable to Visteon

$233

$2

Interest expense, net

3

51

Provision for income taxes

25

14

Depreciation and amortization

73

78

Asset impairments, loss on divestiture and deconsolidation gain

21

(95)

Restructuring and other related costs

8

34

Reimbursement from escrow account

-

(62)

Employee benefit litigation

17

-

OPEB termination and wind-down revenue

(249)

-

Reorganization items

30

-

Adjusted EBITDA

$161

$22



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




Free Cash Flow : Free cash flow is presented as a supplemental measure of the Company's liquidity that management believes is useful to investors in analyzing the Company's ability to service and repay its debt. The Company defines free cash flow as cash flow from operating activities less capital expenditures. Because not all companies use identical calculations, this presentation of free cash flow may not be comparable to other similarly titled measures of other companies.







Three Months Ended


March 31


2010

2009




Net cash provided from (used by) operating activities

$40

$(275)

Capital expenditures

(25)

(25)

Free cash flow

$15

$(300)



Free cash flow is not a recognized term under GAAP and does not purport to be a substitute for cash flows from operating activities as a measure of liquidity. Free cash flow has limitations as an analytical tool and does not reflect cash used to service debt and does not reflect funds available for investment or other discretionary uses.  In addition, the Company uses free cash flow (i) as a factor in incentive compensation decisions, and (ii) for planning and forecasting future periods.







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