UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
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 of Delaware
38-3519512
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Village Center Drive,
Van Buren Township,
Michigan
48111
(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 Class
Trading Symbol(s)
Name of Each Exchange on which Registered
Common Stock, par value $0.01 per share
VC
The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes ☐ No ☑
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 ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ 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 ☑ 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☑ No
The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant on June 30, 2024 (the last business day of the most recently completed
second fiscal quarter) was approximately $3.0 billion.
As of February 7, 2025, the registrant had outstanding 27,080,483 shares of common stock.
Document Incorporated by Reference
Document
Where Incorporated
2025 Proxy Statement
Part III (Items 10, 11, 12, 13 and 14)
1
Visteon Corporation and Subsidiaries
Index
Part I
Page
Item 1. Business
3
Item 1A. Risk Factors
8
Item 1B. Unresolved Staff Comments
15
Item 1C. Cybersecurity
15
Item 2. Properties
16
Item 3. Legal Proceedings
17
Item 4. Mine Safety Disclosures
17
Item 4A. Executive Officers
18
Part II
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
20
Item 6. [Reserved]
21
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
22
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
34
Item 8. Financial Statements and Supplementary Data
35
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
85
Item 9A. Controls and Procedures
85
Item 9B. Other Information
85
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
85
Part III
Item 10. Directors, Executive Officers and Corporate Governance
86
Item 11. Executive Compensation
86
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
87
Item 13. Certain Relationships and Related Transactions, and Director Independence
87
Item 14. Principal Accountant Fees and Services
87
Part IV
Item 15. Exhibits and Financial Statement Schedules
88
Item 16. Form 10-K Summary
88
Signatures
92
2
Part I
Item 1.
Business
Description of Business
Visteon Corporation (the "Company" or "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, including BMW, Ford, Geely, General Motors, Honda, Jaguar/Land Rover,
Mahindra, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Renault, Stellantis, Tata, Toyota, and Volkswagen. Visteon products align with key industry trends and
include digital instrument clusters, cockpit domain controllers, advanced displays, Android-based infotainment systems, and battery management systems.
Visteon is headquartered in Van Buren Township, Michigan, and has an international network of manufacturing operations, technical centers, and joint venture
operations dedicated to the design, development, manufacture, and support of its product offerings and its global customers. The Company's manufacturing and
engineering footprint is primarily located in Brazil, Bulgaria, China, India, Japan, Mexico, Portugal, Slovakia, Thailand, and Tunisia.
The Company’s Industry
The Company operates in the automotive industry which is cyclical and highly sensitive to general economic conditions. The Company believes that future
success in the automotive industry is, in part, dependent on alignment with customers to support their efforts to effectively meet the challenges associated with
the following significant trends and developments in the global automotive industry:
•
Electronic content and connectivity - Digital and portable technologies have dramatically influenced the lifestyle of today’s consumers, who expect
products that enable such a lifestyle. The vehicle cockpit is transforming into a fully digital and connected environment with multi-display systems
incorporating larger, curved, and more complex displays and the consolidation of discrete electronic control units into a multi-core domain controller.
Consumer demand for improved vehicle performance and functionality is driving increased electronic content of vehicles.
•
Electric and hybrid vehicles - The trend towards electrification continues, driven primarily by government incentives and regulatory requirements. Battery
electric vehicles can have increased digital content with all-digital cockpit electronics and require a battery management system and high-voltage power
electronics. Other powertrains, such as hybrid, plug-in hybrids, and range extenders, have also increased in popularity and can require some of the same
products as full electric vehicles.
•
Government Regulations - Governments continue to focus regulatory efforts on safer and cleaner transportation. These requirements have increased
demand for electronic components that can reduce weight, expedite assembly, enhance fuel economy, improve emissions, increase safety, and enhance
vehicle performance. Accordingly, Original Equipment Manufacturers ("OEMs") are working to improve occupant and pedestrian safety by incorporating
more safety-oriented technology in their vehicles. Additionally, in-vehicle connectivity has increased the need for robust cybersecurity systems to protect
data, applications, and associated infrastructure. Security features are evolving with advances in sensors and suppliers must enable the security/safety
initiatives of their customers including the development of such new advances.
•
Advanced driver assistance systems and autonomous driving - The industry continues to advance toward semi-autonomous and autonomous vehicles. The
Society of Automotive Engineers has defined five levels of autonomy ranging from levels one and two with driver-assist functions whereby the driver is
responsible for monitoring the environment, to level five with full autonomy under all conditions. Levels one and two are already popular in the market.
Levels three and above utilize a combination of sensors, radars, cameras and LiDARs, requiring sensor fusion and machine learning technologies, as the
system assumes the role of monitoring the environment. Level three includes features such as highway pilot and parking assist technology, for which an
increased market penetration rate is expected over the medium term.
•
Vehicle standardization - OEMs continue to standardize vehicle platforms on a global basis, resulting in a lower number of individual vehicle platforms,
design cost savings, and further scale of economies through the production of a greater number of models from each platform. Having operations in the
geographic markets where OEMs produce global platforms enables suppliers to meet OEMs’ needs more economically and efficiently, thus making global
coverage a source of significant competitive advantage for suppliers with a global footprint. Additionally, OEMs are looking to suppliers for increased
collaboration to lower costs, reduce risks, and decrease overall time to market. Suppliers that can provide fully engineered systems and pre-assembled
combinations of component parts are positioned to leverage the trend toward system sourcing. As vehicles become more connected and cockpits more
digitized, suppliers that can deliver modular hardware
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architectures, “open” software architectures, and a software platform approach will be poised to help OEMs achieve greater reuse of validated hardware
circuitry, design scalability, and faster development cycles.
The Company's Segment
The Company reports operating and financial results in a single segment based on the consolidated information used by management in evaluating the financial
performance of our business and allocating resources. This single segment reflects the Company’s core business: Electronics. The Electronics segment provides
vehicle cockpit electronics products to customers, including digital instrument clusters, cockpit domain controllers, advanced 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.
The Company’s Products
The Company designs and manufactures innovative automotive electronics and connected car solutions further described below:
Instrument Clusters
The Company offers a full line of instrument clusters, from standard analog gauge clusters to high-resolution, all-digital, fully reconfigurable, 2-D and 3-D
display-based devices. The Company uses a platform approach to accelerate development and manage multiple vehicle variants. These clusters can use a wide
range of display technologies, graphic capabilities, decorative elements, and free-form and curved displays. Premium clusters support complex graphics and
feature embedded functionality such as driver monitoring, camera inputs, and ambient lighting.
Information Displays
The Company offers a range of information displays for various applications within the cockpit, incorporating a sleek profile, high perception quality displays
and touch sensors designed to deliver high performance for the automotive market. These displays can integrate a range of user interface technologies and
graphics management capabilities, such as active privacy, TrueColor
enhancement, local dimming, cameras, optics, haptic feedback, and light effects. The
Company offers a new generation of large, curved, complex multi-display modules with optical performance designed to be competitive with mobile devices.
The Company's microZone™ display technology offers high contrast and brightness and a wide color gamut that enables automotive displays to cost-
effectively achieve life-like imaging capability on par with consumer mobile devices, without sacrificing reliability or life span. The Company also developed
the first bendable glass multi-display cockpit in the automotive industry.
Infotainment
The Company offers a range of infotainment and connected car solutions, including scalable Android infotainment for seamless connectivity including
integration with Android Auto and Apple CarPlay technology for wireless smartphone projection. The company offers a display audio and embedded
infotainment platform that is based on Android automotive operating system, enabling third-party developers to create apps easily through a software
development kit and software simulation of the target hardware system. Additionally, Visteon offers an onboard artificial intelligence (“AI”)-based voice
assistant with natural language understanding.
SmartCore Cockpit Domain Controller
The Company offers SmartCore™, an automotive-grade, integrated domain controller approach, which can independently operate the infotainment system,
instrument cluster, head-up display, rear-seat displays, and other features on a single, multi-core chip to improve efficiency, create a unified experience across
products, and reduce power consumption and cost. The SmartCore domain controller includes: SmartCore Runtime, middleware enabling communication
between domains and apps to be shown on any display; and SmartCore Studio, a PC-based configuration tool to generate hypervisor configurations. The
SmartCore domain controller seamlessly connects the human machine interaction ("HMI") across an increasing number of display domains, such as surround
view and in-cabin sensing of driver drowsiness, attentiveness, and facial recognition. The latest generation of SmartCore utilizes high performance computing
technology and integrates processing of multiple camera inputs to deliver a set of advance driver assistance features. The latest generation of SmartCore is
offered with a suite of connected services including an over the air ("OTA") update solution and an automotive App Store.
TM
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Battery Management Systems (“BMS”)
The Company offers configurable battery management systems that support both wired and wireless battery sensing and control. Visteon’s wireless BMS
reliably and securely replaces wired communication between battery modules to improve the lifetime enterprise cost, battery weight, and packaging efficiency,
and facilitates second-life battery repurposing. By providing a platform approach that can support multiple charging protocols and flexible battery pack
architectures, Visteon provides a robust design-to-production strategy that enables advanced features that are fast-to-market.
High-Voltage Power Electronics
The Company offers integrated and scalable power electronics units that support conversion of grid-to-battery pack electric current. Visteon’s integrated power
electronics solutions combine a bi-directional on-board charging module with a DC-to-DC converter to ensure a systems approach that maximizes power
conversion efficiency. Visteon’s solution is scalable to support between 400-volt to 800-volt systems with higher rate battery charging speeds. Visteon’s design
provides a solution that allows for fast-charging and high-efficiency in a packaging that reduces weight and space to improve overall system cost.
The Company’s Customers
The Company's ultimate customers are global vehicle manufacturers including BMW, Ford, Geely, General Motors, Honda, Jaguar/Land Rover, Mahindra,
Mazda, Mercedes-Benz, Mitsubishi, Nissan, Renault, Stellantis, Tata, Toyota, and Volkswagen.
The following is a summary of customers representing greater than 10 percent of the Company's annual net sales:
Percentage of Total Net Sales
December 31,
2024
2023
2022
Ford
23 %
22 %
22 %
General Motors
15 %
12 %
9 %
The Company typically supplies products to OEM customers through purchase orders, which are usually governed by general terms and conditions established
by each OEM. Although the terms and conditions vary from customer to customer, they typically contemplate a relationship under which customers place
orders for their requirements of specific components supplied for particular vehicles but are not required to purchase any minimum quantities. Individual
purchase orders can be cancelled for cause, non-performance, and, in most cases, insolvency or certain change in control events. Additionally, many of
Visteon's OEM customers have the option to terminate contracts for convenience; this option permits the OEM customers to impose pressure on pricing during
the life of the vehicle program or issue purchase orders for less than the duration of the vehicle program. This has the potential to reduce the Company’s profit
margin and increases the risk of loss of future sales under those purchase contracts.
The Company manufactures and ships based on customer release schedules, normally provided on a weekly basis, which can vary based on OEM automotive
production or dealer inventory levels. Although customer programs typically extend to future periods and although there is an expectation that the Company
will supply certain levels of OEM production in those future periods, customer agreements (including the applicable terms and conditions) do not necessarily
constitute firm orders.
The price related to these products is typically initially negotiated on an annual basis over the vehicle platform's life cycle. To the extent there are subsequent
contractual price reductions, these reductions are intended to reflect the Company's ability to reduce cost through such factors as manufacturing productivity
enhancements, material cost reductions, and design-related cost improvements. Certain products may be excluded from such reductions or experience price
increases due to shortages of material or other increases in supply chain or other related costs. The Company has an aggressive cost control program that
focuses on reducing its total costs intended to offset customer price reductions or negotiating recoveries for increases. However, there can be no assurance that
the Company’s cost reduction or recovery efforts will be sufficient to fully offset such price changes.
The terms and conditions generally require a warranty on products sold. In most cases, the warranty period is the same as the warranty offered by the OEM to
the ultimate customer. The Company may also be required to share in all or part of recall costs if the OEM recalls vehicles for defects attributable to Visteon
products.
5
The Company’s Competition
The automotive sector remains highly competitive resulting from the ongoing industry consolidation. OEMs rigorously evaluate suppliers on the basis of
financial viability, product quality, price competitiveness, technical expertise, development capability, new product innovation, reliability and timeliness of
delivery, product design, manufacturing capability, flexibility, customer service, and overall management. The Company's primary independent competitors
include, but are not limited to, Alpine Electronics, Aptiv PLC, Continental AG, Denso Corporation, Forvia, Harman International Industries, Incorporated (a
subsidiary of Samsung Electronics Co. Ltd.), Hitachi Ltd., Hyundai Mobis, Innolux Corporation, LG Electronics, Marelli Holdings Co., Ltd., Nippon Seiki,
Panasonic Corporation, Preh GmbH, Robert Bosch GmbH, and Vitesco Technologies.
The Company’s Business Seasonality and Cyclicality
The Company’s business is moderately seasonal because its largest North American customers typically cease production for approximately two weeks in July
for model year changeovers and approximately one week in December during the winter holidays. Customers in Europe historically shut down vehicle
production during a portion of August and one week in December. In China, customers typically shut down approximately one week in early October and one
week in January or February. Additionally, third-quarter automotive production is traditionally lower as new vehicle models enter production.
Corporate Sustainability and Social Responsibility
Attract and Retain
The Company’s ability to sustain and grow its business requires the recruitment, retention, and development of a highly skilled and diverse workforce. The
Company’s Chief People Officer, reporting directly to Chief Executive Officer ("CEO"), oversees its global talent processes to attract, develop, and retain its
employees. To attract the best talent, the Company offers market competitive compensation and benefits around the globe, annual and long-term incentive
programs, and health and wellness benefits. The Company also provides a variety of resources to help its employees grow in their current roles and build new
skills. Hundreds of online courses are available in the Company’s learning management system and individual development plans are encouraged for all of our
employees. The Company continues to build tools to be used by leaders to develop employees in their current role and create new opportunities within the
organization to learn and grow. Because retention of the employee base is significant to its business strategy, executive management discusses it with the board
of directors (the "Board of Directors" or "Board") on a regular basis.
Workforce
Visteon’s strength comes from a workforce of approximately 10,000 employees operating in approximately 18 countries globally. The Company's workforce is
globally distributed with 27% of employees located in the Americas, 30% in Europe, 13% in China, and 30% in the remaining Asia Pacific region. Visteon
believes that all employees are leaders and expects leaders to drive operational and financial results and build strong teams.
Many of the Company’s employees are members of industrial trade unions and confederations within their respective countries. Often these organizations
operate under collectively bargained contracts that are not specific to any one employer. The Company constantly works to establish and maintain positive,
cooperative relations with its unions and work representatives around the world.
Culture
A strong culture requires an environment where the contributions of all employees are encouraged and valued. As a global organization, the Company
embraces human differences and harnesses the power of its employees’ varied backgrounds, cultures, and experiences because it is the right thing to do for its
people and it creates a competitive business advantage. As of December 31, 2024, the percentage of Visteon's global workforce represented by females was
approximately 38%.
The Company encourages many forms of communication such as global town hall employee meetings, informal small-group employee discussions, and an
open-door policy so all employees have direct access to senior leadership and have the opportunity to ask questions, make suggestions, and provide input. As
stated in one of the Company's four core beliefs and values, “We treat each other with respect and embrace our differences.”
6
Workplace Safety
The Company requires protective equipment, enforces comprehensive safety policies and procedures, and encourages its employees and leaders to continually
look for ways to improve workplace safety. It has implemented and maintains a health and safety management system that is certified to the OHSAS 18001 or
ISO 45001 standard.
Regulation
Visteon operates in a constantly evolving global regulatory environment and is subject to numerous and varying regulatory requirements for its product
performance and material content. Visteon strives to identify potential regulatory and quality risks early in the design and development process and proactively
manage them throughout the product lifecycle through the use of routine assessments, protocols, standards, performance measures, and audits. New regulations
and changes to existing regulations are managed in collaboration with the OEM customers and implemented through Visteon’s global systems and procedures
designed to ensure compliance with existing laws and regulations.
Visteon works collaboratively with a number of stakeholder groups including government agencies, customers, and suppliers to proactively engage in federal,
state, and international public policy processes.
Environmental, Health, Safety, and Legal Matters
Visteon is involved in various lawsuits, claims and proceedings related to the operation of its businesses, including those pertaining to product liability,
environmental, safety and health, intellectual property, employment, commercial and contractual matters, tax, and various other matters. Although the outcome
of such lawsuits, claims and proceedings cannot be predicted with certainty and some may be disposed of unfavorably to Visteon, it is management's opinion
that none of these will have a material adverse effect on Visteon's financial position, results of operations, or cash flows. Costs related to such matters were not
material to the periods presented. Further details are provided in Part II, Item 8 of this Annual Report on Form 10-K in Note 19, "Commitments and
Contingencies," of the notes to consolidated financial statements.
Board Oversight of Environmental, Social, and Governance Practices
The Company and its Board of Directors believe positive and responsible business practices strengthen the Company, increase its connection with the
stockholders, and help it to better serve its customers and the communities in which it operates. The Company’s commitment to social responsibility extends to
a variety of areas including the environment, anti-corruption and trade compliance, responsible sourcing, human rights, labor practices, and worker health and
safety. In light of the continued importance of these matters, the Board of Directors and management have developed a multi-year roadmap to enhance the
Company’s sustainability and social responsibility programs and disclosures, including assessment of the potential risks associated with climate change. This
roadmap includes near-term environmental targets for 2025 aimed at reducing energy consumption, solid waste, water and the reduction of scope 1 and scope 2
CO emissions through the use of renewable energy. The Company’s longer term greenhouse gas ("GHG") emission reduction target for 2030 which includes
scope 3 CO emissions, has been validated by the Science Based Targets initiative ("SBTi") and the Company is working to be carbon neutral by 2040.
Management provides regular reports and presentations to the Corporate Sustainability and Governance Committee regarding progress toward achieving these
targets. The full Board of Directors has oversight of the Company’s environmental and social initiatives as part of its regular strategic reviews of the
Company’s operations, products and technologies.
The Company’s Product Research and Development
The Company’s research and development efforts are intended to maintain leadership positions in core products and provide the Company with a competitive
edge as it seeks additional business with new and existing customers. The Company also works with technology development partners, including customers, to
develop technological capabilities and new products and applications.
The Company’s Intellectual Property
The Company owns significant intellectual property, including a number of patents, copyrights, proprietary tools and technologies, trade secrets, and numerous
licensing arrangements. Although the Company’s intellectual property plays an important role in maintaining its competitive position, no single patent,
copyright, proprietary tool or technology, trade secret or license, or group of related patents, copyrights, proprietary tools or technologies, trade secrets or
licenses is of such value to the
2
2
7
Company that its business would be materially affected by the expiration or termination thereof. The Company’s general policy is to apply for patents on an
ongoing basis, in appropriate countries, on its patentable developments that are considered to have commercial significance. The Company also views its name
and mark as significant to its business as a whole. In addition, the Company holds rights in a number of other trade names and marks applicable to certain of its
businesses and products that it views as important to such businesses and products.
The Company’s International Operations
Financial information about sales and net property by major geographic region can be found in Note 20, "Segment Information and Revenue Recognition" to
the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
The Company’s Raw Materials and Suppliers
Raw materials used by the Company in the manufacture of its products include electronics components, resins, and precious metals. While generally the supply
of the materials used are available from numerous sources, semiconductor suppliers and silicon wafer production is concentrated. In general, the Company does
not carry inventories of raw materials in excess of those reasonably required to meet production, shipping schedules, and customer safety stock requirements.
The Company monitors its supply base and endeavors to work with suppliers and customers to mitigate the impact of potential material shortages and supply
disruptions.
The automotive supply industry is subject to inflationary pressures with respect to raw materials, labor, and associated freight costs, which can place
operational and financial burdens on the entire supply chain. Accordingly, the Company continues to take actions with its customers and suppliers to mitigate
the impact of these inflationary pressures in the future. Actions to mitigate inflationary pressures with customers include collaboration on alternative product
designs and material specifications, contractual price escalation clauses, and negotiated customer recoveries. Actions to mitigate inflationary pressures with
suppliers include aggregation of purchase requirements to achieve optimal volume benefits, negotiation of cost reductions, and identification of more cost
competitive suppliers. While these actions are designed to offset the impact of inflationary pressures, the Company cannot provide assurance that it will be
successful in fully offsetting increased costs resulting from inflationary pressures.
The Company’s Website and Access to Available Information
The Company’s current and periodic reports filed with the United States Securities and Exchange Commission (“SEC”), including amendments to those
reports, may be obtained through its internet website at www.visteon.com free of charge as soon as reasonably practicable after the Company files these reports
with the SEC. A copy of the Company’s code of business conduct and ethics for directors, officers and employees of Visteon and its subsidiaries, entitled
“Ethics and Integrity Policy,” the Corporate Governance Guidelines adopted by the Company’s Board of Directors and the charters of each committee of the
Board of Directors are also available on the Company’s website. A printed copy of the Company’s Ethics and Integrity Policy may be requested by contacting
the Company’s Investor Relations department in writing at One Village Center Drive, Van Buren Township, MI 48111; by phone (734) 710-7893; or via email
at investor@visteon.com. The Company’s website and the information contained therein or connected thereto are not intended to be incorporated by reference
into this Annual Report on Form 10-K.
Item 1A. Risk Factors
Set forth below are some of the most significant risks and uncertainties facing the Company. Additional risks and uncertainties, including those not presently
known or that the Company believes to be immaterial, also may adversely affect the Company. Should any such risks and uncertainties develop into actual
events, these developments could have material adverse effects on the Company’s business, operating results, financial condition, cash flow and/or the value of
the Company’s securities. This information should be considered in connection with the description of the Company’s business, Management’s Discussion &
Analysis, and the Company’s financial statements and accompanying notes.
Operations Related Risk Factors
The Company could be negatively impacted by shortages in deliveries from its supply base, other supplier distress, or suppliers demanding price increases
8
In an effort to manage and reduce the costs of purchased goods and services, the Company, like many automotive suppliers and automakers, has been
consolidating its supply base. As a result, the Company is dependent on single or limited sources of supply for certain components used in the manufacture of
its products including semiconductor chips, which are integral components of new vehicles and are embedded in multiple vehicle systems, including cockpit
electronics. As a result of the semiconductor shortages in recent years, the Company continues to work closely with its suppliers and customers to minimize
any potential adverse impacts of the semiconductor supply shortage and monitor the availability of semiconductor microchips and other component parts and
raw materials, customer vehicle production schedules, and any other supply chain inefficiencies that may arise, due to this or any other issue. If shortages of
semiconductors or other critical components from other suppliers develop, continue longer than anticipated, or worsen, it could impact the Company's ability to
meet its production schedules for some of its key products or to ship such products to its customers in a timely fashion. Furthermore, unfavorable economic or
industry conditions could result in financial distress within the Company's supply base, thereby increasing the risk of supply disruption.
Such disruptions could be caused by any one of a myriad of potential problems, such as closures of one of the Company’s or its suppliers’ plants or critical
manufacturing lines due to strikes, manufacturing quality issues, mechanical breakdowns, electrical outages, fires, explosions, or political upheaval, as well as
logistical complications due to weather, global climate change, volcanic eruptions, or other natural or nuclear disasters, mechanical failures, delayed customs
processing, the spread of an infectious disease, virus or other widespread illness and more. Additionally, as the Company grows in best cost countries, the risk
for such disruptions is heightened. Similarly, a potential quality issue could force the Company to halt deliveries while it validates the products. Even where
products are ready to be shipped, or have been shipped, delays may arise before they reach the customer. The Company’s customers may halt or delay
production if one of their other suppliers fails to deliver necessary components. This may cause the Company’s customers to suspend their orders or instruct us
to suspend delivery of the Company's products, which may adversely affect the Company's financial performance.
If the Company were to fail to make timely deliveries in accordance with contractual obligations, the Company generally must absorb its own costs for
identifying and solving the “root cause” problem as well as expeditiously producing replacement components or products. Generally, the Company must also
absorb the costs associated with “catching up,” such as overtime and premium freight. Additionally, if the Company is the cause for a customer being forced to
halt production the customer may seek to recoup all of its losses and expenses from the Company. Certain customers have communicated that they expect such
reimbursement and are reserving their rights to claim damages arising from supply shortages. Should the Company be unsuccessful in its defense of such
claims and any potential claims these losses and expenses could be significant, and may include consequential losses such as lost profits. Any supply-chain
disruption, however small, could cause the complete shutdown of an assembly line of one of the Company’s customers, and any such shutdown could lead to
material claims for compensation.
The Company has experienced and may in the future experience supplier price increases that could negatively affect its operations and profitability. The price
increases are often driven by raw material pricing and availability, component or part availability, manufacturing capacity, industry allocations, logistics
capacity, natural disasters or pandemics, the effects of climate change, inflation, sudden increases in border tariffs, and significant changes in the financial or
business condition of its suppliers
The Company’s substantial international operations make it vulnerable to risks associated with doing business in foreign countries
The Company has manufacturing and distribution facilities in many foreign locations. International operations are subject to certain risks inherent in doing
business abroad, including, but not limited to:
•
changes to international trade agreements;
•
local economic conditions, expropriation and nationalization, foreign exchange rate fluctuations, and currency controls;
•
withholding, border, and other taxes on remittances and other payments by subsidiaries;
•
investment restrictions or requirements;
•
export and import restrictions, including increases in border tariffs;
•
the ability to effectively enforce intellectual property rights;
•
new or additional governmental sanctions on doing business with or in certain countries or with certain persons; and
•
increases in working capital requirements related to long supply chains.
Additionally, the Company’s global operations may also be adversely affected by political events, domestic or international terrorist events, and hostilities or
complications due to natural or other disasters. These or any further political or governmental developments or health concerns in Mexico, China, or other
countries in which the Company operates or where its suppliers are
9
located could result in social, economic, and labor instability. These uncertainties could have a material adverse effect on the continuity of the Company’s
business, results of operations, and financial condition.
Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial duties and tariffs for qualifying
imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of trade,
and in particular increased trade restrictions, tariffs or taxes on imports from countries where the Company manufactures products, such as Mexico and China,
could have a material adverse effect on its business and financial results. For example, in February 2025, the U.S. government imposed or threatened to impose
new tariffs on imported products from Mexico, Canada and China and reciprocal tariffs globally. The impact of these tariffs is subject to a number of factors,
including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such
actions that the target countries may take and any mitigating actions that may become available. Despite recent trade negotiations between the U.S. and the
Mexican, Canadian and Chinese governments, given the uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional
tariffs or trade barriers by the U.S., Mexico, Canada, China or other countries, the Company can provide no assurance that any strategies it implements to
mitigate the impact of such tariffs or other trade actions will be successful. Management continues to monitor the volatile geopolitical environment to identify,
quantify and assess proposed or threatened duties, taxes or other business restrictions which could adversely affect our business and financial results.
In addition, U.S. trade legislation continues to evolve related to barriers on the use of various products and technology from around the world including but not
limited to the (i) Uyghur Forced Labor Prevention Act and (ii) Securing the Information and Communications Technology and Services Supply Chain:
Connected Vehicles). The Company can provide no assurance that any strategies we implement to mitigate the impact of any trade actions will be successful.
The Company has invested significantly and is expected to continue to invest in joint ventures with other parties to conduct business in China and elsewhere in
Asia. These investments may include manufacturing operations, technical centers, and research and development activities, to support anticipated growth in the
region. If the Company is not able to strengthen existing relationships, secure additional customers, and develop market-relevant electrification, advanced
driver assistance, and semi-autonomous and autonomous vehicle technologies, it may fail to realize expected rates of return on these investments.
In addition, failure of the Company’s joint venture partners to comply with contractual commitments or to exert influence or pressure in China may impact the
Company’s operations, financial condition and cash flow. The Company cannot predict the outcome of future interactions and it is possible that any future
disputes and/or changes to the contractual obligations with the joint venture partner could have a material impact on the Company’s business, operating results,
financial condition, and cash flow.
The Company’s ability to effectively operate could be hindered if it fails to attract and retain key personnel
The Company’s ability to operate its business and implement its strategies effectively depends, in part, on the efforts of its executive officers and other key
employees. In addition, the Company’s future success will depend on, among other factors, the ability to attract and retain qualified personnel, particularly
engineers and other employees with critical expertise and skills that support key customers and products or in emerging regions. The loss of the services of any
key employees, and particularly the Company’s Chief Executive Officer, or the failure to attract or retain other qualified personnel could have a material
adverse effect on the Company’s business, ability to secure future programs, operating results, financial condition, and cash flow.
Work stoppages and similar events could significantly disrupt the Company’s business
Because the automotive industry relies heavily on just-in-time delivery of components during the assembly and manufacture of vehicles, a work stoppage at
one or more of the Company’s manufacturing and assembly facilities could have material adverse effects on the business. Similarly, if one or more of the
Company’s customers were to experience a work stoppage, that customer would likely halt or limit purchases of the Company’s products, which could result in
the shutdown of the related manufacturing facilities. A significant disruption in the supply of a key component due to a work stoppage at any of the Company’s
suppliers or sub-suppliers, or reduced orders from the Company’s customers as a result of work stoppages, could have a material adverse effect on the
Company’s business, operating results, financial condition, and cash flow.
Industry and Competition Related Risk Factors
The Company may not realize sales represented by awarded business
10
The Company estimates awarded business using certain assumptions, including projected future sales volumes based on data from OEM customers and
industry benchmarks. The OEM customers do not generally guarantee production volumes. In addition, awarded business may include business under
arrangements that OEM customers have the right to terminate, at any time, without penalty. Therefore, the Company’s actual sales volumes, and thus the
ultimate amount of revenue that it derives from such sales, are not guaranteed. If actual production orders from its customers are not consistent with the
projections used by the Company in calculating the amount of its awarded business, the Company could realize substantially less revenue over the life of these
projects than the projected estimate.
The Company must continue to develop, introduce, and achieve market acceptance of new and enhanced products in order to grow its sales in the future
The growth of the Company's business will be dependent on the demand for innovative automotive electronics products, including but not limited to
electrification, advanced driver assistance, semi-autonomous and autonomous vehicle technologies. In order to increase sales in current markets and gain entry
into new markets, the Company must innovate to maintain and improve existing products, including software, while successfully developing and introducing
distinctive new and enhanced products that anticipate changing customer and consumer preferences and capitalize upon emerging software technologies.
Artificial Intelligence (“A.I”) will continue to play an increasing role in the Company’s products generating opportunities but also risk that the Company’s
products may be developed more cheaply with A.I. solutions or that competitor’s A.I. offerings may be preferred over the Company’s product offerings. In
addition, the Company may experience difficulties that delay or prevent the development, introduction, or market acceptance of its new or enhanced products.
Furthermore, the new technologies, including A.I., have also attracted increased competition from outside the traditional automotive industry, and any of these
competitors may develop and introduce technologies that gain greater customer or consumer acceptance, which could have a material adverse effect on the
future growth of the Company.
The automotive industry is cyclical and significant declines in the production levels of the Company’s major customers could reduce the Company’s sales and
harm its profitability
Demand for the Company’s products is directly related to the automotive vehicle production of the Company’s major customers. Automotive sales and
production are cyclical and can be affected by general economic or industry conditions, labor relations issues, fuel prices, regulatory requirements, government
initiatives, trade agreements, the cost and availability of credit, and other factors. Due to overall global economic conditions, including semiconductor
shortages and supply chain disruptions, the automotive industry experienced constrained production schedules in recent years. Such shortages and constrained
production schedules had and may in the future have a material adverse effect on the Company’s business, profitability, financial condition and results of
operations.
The discontinuation or loss of business, or lack of commercial success, with respect to a particular product for which the Company is a significant supplier
could reduce the Company’s sales and harm its profitability
Although the Company has purchase orders from many of its customers, these purchase orders generally provide for the supply of a customer’s annual
requirements for a particular vehicle model and assembly plant, or in some cases, for the supply of a customer’s requirements for the life of a particular vehicle
model, rather than for the purchase of a specific quantity of products. In addition, certain customers have communicated an intent to manufacture components
internally that are currently produced by outside suppliers, such as the Company. If the Company's OEM customers successfully insource products currently
manufactured by the Company the discontinuation or loss of business for products which the Company is a significant supplier could reduce the Company’s
sales and harm the Company’s profitability.
Price pressures from customers may adversely affect the Company’s business
Downward pricing pressures by automotive OEMs, while characteristic of the automotive industry, are increasing. Virtually all automakers have implemented
aggressive price-reduction initiatives and objectives each year with their suppliers, and such actions are expected to continue in the future. In addition,
estimating such amounts is subject to risk and uncertainties because any price reductions are a result of negotiations and other factors. Accordingly, suppliers
must be able to reduce their operating costs in order to maintain profitability. Price reductions have impacted the Company’s sales and profit margins and are
expected to continue to do so in the future. If the Company is unable to offset customer price reductions in the future through improved operating efficiencies,
new manufacturing processes, sourcing alternatives, and other cost-reduction initiatives, the Company’s business, operating results, financial condition, and
cash flow could be adversely affected.
The Company is highly dependent on Ford Motor Company and decreases in this customer’s vehicle production volumes would adversely affect the Company
11
Ford and General Motors are the Company’s largest customers as a percentage of sales. Accordingly, any change in Ford or General Motors's vehicle
production volumes may have a significant impact on the Company’s sales volume and profitability. See Note 18, "Financial Instruments" in Part II, Item 8 of
this Annual Report on Form 10-K for more information.
The Company’s pension expense and funding levels of pension plans could materially deteriorate, or the Company may be unable to generate sufficient excess
cash flow to meet increased pension benefit obligations
The Company’s assumptions used to calculate pension obligations as of the annual measurement date directly impact the expense to be recognized in future
periods. While the Company’s management believes that these assumptions are appropriate, significant differences in actual experience or significant changes
in these assumptions may materially affect the Company’s pension obligations and future expense. For more information on sensitivities to changing
assumptions, please see “Critical Accounting Estimates” in Item 7 and Note 12, “Employee Benefit Plans” in Part II, Item 8 of this Annual Report on Form 10-
K.
Product Related Risk Factors
The Company's inability to effectively manage the timing, quality, and costs of new program launches could adversely affect its financial performance
In connection with the award of new business, the Company often obligates itself to deliver new products and services that are subject to its customers’ timing,
performance, and quality standards. Additionally, as a Tier 1 supplier, the Company must effectively coordinate the activities of numerous suppliers in order to
launch programs successfully. Given the complexity of new program launches, especially involving new and innovative technologies, the Company may
experience difficulties managing timeliness and detecting undiscovered software errors, bugs, and other defects in its products which may injure the Company's
reputation. In addition, new program launches require a significant ramp up of costs; however, the sales related to these new programs generally are dependent
upon the timing and success of the introduction of new vehicles by the Company's customers. The Company's inability to effectively manage the timing,
quality, and costs of these new program launches could have a material adverse effect on its business, operating results, financial condition, and cash flow.
Warranty claims, product liability claims, and product recalls could adversely affect the Company
The Company faces the inherent business risk of exposure to warranty and product liability claims in the event that its products fail to perform as expected or
such failure results, or is alleged to result, in bodily injury or property damage (or both). In addition, if any of the Company’s supplied products are defective or
are alleged to be defective, the Company may be required to participate in a recall campaign. The introduction of new and complex technologies, such as A.I.
features, can increase these and other safety risks, including exposing users to harmful, inaccurate or other negative content and experiences. The Company’s
products contain increasingly significant amounts of software and a successful cyberattack on such products could cause materially adverse effects on the
Company’s business, operating results, financial condition, cash flow, and reputation. In addition, as the Company expands its electrification product offering,
including its battery management systems, such products will present a different warranty and product liability risk profile. As suppliers become more
integrally involved in the vehicle design process and assume more of the vehicle assembly functions, automakers are increasingly expecting them to warrant
their products and are increasingly looking to suppliers for contributions when faced with product liability claims or recalls. A successful warranty or product
liability claim against the Company, or a requirement that the Company participate in a product recall campaign, could have materially adverse effects on the
Company’s business, operating results, financial condition, and cash flow.
Developments or assertions by or against the Company relating to intellectual property rights could materially impact its business
The Company owns significant intellectual property, including a number of patents, trademarks, copyrights, and trade secrets and is involved in numerous
licensing arrangements. The Company’s intellectual property plays an important role in maintaining its competitive position in a number of the markets served.
The Company may directly or through a supplied component utilize intellectual property in its products that requires a license from a third-party. While the
Company believes that such licenses generally can be obtained by the Company, or supplier if a supplied component, we may not be able to obtain the
necessary licenses on commercially acceptable terms or at all. Failure by the Company or its suppliers to obtain the right to use third-party intellectual property
could preclude the Company from selling certain products, and developments or assertions by or against the Company relating to intellectual property rights,
could have materially adverse effects on the Company’s business, operating results, financial condition, and cash flow.
12
The Company also derives significant revenue from countries outside the U.S. (including China) and significant intellectual property assets are licensed to joint
ventures and customers in foreign jurisdictions. If a material intellectual property theft or forced transfer were to occur, it could materially and adversely affect
the Company’s business, operating results, financial condition, and cash flow. In addition, the Company has continued to see an increase in patent claims
related to connectivity-enabled products where other patent-holding companies are seeking royalties and often enter into litigation based on patent infringement
allegations. Significant technological developments by others also could materially and adversely affect the Company’s business, operating results, financial
condition, and cash flow.
Advances in A.I. technology may generate developments against which existing intellectual property laws may not adequately protect and which may also give
rise to a proliferation of infringement which we may not be able to address effectively.
Privacy and security concerns (including cybersecurity) relating to the Company's current or future products and services could have a material adverse
impact on our business, damage its reputation and deter current and potential users from using them
The Company’s products and services contain digital technology designed to support connected vehicles, and for some products may also collect and store
sensitive end-user data (that may include personally identifiable information). Despite the security and risk-prevention measures the Company has
implemented, including related to cybersecurity, our products or services could be breached, damaged, taken over, or otherwise interrupted by a system failure,
cyberattack, malicious computer software (including malware or ransomware), unauthorized physical or electronic access, or other natural or man-made
incidents or disasters. Failure of the Company’s products or services to effectively protect against these vulnerabilities can damage its reputation and adversely
affect its operating results.
Further, through our products or services, the Company may gain access to sensitive, confidential, or personal data or information that is subject to privacy and
security laws, regulations, and customer-imposed controls. Concerns about the Company's practices with regard to the collection, use, disclosure, or security of
personal information or other privacy related matters, even if unfounded, could damage its reputation and adversely affect its operating results.
Regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning cybersecurity and data protection. In
addition, the interpretation and application of consumer and data protection laws in the U.S., Europe, and elsewhere are often uncertain and in flux. Complying
with these various laws could cause the Company to incur substantial costs.
Tax Related Risk Factors
The Company’s expected annual effective tax rate could be volatile and could materially change as a result of changes in mix of earnings and other factors,
including changes in tax laws and tax audits
We are subject to income taxes in the U.S. and various international jurisdictions. Changes in tax rates or tax laws by U.S. and international jurisdictions and
tax audits could adversely impact Visteon’s financial results. The Company is in a position whereby losses incurred in certain tax jurisdictions generally
provide no current financial statement benefit. In addition, certain jurisdictions have statutory rates greater than or less than the U.S. statutory rate. As such,
changes in the mix and source of earnings between jurisdictions, including changes in tax rates in those jurisdictions, could have a significant impact on the
Company’s overall effective tax rate in future periods. Additionally, in the ordinary course of business, we are subject to examinations by various tax
authorities. Tax authorities in various jurisdictions could also open new examinations and expand existing examinations for which the outcomes cannot be
predicted with certainty. Furthermore, changes in U.S. or foreign tax laws and regulations, or their interpretation and application, could also have a significant
impact on the Company’s overall effective rate in future periods. For example, the Organization for Economic Cooperation and Development ("OECD"), the
European Union, and several other countries, including those where our Company operates, have introduced a 15% global minimum tax on a country-by-
country basis, with many jurisdictions committing to an effective enactment date of January 1, 2024. Although it is uncertain if the U.S. will adopt Pillar Two,
many jurisdictions are updating their tax laws based on this framework. As we evaluate the impact of these legislative changes with the release of additional
guidance, uncertainty remains about the timing and interpretation by tax authorities in affected regions. While the estimated impact on our 2024 effective tax
rate is not material, these changes could negatively affect our effective tax rate, tax liabilities, and cash taxes in future years.
The Company may not be able to fully utilize its U.S. net operating losses and other tax attributes
The Company has net operating losses ("NOLs") and other tax attributes which could be limited if there is a subsequent change of ownership. If the Company
were to have a change of ownership within the meaning of IRC Sections 382 and 383, its NOLs
13
and other tax attributes could be limited to an amount equal to its market capitalization at the time of the ownership change multiplied by the federal long-term
tax exempt-rate. The Company cannot provide any assurance that such an ownership change will not occur, in which case the availability of the Company's
NOLs and other tax attributes could be significantly limited or possibly eliminated. Certain tax benefit preservation provisions of its corporate documents could
delay or prevent a change of control, even if that change would be beneficial to stockholders.
Market Related Risk Factors
The Company is subject to significant foreign currency risks and foreign exchange exposure
As a result of Visteon's global presence, a significant portion of the Company's revenues and expenses are denominated in currencies other than the U.S. dollar.
The Company is therefore subject to foreign currency risks and foreign exchange exposure. The Company's primary exposures are to the Brazilian real, British
pound, Bulgarian Lev, Chinese renminbi, euro, Indian rupee, Japanese yen, Korean won, Mexican peso, and Thai bhat. Volatility in certain exchange rates
could adversely impact Visteon's financial results and comparability of results from period to period.
General Risk Factors
A disruption to the Company's infrastructure of information technology systems, or those of our customers, supplies, sub-suppliers, partners, service providers
or other contract parties, including because of cyberattack, could adversely affect its business and financial performance
The Company relies on the accuracy, capacity, and security of its infrastructure and information technology systems to conduct its business. The Company's
systems have in the past and could in the future be breached, damaged, taken over, or otherwise interrupted by a system failure, cyberattack, malicious
computer software (including malware or ransomware), unauthorized physical or electronic access, or other natural or man-made incidents or disasters. For
example, on July 3, 2023, the Company experienced a disruption of certain IT services and assets at its third-party data center provider that resulted in some IT
services experiencing interruptions and loss of data and on December 15, 2024 several servers at a single plant in China were encrypted but the Company’s
response plans including back-up restoration negated any material impact to the Company. These types of events have occurred with more frequency within our
industry and are expected to continue (and possibly increase) moving forward. Any of these events could result in, amongst other things, the following to the
Company or its customers, suppliers, sub-suppliers, or other contract parties: (i) a business disruption, including plant operations, (ii) theft of intellectual
property, including trade secrets, or (iii) unauthorized access to personal information, including employee or end consumer personal information. Although the
Company has placed a high priority on cybersecurity and continues to enhance (through investments) our controls, processes and practices designed to protect
our operational systems and products from a breach, the Company’s actions may not be quick enough to fully protect our operational systems and products
against all vulnerabilities, including technologies developed to bypass our security measures. In addition, the company’s employees or customers may
accidentally provide their access credentials or other sensitive information to bad actors who could gain access to our secure systems and networks. Nothing
ensures that the Company’s actions or investments to improve its systems, products, processes and risk management framework or remediate vulnerabilities
will be sufficient or deployed quickly enough to prevent or limit the impact of any breach. Undetected or unrecognized breaches also create a risk to the
Company since it takes time to first discover the breach and then patch the vulnerability. The Company also cannot anticipate all the various methods of attacks
and have defenses prepared in advance against these types of attacks, and it cannot predict the extent, frequency or impact these attacks may have. To the extent
a breach occurs as noted above, or data is lost, destroyed, or inappropriately used or disclosed, such disruptions could lead to legal claims against the Company
and adversely affect the Company’s competitive position, reputation, relationships with customers, financial condition, operating results, and cash flows and/or
subject us to regulatory actions, including those contemplated by data privacy laws and regulations. Moreover, the Company may be required to incur
significant costs to protect against the damage caused by these disruptions or security breaches in the future. The Company is also dependent on the security
measures implemented by our customers, suppliers, and other third-party service providers to protect their own systems, infrastructures, and products. A breach
that impacts any of these third-parties' systems could result in unauthorized access to the Company’s or its customers' or suppliers' sensitive data or the
Company’s own information technology systems. It could also cause the Company to be non-compliant with applicable laws, subject us to legal claims, disrupt
our operations, damage our reputation, or cause a loss of confidence in our products or services, any of which could adversely affect our financial condition,
operating results, or cash flow. In addition, if the content, analyses, or recommendations that A.I. programs assist in producing are or are alleged to be deficient,
inaccurate, or biased, then the Company’s business, financial condition, and results of operations and our reputation may be adversely affected.
The Company is involved from time to time in legal proceedings and commercial or contractual disputes, which could have an adverse effect on the Company
14
The Company is involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant. These are typically claims that
arise in the normal course of business including, without limitation, commercial or contractual disputes (including disputes with suppliers), intellectual property
matters, personal injury claims, and employment matters. Adverse results of such proceedings and claims may have a material adverse impact on the
Company’s profitability and financial position.
Climate change, climate change regulations, and greenhouse gas effects could adversely impact the Company’s operations and markets
Increased attention to climate change and its association with greenhouse gas emissions, expectations for companies to establish short and long-term emissions
reduction targets, and changes in consumer preferences may result in increased costs, reduced profits, risks associated with new regulatory requirements, and
the potential for increased litigation and governmental investigations. The U.S. federal government, certain U.S. states, and certain other countries and regions
have adopted or are considering legislation or regulation imposing overall caps or taxes on greenhouse gas emissions from certain sectors including
automotive. Failure to comply with any legislation or regulation could result in substantial fines, criminal sanctions, or operational changes. Moreover, even
without such legislation or regulation, increased awareness of, or any adverse publicity regarding, the effects of greenhouse gases could harm the Company’s
reputation or reduce customer demand for its products and services. Automakers have also started implementing climate-related initiatives and objectives each
year with their suppliers, and such actions are expected to continue in the future. If the Company is unable to meet these new requirements in the future through
improved operating efficiencies, new manufacturing processes, sourcing alternatives, and other sustainability initiatives, the Company’s business could be
adversely affected.
Additionally, as severe weather events become increasingly common, operations of the Company, its customers, and/or suppliers may be disrupted, which
could result in increased operational costs or reduced demand for products and services. Natural disasters could cause disruption to the Company’s ability to
serve its customers and communities in times of need and extended periods of disruption could have an adverse effect on its results of operations.
Item 1B. Unresolved Staff Comments
None
Item 1C. Cybersecurity
Governance
Responsibility for assessing cybersecurity risk includes, but is not limited to, input from our Board of Directors, including the Audit Committee of the Board
(the “Audit Committee”), senior management and the Crisis Management Team (a taskforce comprised of representatives from primary corporate and
operational functions). These groups devote significant resources to cybersecurity and the risk management processes to adapt to the changing cybersecurity
landscape and respond to emerging threats in a timely and effective manner. Visteon’s internal cyber and information security team oversees and works
collaboratively with various information security service providers using the National Institute of Standards and Technology ("NIST") framework to regularly
assess the threat landscape and support a layered cybersecurity strategy based on prevention, detection and mitigation.
The Company’s Chief Information Officer is responsible for developing and implementing our information security program and reporting on cybersecurity
matters to the Audit Committee and to the full Board. Our Chief Information Officer has over two decades of experience leading cybersecurity oversight.
Visteon’s internal cyber and information security team has multiple years of experience and/or are security certified (e.g., CISSP, CRISC).
Risk Management, Strategy and Testing
The Audit Committee and the full Board actively participate in discussions with management and amongst themselves regarding cybersecurity risks. The Audit
Committee is updated quarterly on the Company’s cybersecurity status including discussion of management’s actions to identify and detect threats, as well as
planned actions in the event of a response or recovery situation. The Audit Committee’s review also includes review of recent enhancements to the Company’s
defenses and management’s progress on its cybersecurity strategic roadmap. In addition, at least two times per year, the full Board reviews key performance
indicators, test results and related remediation, and recent threats and how the Company is managing those threats.
15
The Company’s cybersecurity risk management program incorporates external guidance and expertise through the use of third-party service providers to assist
in the identification, assessment and management of risks specific to cybersecurity threats, including vendors providing threat intelligence, risk mitigation, dark
web monitoring, external scanning and scoring, threat and reputation monitoring, forensics, cyber-insurance, advisory services and legal counsel. Visteon
engages a managed security service provider to augment its cyber and information security team and to provide additional monitoring capabilities. Visteon’s
cyber and information security team reviews enterprise risk management-level cybersecurity risks regularly, and key cybersecurity risks are incorporated into
the annual corporate-wide Enterprise Risk Management assessment. In addition, we have a set of Company-wide policies and procedures concerning
cybersecurity matters, which include an Information Security manual as well as other policies that directly or indirectly relate to cybersecurity, such as policies
related to encryption standards, antivirus protection, remote access, access control, confidential information and the use of the internet, social media, email and
wireless devices. The Company has also obtained Trusted Information Security Assessment Exchange (TISAX) certification labels at multiple global locations.
The Company periodically performs simulations and tabletop exercises at a management level and incorporates external resources and advisors as needed. All
employees are required to periodically complete cybersecurity training and have access to more frequent cybersecurity training through online modules.
The company regularly tests defenses by performing simulations and drills at both a technical level (including through red team/blue team exercises) and by
reviewing its operational policies and procedures with third-party experts. At the management level, our cyber and information security team regularly
monitors alerts and meets to discuss threat levels, trends and remediation. Our cyber and information security team conducts regular reviews of third-party
hosted applications with a specific focus on any sensitive data shared with third parties. Internal audit works with internal business owners of the hosted
applications to document user access reviews annually and receive from the vendor a System and Organization Controls (“SOC”) report. If a third-party vendor
is not able to provide a SOC report, the Company takes additional steps to assess their cybersecurity preparedness and assess our relationship on that basis.
The Company has certain products it manufactures that are more susceptible to cybersecurity threats and for those products the Company has additional
specific cybersecurity risk assessments and management processes in place that aligns our internal policies, standards and development practices with customer
requirements and industry standards, including the International Organization for Standardization ("ISO") 21434 control framework specific to road vehicle
cybersecurity engineering. Visteon’s product level cybersecurity management is led by a separate team within the engineering department with the leader of
that team reporting at least twice per year to the Technology Committee of the Board on the risks and processes related to product level cybersecurity threats.
Visteon faces a number of cybersecurity risks in connection with its business. Although such risks have not, to date, materially affected the Company or the
results of operations or financial condition, the Company has from time-to-time experienced threats to and breaches of its data and systems, including malware
attacks. Despite the extensive approach Visteon takes to cybersecurity, the Company may not be successful in preventing or mitigating a cybersecurity incident
that could have a material adverse effect on the Company or its stakeholders. See Item 1A. “Risk Factors” for a discussion of cybersecurity risks.
Item 2. Properties
The Company's principal executive offices are located in Van Buren Township, Michigan. At December 31, 2024, the Company and its consolidated
subsidiaries owned or leased:
•
32 corporate offices, technical and engineering centers and customer service centers in 15 countries around the world, all of which were leased.
•
13 manufacturing and/or assembly facilities in Brazil, China, India, Japan, Mexico, Portugal, Slovakia, Tunisia, and Thailand, of which 10 were leased
and 3 were owned.
In addition, the Company's non-consolidated affiliates operate 6 manufacturing and/or assembly locations, primarily in the Asia Pacific region. The Company
considers its facilities to be adequate for its current uses.
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Item 3. Legal Proceedings
From time to time, the Company is involved in various legal matters and proceedings arising in the ordinary course of business. While the Company incurs
costs, including but not limited to, attorneys’ fees, the Company does not currently expect any of these matters or proceedings to have a material effect on its
results of operations, financial position or cash flows. Certain legal proceedings in which the Company is involved are discussed in Note 19, “Commitments
and Contingencies” to the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, “Financial Statements
and Supplementary Data” and should be considered an integral part of Part I, Item 3, “Legal Proceedings.”
Item 4. Mine Safety Disclosures
None
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Item 4A. Information about Our Executive Officers
The following table shows information about the executive officers of the Company as of February 1, 2025:
Name
Age
Position
Sachin S. Lawande
57
Director, President and Chief Executive Officer
Jerome J. Rouquet
57
Senior Vice President and Chief Financial Officer
Colleen E. Myers
49
Vice President and Chief Accounting Officer
Brett D. Pynnonen
56
Senior Vice President and Chief Legal Officer
Joao Paulo Ribeiro
55
Senior Vice President, Operation, Supply Chain, and Procurement
Qais M. Sharif
62
Senior Vice President, and General Manager of the Americas
Kristin E. Trecker
59
Senior Vice President and Chief People Officer
Robert R. Vallance
64
Senior Vice President, Product Lines, China, and APAC Supplier Strategy
Sachin S. Lawande has been Visteon’s Chief Executive Officer, President, and a director of the Company since June 29, 2015. Before joining Visteon,
Mr. Lawande served as Executive Vice President and President, Infotainment Division of Harman International Industries, Inc., an automotive supplier, from
July 2013 to June 2015. From July 2011 to June 2013, he served as Executive Vice President and President of Harman’s Lifestyle Division, and from July 2010
to June 2011 as Executive Vice President and Co-President, Automotive Division. Prior to that he served as Harman’s Executive Vice President and Chief
Technology Officer since February 2009. Mr. Lawande joined Harman International in 2006, following senior roles at QNX Software Systems and 3Com
Corporation. He also serves on the board of directors of Cognex Corporation, a leading worldwide provider of machine vision products that are widely used in
automotive, consumer electronics, life sciences, and logistics industries. Within the last five years, he also served on the board of directors of DXC Technology
Company.
Jerome J. Rouquet has been Visteon’s Senior Vice President and Chief Financial Officer since February 2020 (after joining the Company as Senior Vice
President, Finance in January 2020). Prior to that, he held leadership roles of increasing responsibility at Federal-Mogul, LLC (a global automotive supplier),
including Senior Vice President and Chief Financial Officer from January 2016 to September 2018, Chief Accounting Officer and Controller from July 2010 to
January 2016, and Finance Director from March 1999 to July 2010. Following the acquisition of Federal-Mogul by Tenneco, Inc., he most recently served as
Senior Vice President Finance, Motorparts from October 2018 to December 2019. From 1990 to 1996, Mr. Rouquet served in various roles at Imaje SA, from
Logistics Manager to Financial Controller.
Colleen E. Myers has been Visteon’s Vice President and Chief Accounting Officer since January 2024. Prior to the appointment, she was Assistant Controller
since May 2021 and Senior Manager, Reporting and Consolidations since joining the Company in June 2015. Prior to joining Visteon she worked at Masco
Corporation holding supervisory positions of increasing responsibility in financial reporting and internal audit. Ms. Myers is a certified public accountant.
Brett D. Pynnonen has been Visteon’s Senior Vice President and Chief Legal Officer since December 2016. Prior to that, he was Vice President and General
Counsel since joining the Company in March 2016. Before joining Visteon, he was Senior Vice President, General Counsel and Corporate Secretary of Federal-
Mogul Holdings Corporation, a global automotive supplier, from November 2007 to March 2016. Prior to that, he was General Counsel and Secretary of
Covansys Corporation, a technology services company, and an attorney at the law firm of Butzel Long.
Joao Paulo Ribeiro has been Visteon’s Senior Vice President, Operation, Supply Chain, and Procurement since November 2021. Prior to that he was Vice
President, Manufacturing and Supply Chain since March 2020, Vice President, Manufacturing Operations since March 2014, and Managing Director, European
Operations from October 2010 to March 2014. During his career with Visteon and Ford Motor Company, he has held management positions of increasing
responsibility in manufacturing and operations.
Qais Sharif has been Visteon’s Senior Vice President and General Manager of the Americas since November 2023. Prior to that he was, Vice President and
General Manager of the Americas since December 2021, Vice President Displays Product Line since November 2019 and Vice President, Product Management
Driver Information and Displays since joining the Company in August 2016. Prior to joining Visteon, Mr. Sharif was Vice President, Information Technology
and Mobile USA Sales and Marketing at LG Display Company, an automotive supplier, and Global Vice President of Sales at TE Connectivity, a consumer
electronics company.
18
Kristin E. Trecker has been Visteon’s Senior Vice President and Chief People Officer since joining the Company in May 2018. Before joining Visteon, she
served as Executive Vice President and Chief Human Resources Officer (“CHRO”) for Integer Holdings Corp. (formerly Greatbatch, Inc.), a medical device
contract development and manufacturer, from November 2015 to May 2017, and as Senior Vice President and CHRO of MTS Systems Corp., a global
engineering firm, from February 2012 to October 2015. Prior to that Ms. Trecker spent 16 years with Lawson Software, Inc. in roles of increasing
responsibility, ranging from Director of Compensation and Benefits to Senior Vice President of Human Resources.
Robert R. Vallance has been Visteon’s Senior Vice President, Product Lines, China and APAC Supplier Strategy since January 2025, prior to that he was Senior
Vice President of Global Customer Business Groups, New Technology Product Lines, and General Manager APAC Region since January 2022 and Senior Vice
President, Customer Business Groups since December 2016. He also served as Vice President, Customer Business Groups upon rejoining the Company in July
2014. From February 2008 to June 2014, he served as Vice President, Electronics Business Group of Johnson Controls, Inc., an automotive supplier. Prior to
that, he spent 23 years at Ford Motor Company and Visteon in product development, program and commercial management, strategy and planning, product
marketing, and manufacturing.
19
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The Company's common stock, $0.01 par value per share, trades on the Nasdaq Global Select Market under the symbol "VC". As of February 7, 2025, the
Company had 2,550 shareholders of record.
No dividends were paid by the Company on its common stock during the years ended December 31, 2024 and 2023. The Company’s Board evaluates the
Company’s dividend policy based on all relevant factors. The Company’s credit agreements limit the amount of cash payments for dividends that may be made.
Additionally, the ability of the Company’s subsidiaries to transfer dividends is subject to various restrictions, including regulatory requirements and
governmental restraints.
No sales of the Company’s common stock were made by or on behalf of the Company or an affiliated purchaser during the fourth quarter of 2024.
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.
Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. As of
December 31, 2024, the Company has $131 million of authorized purchases of common stock remaining.
The following table summarizes information relating to purchases made by or on behalf of the Company, or an affiliated purchaser, of shares of the Company’s
common stock during the fourth quarter of 2024.
Period
Total Number of
Shares (or Units)
Purchased (1)
Average Price Paid
per Share (or Unit)
Total Number of
Shares (or units)
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Approximate Dollar
Value of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs (in
millions)
October 1 to October 31, 2024
—
$
—
—
$
174
November 1 to November 31, 2024
21,604
$
92.74
21,604
$
172
December 1 to December 31, 2024
455,601
$
91.00
455,601
$
131
Total
477,205
$
91.08
477,205
$
131
(1) The Company does not include shares surrendered to pay taxes incurred upon exercises of stock options for purposes of this Item 5 of Part II of this Annual
Report on Form 10-K.
(2) The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain
stock repurchases made after December 31, 2022. All dollar amounts presented exclude such excise taxes, as applicable.
The following information in Item 5 is not deemed to be “soliciting material” or be “filed” with the SEC or subject to Regulation 14A or 14C under the
Securities Exchange Act of 1934, as amended (“Exchange Act”) or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Company specifically incorporates it by
reference into such a filing.
20
Performance Graph
The following graph compares the cumulative total stockholder return from December 31, 2019 through December 31, 2024, for Visteon's existing common
stock, the S&P 500 Index and the Dow Jones U.S. Auto Parts Index. The graph below assumes that $100 was invested on December 31, 2019 in each of the
Company's common stock, the stocks comprising the S&P 500 Index and the stocks comprising the Dow Jones U.S. Auto Parts Index, and that all dividends
have been reinvested.
December 31, 2019
December 31, 2020
December 31, 2021
December 31, 2022
December 31, 2023
December 31, 2024
Visteon Corporation
$100.00
$144.96
$128.35
$151.09
$144.24
$102.46
Dow Jones U.S. Auto Parts
Index
$100.00
$116.02
$139.01
$101.74
$99.55
$75.85
S&P 500
$100.00
$116.26
$147.52
$118.84
$147.64
$182.05
The above comparisons are required by the SEC and are not intended to forecast or be indicative of possible future performance of the Company's common
stock or the referenced indices.
Item 6. [Reserved]
21
Item 7. 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
the Company. MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s consolidated financial statements and related
notes appearing in Item 8 of this Annual Report on Form 10-K “Financial Statements and Supplementary Data”. For discussion related to changes in financial
condition and the results of operations for fiscal year 2023-related items, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations in the Company's Annual Report on Form 10-K for fiscal year 2023, which was filed with the Securities and Exchange Commission
on February 20, 2024.
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
its 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 digital cockpit and electrification electronics 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.
•
Balanced Capital Allocation with a Strong Balance Sheet - The Company continues to maintain a strong balance sheet to withstand near-term industry
volatility and support a balanced capital allocation framework. The Company is primarily focused on allocating capital to high-returning organic initiatives
that increase internal capabilities, pursuing attractive inorganic opportunities, and returning capital to shareholders. In March 2023, the Company
announced a $300 million share repurchase program maturing at the end of 2026. The Company has repurchased $169 million of Company common stock
under this program. During the year ended December 31, 2024, Visteon spent a net cash outlay of $55 million on inorganic growth, to acquire an advanced
design and R&D services firm and a software firm.
22
Financial Results
The pie charts below highlight the sales breakdown for Visteon for the year ended December 31, 2024.
*Regional sales are based on the geographic region where sale originates and not where customer is located (excludes inter-regional eliminations).
Global Automotive Market Conditions and Production Levels
Industry vehicle volumes were approximately 89 million units in 2024, a modest decline compared to 2023 as the worldwide semiconductor and other supply
related shortages began to ease, offset by mixed industry dynamics that reduced light vehicle production in Europe and North America. North America
production levels were slightly lower as vehicle affordability affected consumer demand, partially offset by OEMs rebuilding inventories. Production levels in
Europe were lower, with a weak macroeconomic environment and the expiration of government incentives on electric vehicles weighing on production. In
China, domestic OEMs continued to gain market share amid intense price competition in a weak domestic market. Looking forward, vehicle production is
expected to decline slightly in 2025, with Visteon’s customer production expected to decline mid-single digits, and ongoing risks related to vehicle
affordability, economic uncertainty, potential geopolitical challenges, and customer market share changes. The magnitude of the impact on the financial
statements, results of operations, and cash flows will be dependent on plant production schedules, supply chain impacts, global economic impacts, and electric
vehicle adoption.
Company Highlights
Visteon continued to focus on execution throughout 2024, building a foundation of sustainable growth, margin expansion, and cash flow generation. Visteon
reported sales of $3,866 million, a year-over-year decrease of 2%, representing continued out-performance compared to customer production despite significant
headwinds in the China market and lower supply chain recoveries from customers. Net Income attributable to Visteon of $274 million declined compared to the
prior year primarily due to a larger deferred tax valuation allowance release in 2023 as compared to 2024. Adjusted EBITDA* was $474 million, a 9% increase
compared to prior year due to strong commercial and cost discipline. Visteon continued to build the foundation for sustainable growth launching 95 new
products during 2024. Visteon's next-generation products continue to be featured on its customer's key vehicles and platforms. Additionally, Visteon was
awarded $6.1 billion in new business wins with strong representation in all product categories. Wins included clusters wins of approximately $1.1 billion,
driven primarily by digital clusters, multiple SmartCore™ and infotainment wins with lifetime revenue in excess of $1.5 billion, multiple large multi-display
wins bringing total displays wins to $2.6 billion for the year, and $0.7 billion of electrification wins highlighted by a power electronics win for an on-board
charger and DC-DC converter.
* Adjusted EBITDA is a Non-GAAP financial measure, as defined below.
23
Results of Operations
Year ended December 31, 2024 Compared to Year ended December 31, 2023
The Company's consolidated results of operations for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
(In millions)
2024
2023
Change
Net sales
$
3,866
$
3,954
$
(88)
Cost of sales
(3,335)
(3,467)
132
Gross margin
531
487
44
Selling, general and administrative expenses
(207)
(207)
—
Restructuring and impairment
(32)
(5)
(27)
Interest income (expense), net
2
(7)
9
Equity in net (loss) income of non-consolidated affiliates
(3)
(10)
7
Other income (expense), net
7
(1)
8
Income (loss) before income taxes
298
257
41
Benefit from (provision for) income taxes
(14)
248
(262)
Net income (loss)
284
505
(221)
Less: Net (income) loss attributable to non-controlling interests
(10)
(19)
9
Net income (loss) attributable to Visteon Corporation
$
274
$
486
$
(212)
Adjusted EBITDA
$
474
$
434
$
40
In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $49 million non-cash tax benefit to Net income attributable to
Visteon Corporation or $1.76 per diluted share. 2023 includes a non-cash tax benefit to Net income attributable to Visteon Corporation of $313 million, or $11.10 per diluted share in the fourth
quarter, and $10.98 per diluted share for the full year, related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Net Sales and Cost of Sales
(In millions)
Net Sales
Cost of Sales
Gross Margin
December 31, 2023
$
3,954
$
(3,467)
$
487
Volume, mix, and net new business
125
(104)
21
Customer pricing, net
(142)
—
(142)
Currency
(30)
17
(13)
Engineering costs, net
—
16
16
Cost performance, design changes, and other
(41)
203
162
December 31, 2024
$
3,866
$
(3,335)
$
531
Net sales for the year ended December 31, 2024 totaled $3,866 million, which represents an decrease of $88 million compared with 2023. Volumes and net new
business increased net sales by $125 million due to continued market outperformance as a result of recent product launches and sales volumes in the America's,
partially offset by lower sales in China due to market dynamics. Customer pricing decreased net sales by $142 million as a result of lower customer recoveries
due to improving supply chain dynamics and annual price reductions. Unfavorable currency decreased net sales by $30 million, primarily attributable to the
Chinese renminbi, Japanese yen, and Brazilian real, partially offset by the euro. Other cost performance, design changes and other decreased net sales by $41
million. primarily due to the non-recurrence of certain prior period one time commercial items.
Cost of sales decreased $132 million for the year ended December 31, 2024, when compared with 2023. Volume, mix and net new business increased cost of
sales by $104 million. Net engineering costs, excluding currency, decreased cost of sales by $16 million as a result of favorable timing of engineering
recoveries. Foreign currency decreased cost of sales by $17 million, primarily attributable to the Mexican peso and Japanese yen, partially offset by the
Brazilian real. Cost performance, design
24
changes and other decreased cost of sales by $203 million primarily due to lower recoveries from improving supply chain dynamics and manufacturing
efficiencies.
A summary of net engineering costs is shown below:
Year Ended December 31,
(In millions)
2024
2023
Gross engineering costs
$
(334)
$
(330)
Engineering recoveries
143
120
Engineering costs, net
$
(191)
$
(210)
Gross engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering
costs. Gross engineering costs of $334 million for the year ended December 31, 2024, where $4 million higher than the same period of 2023, and included the
the acquisition of a German R&D services firm. Net engineering costs of $191 million for the year ended December 31, 2024, including the impacts of
currency, were $19 million lower than the same period of 2023. This decrease is primarily related to favorable timing of recoveries during 2024 compared to
the prior period.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $207 million, or 5.4% of net sales, and $207 million, or 5.2% of net sales, for the years ended December 31,
2024 and 2023, respectively. Expenses remained unchanged during 2024 due to decreased amortization expense offset by increased employee expenses.
Restructuring and Impairment
The Company recorded $32 million and $5 million of net restructuring expense for the years ended December 31, 2024 and 2023, respectively. The increase is
due to a 2024 global restructuring plan announced in September 2024 aimed at improving efficiency and further rationalize the Company’s footprint.
Interest Expense, Net
Net interest income for the year ended December 31, 2024, was $2 million, compared to interest expense of $7 million in the same period 2023. The increase in
interest income during 2024 reflects increased cash balances.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net loss of non-consolidated affiliates was $3 million and $10 million for the years ended December 31, 2024 and 2023, respectively. The loss in each
year is due to operating losses at an affiliate.
Other Income, Net
Other income, net consists of the following:
Year Ended December 31,
(In millions)
2024
2023
Pension financing benefits, net
$
11
$
11
Pension settlement
(4)
—
Township settlement
—
(12)
$
7
$
(1)
Income Taxes
The Company's provision for income taxes was $14 million for year ended December 31, 2024, reflecting a $262 million increase compared to the $248
million benefit from income taxes in 2023. In the fourth quarter of 2023, the Company released $313 million from its deferred tax valuation allowance related
to U.S. federal and certain state deferred tax assets. In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not
to be realized resulting in a $49 million non-cash tax benefit.
25
Adjusted EBITDA
The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-
cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring and
impairment expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.
Adjusted EBITDA is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the
excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities
across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be
comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under U.S. generally accepted accounting
principles ("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. The Company uses
Adjusted EBITDA as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the
Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.
The reconciliation of Adjusted EBITDA to net income attributable to Visteon for the years ended December 31, 2024 and 2023 is as follows:
Year Ended December 31,
(In millions)
2024
2023
Change
Net income (loss) attributable to Visteon Corporation
$
274
$
486
$
(212)
Depreciation and amortization
96
104
(8)
Restructuring, net
32
5
27
Provision for (benefit from) income tax
14
(248)
262
Non-cash, stock-based compensation expense
41
34
7
Interest (income) expense, net
(2)
7
(9)
Net income (loss) attributable to non-controlling interests
10
19
(9)
Equity in net loss (income) of non-consolidated affiliates
3
10
(7)
Other, net
6
17
(11)
Adjusted EBITDA
$
474
$
434
$
40
In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $49 million non-cash tax benefit to Net income attributable to
Visteon Corporation or $1.76 per diluted share. 2023 includes a non-cash tax benefit to Net income attributable to Visteon Corporation of $313 million, or $11.10 per diluted share in the fourth
quarter, and $10.98 per diluted share for the full year, related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Adjusted EBITDA was $474 million for the year ended December 31, 2024, representing an increase of $40 million when compared to 2023. Favorable
volumes and mix, and the ongoing benefits of cost and commercial discipline increased Adjusted EBITDA by $37 million. Foreign currency decreased
Adjusted EBITDA by $12 million, primarily attributable to the Brazilian real and Japanese yen, partially offset by the Mexican peso. Net engineering costs,
excluding currency, increased Adjusted EBITDA by $15 million from favorable timing of recoveries.
Liquidity
Overview
The Company's primary sources of liquidity are cash flows from operations, existing cash balances, and borrowings under available credit facilities. The
Company's intra-year needs are normally impacted by seasonal effects in the industry, such as mid-year shutdowns, the ramp-up of new model production, and
year-end shutdowns at key customers.
A substantial portion of the Company's cash flows from operations are generated by operations located outside of the U.S. Accordingly, the Company utilizes a
combination of cash repatriation strategies, including dividends and distributions, royalties, and other intercompany arrangements to provide the funds
necessary to meet obligations globally. The Company’s
26
ability to access funds from its subsidiaries is subject to, among other things, customary regulatory and statutory requirements and contractual arrangements
including joint venture agreements and local credit facilities. Moreover, repatriation efforts may be modified by the Company according to prevailing
circumstances.
Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of December 31, 2024, the Company’s
corporate credit rating is BB by Standard & Poor’s. See Note 11, "Debt" in the Company's consolidated financial statements included in Item 8 of this Annual
Report on Form 10-K for a comprehensive discussion of the Company's debt facilities. Incremental funding requirements of the Company's consolidated
foreign entities are primarily accommodated by intercompany cash pooling structures and intercompany load agreements. Affiliate working capital lines had
availability of $150 million and the Company had $400 million of available credit under the revolving credit facility as of December 31, 2024.
Cash Balances
As of December 31, 2024, the Company had total cash and equivalents of $626 million, including $3 million of restricted cash. Cash balances totaling
$489 million were located in jurisdictions outside of the United States, of which approximately $65 million is considered permanently reinvested for funding
ongoing operations outside of the U.S. If such permanently reinvested funds were repatriated to the U.S., no U.S. federal taxes would be imposed on the
distribution of such foreign earnings due to U.S. tax reform enacted in December 2017. However, the Company would be required to accrue additional tax
expense primarily related to foreign withholding taxes.
Other Items Affecting Liquidity
During the year ended December 31, 2024, cash contributions to the Company's U.S and non-U.S. employee retirement plans were approximately $26 million.
Additionally, the Company expects to make contributions to its US and non-US defined benefit pension plans of $4 million and $8 million, respectively, during
2025.
During the year ended December 31, 2024, the Company paid $10 million related to restructuring activities. Additional discussion regarding the Company's
restructuring activities is provided in Note 4, "Restructuring and Impairments" in the Company's consolidated financial statements included in Item 8 of this
Annual Report on Form 10-K.
The Company has committed to make investments totaling $20 million in multiple entities principally focused on the automotive sector pursuant to limited
partnership agreements. As of December 31, 2024, the Company has contributed $13 million toward the aggregate investment commitments. As a limited
partner in each entity, the Company will periodically make capital contributions toward this total commitment amount.
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.
Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. During the
year ended December 31, 2024, the Company has purchased 647,755 shares at an average price of $97.97 related to this program totaling $63 million.
Purchase Obligations
As of December 31, 2024, the Company has contractual purchase obligations of approximately $41 million through 2029.
Leases
The Company has operating leases primarily for corporate offices, technical and engineering centers, vehicles, and certain equipment with future lease
obligations ranging from 2025 to 2035. Additional discussion regarding the Company's leasing activities is provided in Note 9, "Leases" in the Company's
consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Taxes
The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of December 31,
2024, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $15 million. Given the
number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the period of cash settlement, if any, with the respective
taxing authorities. For further information related to the Company’s unrecognized tax benefits, see Note 14, “Income Taxes,” to the consolidated financial
statements included in this Report.
27
Cash Flows
Operating Activities
The Company generated $427 million of cash from operating activities during the year ended December 31, 2024, as compared to $267 million during 2023
representing a $160 million increase.
The increase in cash from operations in 2024 when compared to the prior period is primarily attributable to higher Adjusted EBITDA of $40 million and
improved working capital inflow of $95 million, primarily related to accounts receivable and accounts payable.
Investing Activities
Net cash used by investing activities was $189 million and $123 million during the years ended December 31, 2024 and 2023, respectively. The $66 million
increase in cash used by investing activities compared to the prior year is primarily due to increased capital expenditures of $12 million and the acquisition of
businesses, net of cash acquired, of $55 million.
Financing Activities
Net cash used by financing activities was $100 million and $156 million for during the years ended December 31, 2024 and 2023, respectively. This $56
million decrease compared to the prior year is primarily attributable to lower repurchases of common stock of $43 million and decreased dividends paid to non-
controlling interest of $17 million.
Debt and Capital Structure
See "Liquidity" above and also see Note 11, "Debt" and Note 15, "Stockholders' Equity and Non-controlling Interests" to the Company's consolidated financial
statements included in Item 8 of this Annual Report on Form 10-K for further information.
Fair Value Measurements
See Note 17, "Fair Value Measurements" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for
additional information.
Critical Accounting Estimates
The Company’s significant accounting policies have been disclosed in the consolidated financial statements and accompanying notes under Note 1, “Summary
of Significant Accounting Policies” to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Certain
policies relate to estimates that involve matters that are highly uncertain at the time the accounting estimate is made and different estimates or changes to an
estimate could have a material impact on the reported financial position, changes in financial condition or results of operations. Such critical estimates are
discussed below. For these, materially different amounts could be reported under varied conditions and assumptions. Other items in the Company's
consolidated financial statements require estimation; however, in the Company's opinion, they are not as critical as those discussed below.
Business Combinations
We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and any noncontrolling interest based on their fair values at the
acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates
when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition
rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the
net assets acquired is recorded as goodwill.
Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition,
as additional information about conditions existing at the acquisition date becomes available.
Acquisition costs are expensed as incurred.
28
Revenue Recognition
Revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Discrete price adjustments may occur
during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in product specifications. Some
of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part
may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be entitled based on
historical experience and input from customer negotiations. See Note 1, "Summary of Significant Accounting Policies” in the Company's consolidated financial
statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Product Warranty and Recall
The Company accrues for warranty obligations for products sold based on management estimates, with support from the Company’s sales, engineering, quality,
and legal functions, of the amount that eventually will be required to settle such obligations. This accrual is based on several factors including contractual
arrangements, past experience, current claims, production changes, industry developments, and various other considerations. The Company accrues for product
recall claims related to potential financial participation in customer actions to provide remedies as a result of actual or threatened regulatory or court actions or
the Company’s determination of the potential for such actions. The Company's accrual for recall claims is based on specific facts and circumstances underlying
individual claims with support from the Company’s engineering, quality, and legal functions. Amounts accrued are based upon management’s best estimate of
the amount that will ultimately be required to settle such claims. See Note 19, "Commitments and Contingencies" in the Company's consolidated financial
statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Restructuring
The Company accrues costs in connection with its restructuring of the engineering, administration, and manufacturing organizations. These accruals include
estimates primarily related to employee headcount, local statutory benefits, and other employee termination costs. Actual costs may vary from these estimates.
These accruals are reviewed on a quarterly basis and changes to restructuring actions are recognized when identified. See Note 4, “Restructuring and
Impairments” in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Pension Plans
Certain Company employees participate in defined benefit pension plans or retirement/termination indemnity plans. The Company has approximately
$97 million in unfunded net pension liabilities as of December 31, 2024, of which approximately $80 million and $17 million are attributable to U.S. and non-
U.S. pension plans, respectively. The determination of the Company’s obligations and expense for its pension plans is dependent on assumptions set by the
Company used by actuaries in calculating such amounts. Assumptions, including the discount rate, expected long-term rate of return on plan assets, and rate of
increase in compensation, are described in Note 12, “Employee Benefit Plans” to the Company’s consolidated financial statements included in Item 8 of this
Annual Report on Form 10-K, which are incorporated herein by reference.
29
Actual results that differ from assumptions used are accumulated and amortized over future periods and, accordingly, generally affect recognized expense in
future periods. Therefore, assumptions used to calculate benefit obligations as of the annual measurement date directly impact the expense to be recognized in
future periods. The primary assumptions affecting the Company’s accounting for employee benefits, as of December 31, 2024, are as follows:
Expected long-term rate of return on plan assets
The expected long-term rate of return is used to calculate net periodic pension cost. The required use of the expected long-term rate of return on plan assets
may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year. Over time the expected long-term rate of
return on plan assets is designed to approximate actual returns. The expected long-term rate of return for pension assets has been estimated based on various
inputs, including historical returns for the different asset classes held by the Company’s trusts and its asset allocation, as well as inputs from internal and
external sources regarding expected capital market returns, inflation, and other variables.
U.S. Plans
Non-U.S. Plans
2024
2023
2024
2023
Expected Rate of Return
7.23%
6.87%
2.00% - 9.60%
2.00% - 9.45%
Long-Term Rates of Return
7.06%
7.23%
2.00% - 10.60%
2.00% - 9.60%
Actual Rates of Return
3.79%
3.22%
(3.33)%
4.78%
The Company has set the long-term rates of return assumptions for its 2025 pension expense which range from 2.00% to 10.60% outside the U.S. and 7.06% in
the U.S.
Discount rate
The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain
non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the
applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is
based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected
benefit payments for each plan at its annual measurement date.
U.S. Plans
Non-U.S. Plans
2024
2023
2024
2023
Weighted Average Discount Rates
5.09%
5.40%
5.06%
5.33%
Discount Rates
5.09%
5.40%
1.75 - 10.65%
1.20% - 11.50%
While the Company believes that these assumptions are appropriate, significant differences in actual experience or significant changes in these assumptions
may materially affect the Company’s pension benefit obligations and its future expense. The following table illustrates the sensitivity to a change in certain
assumptions for Company sponsored U.S. and non-U.S. pension plans on its 2024 funded status and 2025 pretax pension expense.
Impact on U.S. 2025 Pretax
Pension Expense
Impact on
U.S. Plan 2024
Funded Status
Impact on Non-U.S. 2025
Pretax Pension Expense
Impact on
Non-U.S. Plan 2024
Funded Status
25 basis point decrease in discount
rate (a)(b)
Less than -$1 million
-$13 million
Less than -$1 million
-$6 million
25 basis point increase in discount
rate (a)(b)
Less than +$1 million
+$13 million
Less than +$1 million
+$5 million
25 basis point decrease in expected
return on assets (a)
Less than +$1 million
Less than +$1 million
25 basis point increase in expected
return on assets (a)
Less than -$1 million
Less than -$1 million
(a) Assumes all other assumptions are held constant.
(b) Excludes impact of assets used to hedge discount rate volatility.
30
Income Taxes
The Company's income tax expense, deferred tax assets, deferred tax liabilities, and liabilities for uncertain tax benefits reflect management’s best estimate of
current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and
estimates are required in the determination of consolidated income tax expense.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements,
which will result in taxable or deductible amounts in the future. In evaluating the Company's ability to realize a benefit with respect to the deferred tax assets in
the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including historical and projected future taxable
income, the expected timing of the reversals of existing temporary differences, the expected utilization of existing tax attribute carryforwards (e.g., net
operating losses and foreign tax credits), and tax planning strategies.
In developing the Company's estimates of future taxable income, the Company considers both the historical operating results adjusted for certain nonrecurring
transactions, as well as the Company's actual forecasted state, federal, and foreign pretax operating income. These estimates, and the relative weights placed
thereon, require the use of significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses.
If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded.
Prior to the year ended December 31, 2023, the Company recorded a full valuation allowance against the U.S. deferred tax assets primarily due to historical
cumulative losses.
For the year ended December 31, 2023, the Company evaluated both positive and negative evidence when considering if it was more likely than not that US
deferred tax assets would be realized. The Company concluded that the positive evidence, which included the Company (1) being in a substantive three-year
U.S. cumulative income position, (2) reporting U.S. income for 10 of the past 12 quarters, and (3) forecasting U.S. book and taxable income for the year ending
December 31, 2024, outweighed the negative evidence (the Company’s history of losses).
More specifically, the Company’s forecast of future taxable income using its objective and verifiable earnings history, indicated that it was more likely than not
that the Company would be able to realize a benefit for a substantial portion of its U.S. deferred tax assets, resulting in a partial release of its valuation
allowance related to its U.S. deferred tax assets. The deferred tax assets not expected to be realized based on the Company’s projections relate primarily to the
Company’s existing foreign tax credit carryforwards, as the Company has been and is expected to continue to generate excess credits in the near term, resulting
in an inability to use all of its existing credits prior to their expiration dates; certain U.S. federal net operating loss carryforwards that were not expected to
provide an incremental cash savings (i.e., they would only displace credits and deductions the Company would have otherwise had available to it); and State
operating loss carryforwards with a limited carryforward. The Company recorded a $313 million income tax benefit related to the partial release of its U.S.
valuation allowance as of December 31, 2023.
In evaluating the realizability of its U.S. deferred tax assets as of December 31, 2024, the Company considered all positive and negative evidence to determine
whether the deferred tax assets are more likely than not to be realized. This assessment resulted in a $49 million income tax benefit, further reducing the U.S.
valuation allowance. The change in evidence for assessing the realization of U.S. deferred taxes was primarily due to the Company's actual U.S. taxable income
in 2024 exceeding the previous year’s projections, along with projections indicating continued U.S. taxable income in 2025.
The Company’s results of operations are heavily dependent upon customer orders. The potential impact of government actions, such as enforcement of tariffs,
has not yet been included in the company’s projections but could have a significant impact on the realization of its deferred tax assets. Given the inherent
uncertainty in estimating future events, including projected taxable income, any improvement or deterioration in the Company’s future operating performance
could lead to significant changes in the Company's valuation allowance assessments. Factors influencing the remaining valuation allowance include variations
in forecasted sales volumes, which depend on customer orders, potential changes in U.S. tax law (such as the capitalization of research and development costs),
and the amount of future foreign tax credits generated (since these credits are utilized before the foreign tax credit carryforwards). Additionally, the complexity
of determining U.S. taxable income and related foreign tax
31
credit utilization, considering the Company's global structure, the nature of its deferred tax assets, and the timing of carryforward expiration of some tax
attributes, makes it challenging to fully assess the impact on the remaining valuation allowance if meaningful changes occur.
See Note 13, "Income Taxes" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional
information.
Recent Accounting Pronouncements
See Note 1, “Summary of Significant Accounting Policies” to the Company's consolidated financial statements under Item 8 of this Annual Report on Form 10-
K for a discussion of recent accounting pronouncements.
Forward-Looking Statements
Certain statements contained or incorporated in this Annual Report on Form 10-K which are not statements of historical fact constitute “Forward-Looking
Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements give current
expectations or forecasts of future events. Words such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “seek”, “estimate” and other words and terms of
similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements. These statements reflect the
Company’s current views with respect to future events and are based on assumptions and estimates, which are subject to risks and uncertainties including those
discussed in Item 1A under the heading “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Accordingly, undue reliance should not be placed
on these forward-looking statements. Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this
Annual Report on Form 10-K. The Company does not intend to update any of these forward-looking statements to reflect circumstances or events that occur
after the statement is made and qualifies all of its forward-looking statements by these cautionary statements.
You should understand that various factors, in addition to those discussed elsewhere in this document, could affect the Company’s future results and could
cause results to differ materially from those expressed in such forward-looking statements, including:
•
Uncertainties in U.S. policy regarding trade agreements, tariffs or other internation trade policies and any response to such actions by foreign
countries.
•
Significant or prolonged shortage of critical components from Visteon’s suppliers including, but not limited to semiconductors and those components
from suppliers who are sole or primary sources.
•
Failure of the Company’s joint venture partners to comply with contractual obligations or to exert undue influence in China.
•
Significant changes in the competitive environment in the major markets where Visteon procures materials, components, or supplies or where its
products are manufactured, distributed, or sold.
•
Visteon’s ability to satisfy its future capital and liquidity requirements; Visteon’s ability to access the credit and capital markets at the times and in the
amounts needed and on terms acceptable to Visteon; Visteon’s ability to comply with covenants applicable to it; and the continuation of acceptable
customer and supplier payment terms.
•
Visteon's ability to avoid or continue to operate during a strike, or partial work stoppage or slow down at any of Visteon's principal customers
•
Visteon’s ability to access funds generated by its foreign subsidiaries and joint ventures on a timely and cost-effective basis.
•
Changes in the operations (including products, product planning, and part sourcing), financial condition, results of operations, or market share of
Visteon’s customers.
•
Changes in vehicle production volume of Visteon’s customers in the markets where it operates.
•
Increases in commodity costs and the Company's ability to offset or recover these costs or disruptions in the supply of commodities, including resins,
copper, fuel, and natural gas.
•
Visteon’s ability to generate cost savings to offset or exceed agreed-upon price reductions or price reductions to win additional business and, in
general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs and capital
investments.
32
•
Visteon’s ability to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; and to
exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements.
•
Restrictions in labor contracts with unions that restrict Visteon’s ability to close plants, divest unprofitable, noncompetitive businesses, change local
work rules and practices at a number of facilities, and implement cost-saving measures.
•
The costs and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential asset
impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities.
•
Legal and administrative proceedings, investigations, and claims, including shareholder class actions, inquiries by regulatory agencies, product
liability, warranty, employee-related, environmental and safety claims, and any recalls of products manufactured or sold by Visteon.
•
Changes in economic conditions, currency exchange rates, interest rates, changes in foreign laws, regulations or trade policies, or political stability in
foreign countries where Visteon procures materials, components, or supplies or where its products are manufactured, distributed, or sold.
•
Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages, or other interruptions to or difficulties in the
employment of labor in the major markets where Visteon purchases materials, components, or supplies to manufacture its products or where its
products are manufactured, distributed, or sold.
•
Visteon’s ability to satisfy its pension and other postretirement employee benefit obligations, and to retire outstanding debt and satisfy other
contractual commitments, all at the levels and times planned by management.
•
Changes in laws, tariffs, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may
tax or otherwise increase the cost of, prohibit, or otherwise affect, the manufacture, licensing, distribution, sale, ownership, or use of Visteon’s
products or assets.
•
Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation
system, changes in fuel prices, and disruptions of supply.
•
The cyclical and seasonal nature of the automotive industry.
•
Visteon’s ability to comply with environmental, safety, and other regulations applicable to it and any increase in the requirements, responsibilities, and
associated expenses and expenditures of these regulations.
•
Disruptions in information technology systems including, but not limited to, system failure, cyber-attack, malicious computer software (malware
including ransomware), unauthorized physical or electronic access, or other natural or man-made incidents or disasters.
•
Visteon’s ability to protect its intellectual property rights and to respond to changes in technology and technological risks and to claims by others that
Visteon infringes their intellectual property rights.
•
Visteon’s ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting.
•
Other factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.
33
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
The primary market risks to which the Company is exposed include changes in currency exchange rates, interest rates and certain commodity prices. The
Company manages these risks through operating actions including fixed price contracts with suppliers and cost sourcing arrangements with customers and
through various derivative instruments. The Company's use of derivative instruments is strictly intended for hedging purposes to mitigate market risks pursuant
to written risk management policies. Accordingly, derivative instruments are not used for speculative or trading purposes. The Company's use of derivative
instruments creates exposure to credit loss in the event of non-performance by the counter-party to the derivative financial instruments. The Company limits
this exposure by entering into agreements directly with a variety of major financial institutions with high credit standards and that are expected to fully satisfy
their obligations under the contracts. Additionally, the Company's ability to utilize derivatives to manage market risk is dependent on credit conditions, market
conditions, and prevailing economic environment.
Foreign Currency Risk
The Company’s net cash inflows and outflows exposed to the risk of changes in foreign currency exchange rates arise from the sale of products in countries
other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, subsidiary dividends, investments in
subsidiaries, and anticipated foreign currency denominated transaction proceeds. The Company may utilize derivative financial instruments to manage foreign
currency exchange rate risks. Forward and option contracts may be utilized to reduce the impact to the Company's cash flow from adverse movements in
exchange rates. Foreign currency exposures are reviewed periodically, and any natural offsets are considered prior to entering into a derivative financial
instrument.
In addition to the transactional exposure described above, the Company's operating results are impacted by the translation of its foreign operating income into
U.S. dollars. The Company does not enter into currency exchange rate contracts to mitigate this exposure.
The hypothetical pretax gain or loss in fair value from a 10% favorable or adverse change in quoted currency exchange rates would be approximately
$20 million and $21 million for foreign currency derivative financial instruments as of December 31, 2024 and 2023, respectively. These estimated changes
assume a parallel shift in all currency exchange rates and include the gain or loss on financial instruments used to hedge investments in subsidiaries. Because
exchange rates typically do not all move in the same direction, the estimate may overstate the impact of changing exchange rates on the net fair value of the
Company's financial derivatives. It is also important to note that gains and losses indicated in the sensitivity analysis would generally be offset by gains and
losses on the underlying exposures being hedged.
Interest Rate Risk
See Note 18, "Financial Instruments" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional
information.
Commodity Risk
The Company's exposures to market risk from changes in the price of production material are managed primarily through negotiations with suppliers and
customers, although there can be no assurance that the Company will recover all such costs. The Company continues to evaluate derivatives available in the
marketplace and may decide to utilize derivatives in the future to manage select commodity risks if an acceptable hedging instrument is identified for the
Company's exposure level at that time, as well as the effectiveness of the financial hedge among other factors.
34
Item 8.
Financial Statements and Supplementary Data
Visteon Corporation and Subsidiaries
Index to Consolidated Financial Statements
Page No.
Report of Independent Registered Public Accounting Firm (PCAOB ID: 0034)
36
Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022
39
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022
40
Consolidated Balance Sheets as of December 31, 2024 and 2023
41
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
42
Consolidated Statements of Changes in Equity for the years ended December 31, 2024, 2023 and 2022
43
Notes to Consolidated Financial Statements
44
35
Report of Independent Registered Public Accounting Firm
To the stockholders and the Board of Directors of Visteon Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Visteon Corporation and subsidiaries (the "Company") as of December 31, 2024 and 2023,
the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity, for each of the three years in the period ended
December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also have
audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024
and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting
principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over
financial reporting at the German Acquisition, which was acquired on August 29, 2024, and the other Acquisition which was acquired on December 3, 2024.
These acquisitions constitute less than 3% of total assets and less than 1% of total revenues of the Company’s consolidated financial statement amounts as of
and for the year ended December 31, 2024. Accordingly, our audit did not include the internal control over financial reporting at the German Acquisition or the
other Acquisition.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
36
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required
to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on
the accounts or disclosures to which they relate.
Revenue Recognition - Non-routine price adjustments - Refer to Note 1 to the financial statements
Critical Audit Matter Description
The Company’s revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Discrete price adjustments
may occur during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in product
specifications. Some of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the
revenue for a given part may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be
entitled based on historical experience and input from customer negotiations.
Auditing non-routine price adjustments requires auditor judgment to evaluate the evidence available from customer negotiations.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to non-routine price adjustments including the following, among others:
•
We tested the effectiveness of controls over non-routine price adjustments.
•
We tested a sample of non-routine price adjustments recorded and compared such adjustments to underlying supporting documentation.
•
We inspected pricing-related communications between the Company and its customers.
•
We evaluated management’s process for estimating non-routine price adjustments by comparing current year adjustments to accruals established in
prior periods.
•
We made inquiries of Company executives responsible for customer relationships regarding customer negotiations and non-routine price adjustments.
Income Taxes - U.S. net deferred tax asset valuation allowance - Refer to Note 1 and Note 14 to the financial statements
Critical Audit Matter Description
The Company records a valuation allowance to reduce deferred tax assets when it is more likely than not that such assets will not be realized. In determining
the need for a valuation allowance, all available positive and negative evidence, including historical and projected financial performance, is considered along
with any other pertinent information.
As of December 31, 2024, after considering all positive and negative evidence, including improvement in the Company’s U.S. profitability beyond the
projections utilized in estimating the realizability of its U.S. deferred tax assets in 2023, the Company concluded that additional U.S. deferred income tax assets
were more likely than not to be realized resulting in a $49 million non-cash benefit (the tax benefit) to income tax expense in 2024. In determining the amount
of the U.S. valuation allowance to release, the Company applied the incremental economic benefit approach.
Auditing the tax benefit required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists,
due to the complexity in applying the incremental economic benefit approach.
37
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s tax benefit included the following, among others:
•
We tested the effectiveness of controls over management’s application of the incremental economic benefit approach to determine the amount of the
tax benefit.
•
With the assistance of our income tax specialists, we tested the application of the incremental economic benefit approach including the underlying data
and assumptions used by management.
•
We tested the completeness and accuracy of management’s calculation of the tax benefit.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 18, 2025
We have served as the Company's auditor since 2022.
38
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
Year Ended December 31,
2024
2023
2022
Net sales
$
3,866
$
3,954
$
3,756
Cost of sales
(3,335)
(3,467)
(3,388)
Gross margin
531
487
368
Selling, general and administrative expenses
(207)
(207)
(188)
Restructuring and impairment, net
(32)
(5)
(14)
Interest expense
(15)
(17)
(14)
Interest income
17
10
4
Equity in net (loss) income of non-consolidated affiliates
(3)
(10)
(1)
Other income (loss), net
7
(1)
20
Income (loss) before income taxes
298
257
175
Benefit from (provision for) income taxes
(14)
248
(45)
Net income (loss)
284
505
130
Less: Net (income) loss attributable to non-controlling interests
(10)
(19)
(6)
Net income (loss) attributable to Visteon Corporation
$
274
$
486
$
124
Basic earnings (loss) per share attributable to Visteon Corporation
$
9.93
$
17.30
$
4.41
Diluted earnings (loss) per share attributable to Visteon Corporation
$
9.82
$
17.05
$
4.35
See accompanying notes to the consolidated financial statements.
39
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Year Ended December 31,
2024
2023
2022
Net income (loss)
$
284
$
505
$
130
Foreign currency translation adjustments (a)
(68)
15
(66)
Net investment hedge (a)
13
(7)
8
Benefit plans, net of tax (a)
10
(51)
56
Unrealized hedging gains (losses), net of tax (a)
(1)
(1)
13
Other comprehensive income (loss), net of tax
(46)
(44)
11
Comprehensive income
238
461
141
Comprehensive income attributable to non-controlling interests
16
16
1
Comprehensive income attributable to Visteon Corporation
$
222
$
445
$
140
(a) These amounts are net of income tax effects.
See accompanying notes to the consolidated financial statements.
40
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
December 31,
2024
2023
ASSETS
Cash and equivalents
$
623
$
515
Restricted cash
3
3
Accounts receivable, net
578
666
Inventories, net
283
298
Other current assets
109
134
Total current assets
1,596
1,616
Property and equipment, net
452
418
Intangible assets, net
152
90
Right-of-use assets
100
109
Investments in non-consolidated affiliates
27
35
Deferred tax assets
441
384
Other non-current assets
94
75
Total assets
$
2,862
$
2,727
LIABILITIES AND EQUITY
Short-term debt
$
18
$
18
Accounts payable
505
551
Accrued employee liabilities
107
99
Current lease liability
29
30
Other current liabilities
257
233
Total current liabilities
916
931
Long-term debt, net
301
318
Employee benefits
127
160
Non-current lease liability
78
79
Deferred tax liabilities
43
31
Other non-current liabilities
87
85
Stockholders’ equity:
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of December 31,
2024 and 2023)
—
—
Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 27.2 and
27.7 million shares outstanding as of December 31, 2024 and December 31, 2023, respectively)
1
1
Additional paid-in capital
1,376
1,356
Retained earnings
2,548
2,274
Accumulated other comprehensive loss
(306)
(254)
Treasury stock
(2,390)
(2,339)
Total Visteon Corporation stockholders’ equity
1,229
1,038
Non-controlling interests
81
85
Total equity
1,310
1,123
Total liabilities and equity
$
2,862
$
2,727
See accompanying notes to the consolidated financial statements.
41
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
Year Ended December 31,
2024
2023
2022
Operating Activities
Net income
$
284
$
505
$
130
Adjustments to reconcile net income (loss) to net cash provided from operating activities:
Depreciation and amortization
96
104
108
Non-cash stock-based compensation
41
34
26
Equity in net income of non-consolidated affiliates, net of dividends remitted
8
15
4
Impairments
—
—
5
U.S. deferred tax benefit
(49)
(313)
—
Other non-cash items
9
(6)
(1)
Changes in assets and liabilities:
Accounts receivable
61
13
(156)
Inventories
1
52
(105)
Accounts payable
(32)
(130)
146
Other assets and other liabilities
8
(7)
10
Net cash provided from operating activities
427
267
167
Investing Activities
Capital expenditures, including intangibles
(137)
(125)
(81)
Acquisition of businesses, net of cash acquired
(55)
—
—
Net investment hedge transactions
—
—
12
Loan provided to non-consolidated affiliate
(5)
—
—
Loan repayment from non-consolidated affiliate
5
—
—
Other, net
3
2
1
Net cash used by investing activities
(189)
(123)
(68)
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
(18)
(13)
—
Dividends paid to non-controlling interests
(12)
(29)
(2)
Repurchase of common stock
(63)
(106)
—
Stock based compensation tax withholding payments
(7)
(16)
—
Proceeds from the exercise of stock options
—
8
—
Other
—
—
(3)
Net cash used by financing activities
(100)
(156)
(9)
Effect of exchange rate changes on cash
(30)
7
(22)
Net increase (decrease) in cash, equivalents, and restricted cash
108
(5)
68
Cash, equivalents, and restricted cash at beginning of the period
518
523
455
Cash, equivalents, and restricted cash at end of the period
$
626
$
518
$
523
Supplemental Disclosures:
Cash paid for interest
$
14
$
16
$
14
Cash paid for income taxes, net of refunds
$
73
$
68
$
29
See accompanying notes to the consolidated financial statements.
42
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions)
Total Visteon Corporation Stockholders' Equity
Common
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Total Visteon
Corporation
Stockholders'
Equity
Non-Controlling
Interests
Total Equity
December 31, 2021
$
1
$
1,349
$
1,664
$
(229)
$
(2,269)
$
516
$
100
$
616
Net income
—
—
124
—
—
124
6
130
Other comprehensive income (loss)
—
—
—
16
—
16
(5)
11
Stock-based compensation, net
—
3
—
—
16
19
—
19
Cash dividends
—
—
—
—
—
—
(2)
(2)
December 31, 2022
$
1
$
1,352
$
1,788
$
(213)
$
(2,253)
$
675
$
99
$
774
Net income
—
—
486
—
—
486
19
505
Other comprehensive income (loss)
—
—
—
(41)
—
(41)
(3)
(44)
Stock-based compensation, net
—
4
—
—
21
25
—
25
Shares repurchase
—
—
—
—
(107)
(107)
—
(107)
Cash dividends
—
—
—
—
—
—
(30)
(30)
December 31, 2023
$
1
$
1,356
$
2,274
$
(254)
$
(2,339)
$
1,038
$
85
$
1,123
Net income
—
—
274
—
—
274
10
284
Other comprehensive income (loss)
—
—
—
(52)
—
(52)
6
(46)
Stock-based compensation, net
—
20
—
—
12
32
—
32
Shares repurchase
—
—
—
—
(63)
(63)
—
(63)
Dividends payable
—
—
—
—
—
—
(7)
(7)
Cash dividends
—
—
—
—
—
—
(12)
(12)
Acquisition of non-controlling interest
—
—
—
—
—
—
(1)
(1)
December 31, 2024
$
1
$
1,376
$
2,548
$
(306)
$
(2,390)
$
1,229
$
81
$
1,310
See accompanying notes to the consolidated financial statements.
43
VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Summary of Significant Accounting Policies
Basis of Presentation: Visteon Corporation (the "Company" or "Visteon") financial statements have been prepared in conformity with accounting principles
generally accepted in the United States ("U.S. GAAP") on a going concern basis, which contemplates the continuity of operations, realization of assets, and
satisfaction of liabilities in the normal course of business.
Principles of Consolidation: The consolidated financial statements include the accounts of the Company and subsidiaries over which it exerts control.
Investments in affiliates over which the Company does not exercise control, but does have the ability to exercise significant influence over operating and
financial policies, are accounted for using the equity method.
The Company determines whether the joint venture in which it has invested is a Variable Interest Entity (“VIE”) at the start of each new venture and when a
reconsideration event has occurred. An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary
has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the
right to receive benefits from the VIE that could potentially be significant to the VIE.
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 December 31, 2024 will be reflected in management's estimates for future periods.
Foreign Currency: We translate the assets and liabilities of foreign subsidiaries to United States (U.S.) dollars at end-of-period exchange rates. We translate the
income statement elements of foreign subsidiaries to U.S. dollars at average-period exchange rates. We report the effect of translation for foreign subsidiaries
that use the local currency as their functional currency as a separate component of stockholders' equity. Gains and losses resulting from the remeasurement of
assets and liabilities in a currency other than the functional currency of a subsidiary are reported in current period income. We also report any gains and losses
arising from transactions denominated in a currency other than the functional currency of a subsidiary in current period income. Net transaction gains and
losses decreased net income by $2 million, decreased net income by $2 million, and increased net income by $5 million for the years ended December 31,
2024, 2023, and 2022, respectively.
Revenue Recognition: The Company generates revenue from the production of automotive vehicle cockpit electronics parts sold to Original Equipment
Manufacturers ("OEMs"), or Tier 1 suppliers at the direction of the OEM, under long-term supply agreements supporting new vehicle production. Such
agreements may also require related production for service parts subsequent to initial vehicle production periods.
The Company’s contracts with customers consist of various governing documents (such as long-term supply agreements, master purchase agreements, purchase
orders and customer release order) which do not reach the level of a performance obligation of the Company until the Company receives either a purchase
order and/or a customer release for a specific number of parts at a specified price, at which point the collective group of documents represent an enforceable
contract. While the long-term supply agreements generally range from three to five years, customers make no commitments to volumes, and pricing or
specifications can change prior to or during production. The Company recognizes revenue when control of the parts produced are transferred to the customer
according to the terms of the contract, which is usually when the parts are shipped or delivered to the customer’s premises. Customers are generally invoiced
upon shipment or delivery and payment generally occurs within 45 to 90 days and do not include significant financing components. Customers in China are
often invoiced one month after shipment or delivery. Customer returns, when they occur, relate to quality rework issues and are not connected to any
repurchase obligation of the Company. As of December 31, 2024, all unfulfilled performance obligations are expected to be fulfilled within the next twelve
months.
Revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Discrete price adjustments may occur
during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in product specifications. Some
of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part
may vary from the purchase order,
44
the Company records consideration at the most likely amount to which the Company expects to be entitled based on historical experience and input from
customer negotiations. The Company records pricing accruals as adjustments to Net sales and Accounts receivable, net, within the Consolidated Statements of
Operations and Consolidated Balance Sheets, respectively. In addition, the Company periodically negotiates cost recoveries with its customers. Recoveries are
recorded as adjustments to Net sales when agreements with customers become contractual. The Company adjusts its pricing reserves at the earlier of when the
most likely amount of consideration changes or when the consideration becomes fixed. In 2024, revenue recognized related to performance obligations
satisfied in previous periods represented less than 1% of consolidated net sales.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the
Company from a customer are excluded from revenue. Shipping and handling costs associated with outbound freight after control of the parts has transferred to
a customer are accounted for as a fulfillment cost and are included in Cost of sales.
Restructuring Expense: Restructuring expense includes costs directly associated with exit or disposal activities. Such costs include employee severance and
termination benefits, special termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records
involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs are probable and estimable. For
one-time termination benefits (i.e., no substantive plan) and employee retention costs, expense is recorded when the employees are entitled to receive such
benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when
incurred.
Debt Issuance Costs: The costs related to issuance or modification of long-term debt are deferred and amortized into interest expense over the life of each
respective debt issue. Deferred amounts associated with debt extinguished prior to maturity are expensed upon extinguishment.
Other Costs within Cost of Sales: Repair and maintenance costs, certain pre-production costs, and research and development expenses are expensed as
incurred. Pre-production costs expensed represent engineering and development costs that are not contractually guaranteed for reimbursement by the customer.
Research and development expenses include salary and related employee benefits, contractor fees, information technology, occupancy, telecommunications,
depreciation, forward model program development, and advanced engineering activities. Research and development expenses were $191 million, $210 million,
and $196 million in 2024, 2023 and 2022, respectively, which includes recoveries from customers of $143 million, $120 million and $145 million, respectively.
Net Earnings (Loss) Per Share Attributable to Visteon: Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to Visteon by the
average number of shares of common stock outstanding. Diluted earnings (loss) per share is computed by dividing net income (loss) attributable to Visteon by
the average number of common and potential dilutive common shares outstanding after deducting undistributed income allocated to participating securities.
Performance based share units are considered contingently issuable shares and are included in the computation of diluted earnings per share if their conditions
have been satisfied as if the reporting date was the end of the contingency period.
Cash and Equivalents: The Company considers all highly liquid investments purchased with an original maturity of three months or less, including short-term
time deposits, commercial paper, repurchase agreements, and money market funds to be cash and cash equivalents. As of December 31, 2024, the Company's
cash balances are invested in a diversified portfolio of cash and highly liquid cash equivalents including money market funds and time deposits with highly
rated banking institutions with maturities less than three months. The cost of such funds approximates fair value based on the nature of the investment.
Restricted Cash: Restricted cash represents amounts designated for uses other than current operations and includes $2 million related to a Letter of Credit
Facility, and $1 million related to cash collateral for other corporate purposes as of December 31, 2024 and 2023.
Accounts Receivable: Accounts receivable are stated at the invoiced amount, less an allowance for doubtful accounts for estimated amounts not expected to be
collected, and do not bear interest.
The Company receives bank notes from certain customers in China to settle trade accounts receivable. The collection on such bank notes are included in
operating cash flows based on the substance of the underlying transactions, which are operating in nature. The Company may hold such bank notes until
maturity, exchange them with suppliers to settle liabilities, or sell them to third-party financial institutions in exchange for cash. The Company has entered into
arrangements with financial institutions to sell certain bank notes, generally maturing within nine months. Bank notes are sold with recourse but qualify as a
sale as all
45
rights to the notes have passed to the financial institution. The Company redeemed $159 million of China bank notes during the year ended December 31,
2024. Remaining amounts outstanding at third-party institutions related to sold bank notes will mature by June 30, 2025.
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
will be 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 related to accounts receivable and related activity are summarized below:
December 31,
(In millions)
2024
2023
2022
Balance at beginning of year
$
7
$
5
$
4
Provision
3
2
1
Balance at end of year
$
10
$
7
$
5
Provision for estimated uncollectible accounts receivable are included in Selling, general and administrative expenses in the Company's Consolidated
Statements of Operations.
Inventories: Inventories are stated at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or net realizable value. Cost includes the cost of
materials, direct labor, in-bound freight and the applicable share of manufacturing overhead. The cost of inventories is reduced for excess and obsolete
inventories based on management’s review of on-hand inventories compared to historical and estimated future sales and usage.
Product Tooling: Product tooling includes molds, dies, and other tools used in production of a specific part or parts of the same basic design owned either by
the Company or its customers. Company owned tooling is capitalized and depreciated over the shorter of the expected useful life of the tooling or the term of
the supply arrangement, generally not exceeding six years. The Company had receivables of $29 million and $22 million as of December 31, 2024 and 2023,
respectively, related to product tools which will not be owned by the Company and for which there is a contractual agreement for reimbursement from the
customer.
Contractually Reimbursable Engineering Costs: Engineering, testing, and other costs incurred in the design and development of production parts are expensed
as incurred, unless the cost reimbursement is contractually guaranteed in a customer contract, in which case costs are capitalized and subsequently reduced
upon lump sum or piece price recoveries.
Property and Equipment: Property and equipment is stated at cost, or if impaired at fair value as of the impairment date. Property and equipment is depreciated
using the straight-line method of depreciation over the related asset's estimated useful life.
Asset impairment charges are recorded for assets held-in-use when events and circumstances indicate that such assets may not be recoverable and the
undiscounted net cash flows estimated to be generated by those assets are less than their carrying amounts. If estimated future undiscounted cash flows are not
sufficient to recover the carrying value of the assets, an impairment charge is recorded for the amount by which the carrying value of the assets exceeds fair
value. Fair value is determined using appraisals, management estimates, or discounted cash flow calculations. For further detail on asset impairments see Note
4, "Restructuring and Impairments."
Leases: The Company determines if an arrangement is a lease at contract inception. Right-of-use ("ROU") assets represent the Company's right to use an
underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and
liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not
provide an implicit rate, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease
commencement. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise
such options. Lease expense is recognized on a straight-line basis over the lease term. The
46
Company has lease agreements containing lease and non-lease components which are accounted for as a single lease component.
Goodwill: The Company performs either a qualitative or quantitative assessment of goodwill for impairment on an annual basis. Goodwill impairment is tested
annually on October 1 and when occasions warrant a review. Goodwill impairment testing is performed at the reporting unit level. The qualitative assessment
considers several factors at the reporting unit level including the excess of fair value over carrying value as of the last quantitative impairment test, the length
of time since the last fair value measurement, the current carrying value, market and industry metrics, actual performance compared to forecast performance,
and the Company's current outlook on the business. If the qualitative assessment indicates it is more likely than not that goodwill is impaired, the reporting unit
is quantitatively tested for impairment. To quantitatively test goodwill for impairment, the fair value of the reporting unit is determined and compared to the
carrying value. An impairment charge is recognized for the amount by which the reporting unit's carrying value exceeds its fair value.
Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives, and tested for impairment in
accordance with the methodology discussed above under "Property and Equipment."
Government Incentives: The Company receives certain incentives from governments primarily related to research and development programs. The Company
records incentives in accordance with their purpose as a reduction of expense or an offset to the related property and equipment. The benefit is recorded when
all conditions related to the incentive have been met or are expected to be met and there is reasonable assurance of their receipt. The Company recorded
incentive benefits of $2 million and less than $1 million for the years ended December 31, 2024 and 2023, respectively, and deferred income of $3 million and
$1 million as of December 31, 2024 and 2023, respectively.
Product Warranty and Recall: Amounts accrued for product warranty and recall claims are based on management’s best estimates of the amounts that will
ultimately be required to settle such items. The Company’s estimates for product warranty and recall obligations are developed with support from its sales,
engineering, quality, and legal functions and include consideration of contractual arrangements, past experience, current claims and related information,
production changes, industry and regulatory developments and various other considerations. For further detail on warranty obligations see Note 19,
"Commitments and Contingencies."
Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The Company records a valuation allowance to reduce deferred tax assets when it is more likely than not that such assets will not be realized. This assessment
requires significant judgment, and must be done on a jurisdiction-by-jurisdiction basis. The Company monitors the realizability of its deferred tax assets taking
into account all relevant factors at each reporting period. In determining the need for a valuation allowance, all available positive and negative evidence,
including historical and projected financial performance, is considered along with any other pertinent information. The Company valuation allowance
assessment is based on its best estimate of future results considering all available information.
The Company operates in multiple jurisdictions throughout the world and the income tax returns of its subsidiaries in various tax jurisdictions are subject to
periodic examination by respective tax authorities. The Company regularly assesses the status of these examinations and the potential for adverse and/or
favorable outcomes to determine the adequacy of its provision for income taxes. The Company believes that it has adequately provided for tax adjustments that
it believes are more likely than not to be realized as a result of any ongoing or future examination. Accounting estimates associated with uncertain tax positions
requires the Company to make judgments regarding the sustainability of each uncertain tax position based on its technical merits. If the Company determines it
is more likely than not a tax position will be sustained based on its technical merits, the Company records the largest amount that is greater than 50% likely of
being realized upon ultimate settlement. These estimates are updated at each reporting date based on the facts, circumstances and information available. Due to
the complexity of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the
liabilities recorded. Accrued interest and penalties related to unrecognized tax benefits are classified as income tax expense.
Value Added Taxes: The Company reports value added taxes collected from customers and remitted to government authorities, on a net basis within Cost of
sales.
47
Financial Instruments: The Company uses derivative financial instruments, including forward contracts, swaps, and options to manage exposures to changes in
currency exchange rates and interest rates. The Company's policy specifically prohibits the use of derivatives for speculative or trading purposes.
Accounting Pronouncements Not Yet Adopted
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.
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.
In December 2023, the FASB issued ASU No. 2023-09 (“ASU 2023-09”), Income Taxes (Topic 740): Improvement to Income Tax Disclosures to enhance the
transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a
prospective basis and early adoption is permitted. The Company is currently evaluating the potential effect of this accounting standard update on its
consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (DISE) which requires disaggregated
disclosure of income statement expenses for public business entities. The standard requires public business entities to disclose disaggregated information about
specific natural expense categories underlying certain income statement expense line items that are considered relevant. The FASB also issued ASU No. 2025-
01 (“ASU 2025-01”), Clarifying the Effective Date, which clarifies the adoption date of ASU 2024-03 as annual reporting periods beginning after December
15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027 The Company is currently evaluating the potential effect of
this accounting standard update on its consolidated financial statements and related disclosures.
Recently adopted accounting pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment
disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker
(“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual
identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and
deciding how to allocate resources. The Company adopted this ASU retrospectively on December 31, 2024. Refer to Note 20, "Segment Information and
Revenue Recognition" inclusion of the new required disclosures.
48
NOTE 2. Business Acquisition
On August 29, 2024, Visteon acquired all equity shares of a German advanced design and R&D services company for cash of $55 million ("German
Acquisition") not including contingent consideration of up to $13 million to be paid over a period not to exceed three years if certain financial and operational
milestones are achieved. The German Acquisition is expected to expand and strengthen the Company's technology service offerings.
As of December 31, 2024, the German Acquisition purchase price was allocated to the assets and liabilities assumed as follows:
(In millions)
Cash
$
55
Fair value of contingent consideration
8
Total fair value of consideration
$
63
Assets acquired:
Cash
$
3
Accounts receivable
5
Intangible assets
36
Other non-current assets
2
$
46
Liabilities assumed:
Deferred tax liability
$
11
Other liabilities
8
$
19
Goodwill
$
36
The German Acquisition was accounted for as a business combination, assets acquired and liabilities assumed were initially recorded at estimated fair values
based on management's estimates at the date of acquisition based on available information, reasonable and supportable assumptions and, when necessary, a
third-party utilized by the Company to assist with certain fair value estimates. The purchase price was allocated on a preliminary basis as of August 29, 2024,
certain adjustments were made as of December 31, 2024 based on updated information provided by management, such adjustments resulted in an increase in
goodwill of $1 million. The purchase price allocation is subject to change during the measurement period and may be subsequently adjusted to reflect final
valuation results. The measurement period is not to exceed one year from the acquisition date during which the Company may adjust estimated or provisional
amounts recorded if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in
revised estimated values of those assets or liabilities as of that date. Measurement period adjustments are recorded in the period identified. Any adjustments to
amounts recorded in purchase accounting that do not qualify as measurement period adjustments are included in earnings in the period identified. As of
December 31, 2024 the final purchase price allocation has not been completed.
Fair values for intangible assets were based on the income approach including excess earnings and relief from royalty methods. The Company recorded
intangible assets including a tradename of $2 million and customer-related assets totaling $34 million. These definite-lived intangible assets are being
amortized using the straight-line method over their estimated useful lives of 10 years for tradename and 15 years for customer-related assets. The fair value of
contingent consideration was measured using a Monte Carlo simulation which is a financial model that utilizes the probabilities of various outcomes.
Goodwill arising from the Acquisition is deductible for tax purposes.
These fair value measurements are classified within level 3 of the fair value hierarchy. Certain preliminary purchase price allocations may be subsequently
adjusted to reflect final valuation results.
The pro forma effects of the German Acquisition do not materially impact the Company's reported results for any period presented, and as a result no unaudited
pro forma disclosures are included herein.
49
The Company incurred $1 million in costs related to the Acquisition which are classified as Other income (expense).
The Company acquired an additional business in the fourth quarter of 2024 for cash consideration of $3 million which was allocated to Goodwill as of
December 31, 2024.
50
NOTE 3. Non-Consolidated Affiliates
A summary of the Company's investments in non-consolidated equity method affiliates is provided below:
December 31,
(In millions)
2024
2023
Yanfeng Visteon Investment Co., Ltd. ("YFVIC") (50%)
$
—
$
8
Limited partnerships
15
15
Others
12
12
Total investments in non-consolidated affiliates
$
27
$
35
Investments in Affiliates
Due to losses reported in the aggregate by our non-consolidated affiliates, the Company recorded a reduction in our investments in non-consolidated affiliates
of $3 million, $10 million, and $1 million for the year ended December 31, 2024, 2023, and 2022, respectively.
The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines
that an other-than-temporary decline in value has occurred, an impairment loss will be recorded, measured as the difference between the carrying value and the
fair value of the investment. As of December 31, 2024, the Company determined that no such indicators were present.
Non-Consolidated Affiliate Transactions
The Company has committed to make a $20 million investment in multiple 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. Through
December 31, 2024, the Company had contributed approximately $13 million to these entities. These investments are classified as equity method investments.
In 2022, the Company made an investment in a private limited company focused on technology development for the automotive industry of $1 million. There
have been no further contributions as of December 31, 2024.
A $6 million dividend was declared and paid by a non-consolidated affiliate during 2024.
Variable Interest Entities
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.
A summary of transactions with affiliates is shown below:
Year Ended December 31,
(In millions)
2024
2023
Billings to affiliates (a)
$
50
$
45
Purchases from affiliates (b)
$
25
$
62
(a) Primarily relates to parts production and engineering reimbursement
(b) Primarily relates to engineering services as well as selling, general and administrative expenses
51
A summary of the Company's investments in YFVIC is provided below:
December 31,
(In millions)
2024
2023
Payables due to YFVIC
$
22
$
24
Exposure to loss in YFVIC
Investment in YFVIC
$
—
$
8
Receivables due from YFVIC
13
19
Maximum exposure to loss in YFVIC
$
13
$
27
During 2024, the Company's share of YFVIC reported losses were greater than the carrying value of this investment. Based on the equity method of
accounting, losses exceeding the investment balance were not recorded and are monitored as suspended losses. As of December 31, 2024, the total suspended
loss attributable to YFVIC was $3 million, for which the Company has no contractual obligation to fund.
During the second quarter of 2024, the Company loaned YFVIC $5 million to provide financial support. During the fourth quarter of 2024, YFVIC repaid the
loan to the Company in full.
During the fourth quarter of 2022 the Company incurred approximately $19 million of charges related to program management costs and other charges
associated with a joint venture. This charge is recorded within Cost of sales.
The Company recorded a $9 million settlement charge related to a one-time contract dispute with a joint venture partner during the second quarter 2022. This
charge is recorded within Cost of sales.
NOTE 4. Restructuring and Impairments
During the year ended December 31, 2024, 2023, and 2022, the Company recorded $32 million, $5 million, and $9 million, respectively, of net restructuring
expense primarily related to employee severance.
Current restructuring actions include the following:
•
During September of 2024, the Company approved a global restructuring program impacting manufacturing and engineering facilities, as well as
administrative functions to improve efficiency and further rationalize the Company’s footprint. During the year ended December 31, 2024, the
Company recorded approximately $27 million of employee severance, retention and termination costs related to this program. As of December 31,
2024, $22 million remains accrued for the program and all payments are expected to be made in 2025.
•
During the year ended December 31, 2024, the Company approved and recorded $5 million of net restructuring expense related to various other global
programs to improve efficiencies and rationalize the Company's footprint. As of December 31, 2024, $2 million remains accrued related to this action.
•
During prior periods the Company approved various restructuring programs to improve efficiencies across the organization. As of December 31, 2024,
$1 million remains accrued related to these programs.
•
As of December 31, 2024, 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.
52
Restructuring Reserves
The Company’s restructuring reserves and related activity are summarized below. The Company anticipates that the activities associated with the current
restructuring reserve balance will be substantially complete by the end of 2026. The Company’s condensed consolidated restructuring reserves are shown as
Other liabilities as detailed in Note 10, "Other Liabilities"..
(In millions)
December 31, 2021
$
18
Expense
6
Change in estimates
3
Payments
(15)
Foreign currency
(1)
December 31, 2022
$
11
Expense
6
Change in estimates
(1)
Payments
(8)
Foreign currency
—
December 31, 2023
$
8
Expense
32
Payments
(10)
Foreign currency
(2)
December 31, 2024
$
28
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.
In 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
$5 million to fully impair property and equipment and reduce inventory to its net realizable value. Additionally, as a result of the closure, during the fourth
quarter of 2022, the Company recorded expense of approximately $3 million related to foreign currency translation amounts recorded in accumulated other
comprehensive loss.
NOTE 5. Inventories
Inventories, net consist of the following components:
December 31,
(In millions)
2024
2023
Raw materials
$
199
$
229
Work-in-process
31
32
Finished products
53
37
$
283
$
298
53
NOTE 6. Other Assets
Other current assets are comprised of the following components:
December 31,
(In millions)
2024
2023
Recoverable taxes
$
47
$
51
Prepaid assets and deposits
23
24
Contractually reimbursable engineering costs
20
33
Joint venture receivables
13
19
Contractual payments
1
3
Other
5
4
$
109
$
134
Other non-current assets are comprised of the following components:
December 31,
(In millions)
2024
2023
Contractual payments
$
25
$
22
Contractually reimbursable engineering costs
21
21
Derivative financial instruments
8
1
Recoverable taxes
6
10
Other
34
21
$
94
$
75
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 payments of approximately $20
million in 2025, $17 million in 2026, $1 million in 2027, $1 million in 2028 and $2 million in 2029 and beyond.
54
NOTE 7. Property and Equipment
Property and equipment, net consists of the following:
December 31,
(In millions)
Estimated Useful Life
(years)
2024
2023
Land
$
8
$
9
Buildings and improvements
40
100
95
Machinery, equipment and other
3-15
809
772
Product tooling
3-5
91
86
Construction in progress
91
83
Total property and equipment
1,099
1,045
Accumulated depreciation and amortization
(647)
(627)
Property and equipment, net
$
452
$
418
Depreciation and product tooling amortization expenses are summarized as follows:
Year Ended December 31,
(In millions)
2024
2023
2022
Depreciation
$
76
$
77
$
83
Amortization
7
7
7
$
83
$
84
$
90
The net book value of capitalized internal use software costs was approximately $7 million and $8 million as of December 31, 2024 and 2023. respectively.
Related amortization expense was approximately $5 million, $3 million and $5 million for the years ended 2024, 2023 and 2022, respectively.
Amortization expense related to internal use software expected for the future annual periods are as follows:
(In millions)
2025
$
3
2026
2
2027
1
2028
1
55
NOTE 8. Intangible Assets
Intangible assets consisted of the following:
December 31, 2024
December 31, 2023
(In millions)
Estimated
Useful Life
Estimated
Weighted
Average
Remaining
Useful Life
(years)
Gross
Intangibles
Accumulated
Amortization
Net Intangibles
Gross
Intangibles
Accumulated
Amortization
Net Intangibles
Definite-Lived:
Developed
technology
10-12 years
3
$
33
$
(33)
$
—
$
40
$
(39)
$
1
Customer related
8-16 years
15
43
(9)
34
86
(83)
3
Capitalized
software
development
5 years
3
55
(31)
24
52
(24)
28
Tradename
10 years
10
2
—
2
—
—
—
Other
2-32 years
11
26
(15)
11
26
(12)
14
Subtotal
159
(88)
71
204
(158)
46
Indefinite-
Lived:
Goodwill
81
—
81
44
—
44
Total
$
240
$
(88)
$
152
$
248
$
(158)
$
90
Capitalized software development consists of software development costs intended for integration into customer products.
Goodwill as of December 31, 2024 consisted of the following:
(In millions)
December 31, 2021
$
50
Foreign currency
(5)
December 31, 2022
$
45
Foreign currency
(1)
December 31, 2023
$
44
Additions
39
Foreign currency
(2)
December 31, 2024
$
81
The Company recorded amortization expense of approximately $12 million, $19 million, and $18 million for the years ended December 31, 2024, 2023, and
2022, respectively, related to definite-lived intangible assets.
56
The Company currently estimates annual amortization expense to be as follows:
(In millions)
2025
$
15
2026
13
2027
9
2028
4
2029
4
NOTE 9. Leases
The Company has operating leases primarily for corporate offices, technical and engineering centers, plants, vehicles, and certain equipment. As of
December 31, 2024 and 2023 the Company had $6 million and $7 million of net assets recorded under finance leasing arrangements, respectively.
Certain of the Company's lease agreements include rental payments adjusted periodically primarily for inflation. The Company’s lease agreements do not
contain any material residual value guarantees or material restrictive covenants. The Company subleases certain real estate to third parties primarily in the U.S.,
Germany, and Brazil.
For the years ended December 31, 2024 and 2023, the weighted average remaining lease term and discount rate for operating leases were 5 years and 4.9% and
4 years and 4.14%, respectively. For the years ended December 31, 2024 and 2023, the weighted average remaining lease term and discount rate for financing
leases were 38 years and 4.65% and 40 years and 4.54%, respectively.
The components of lease expense are as follows:
Year Ended December 31,
(In millions)
2024
2023
2022
Operating lease expense (includes immaterial variable lease costs)
(38)
$
(38)
$
(36)
Short-term lease expense
(2)
(2)
(1)
Sublease income
2
2
2
Total lease expense
$
(38)
$
(38)
$
(35)
Other information related to leases is as follows:
Year Ended December 31,
(In millions)
2024
2023
2022
Cash flows used for operating leases
36
$
36
$
33
Right-of-use assets obtained in exchange for lease obligations
29
$
11
$
17
Future minimum lease payments under non-cancellable leases are as follows:
(In millions)
2025
$
33
2026
28
2027
17
2028
12
2029
8
2030 and thereafter
34
Total future minimum lease payments
132
Less imputed interest
(25)
Total lease liabilities
$
107
57
NOTE 10. Other Liabilities
Other current liabilities are summarized as follows:
December 31,
(In millions)
2024
2023
Product warranty and recall
$
49
$
48
Deferred income
48
57
Non-income taxes payable
33
25
Income taxes payable
25
25
Joint venture payables
22
25
Royalty reserves
19
16
Restructuring reserves
19
5
Dividends payable
10
2
Other
32
30
$
257
$
233
Other non-current liabilities are summarized as follows:
December 31,
(In millions)
2024
2023
Product warranty and recall accruals
$
31
$
23
Income tax reserves
15
12
Deferred income
12
12
Restructuring reserves
9
3
Contingent payments
2
7
Derivative financial instruments
1
9
Other
17
19
$
87
$
85
NOTE 11. Debt
The Company’s short and long-term debt consists of the following:
Weighted Average
Interest Rate
Carrying Value
(In millions)
2024
2023
2024
2023
Short-Term Debt:
Current portion of long-term debt
6.39%
6.53%
$
18
$
18
Long-Term Debt:
Term facility, net
6.39%
6.53%
$
301
$
318
58
On July 19, 2022 the Company entered into an amended and restated Credit Agreement which included a $350 million Term Facility and a $400 million
Revolving Credit Facility. The amendment, among other things, changed the Credit Agreement from a LIBOR-based rate to a Secured Overnight Financing
Rate ("SOFR") based rate and extended the Credit Agreement maturity date to July 19, 2027.
On June 28, 2023, the Company amended the existing Credit Agreement to, among other things, amend certain affirmative and negative covenants.
The Company has deferred costs of $2 million and $1 million related to these amendments to the Credit Agreement, which are recorded in Other non-current
assets and Long-term debt, net, respectively. The deferred costs will be amortized over the term of the Credit Agreement.
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 December 31, 2024, the Company has no other short-term borrowings, including at the Company's subsidiaries. The Company's subsidiaries have access
to $150 million of capacity under short-term credit facilities.
Long-Term Debt
The Company has no outstanding borrowings on the Revolving Credit Facility as of December 31, 2024 and 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.
The principal maturities of long-term debt as of December 31, 2024 are as follows:
(In millions)
2025
$
18
2026
18
2027
283
59
Other
The Company has a $6 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 cash, as of December 31, 2024 and 2023. Additionally, the
Company had $4 million and $2 million of locally issued bank guarantees and letters of credit as of December 31, 2024 and 2023, respectively, to support
various tax appeals, customs arrangements and other obligations at its local affiliates.
NOTE 12. Employee Benefit Plans
Defined Benefit Plans
The Company sponsors pay related benefit plans for employees in the U.S., U.K., Germany, Brazil, France, Mexico, Japan, and Canada. Employees in the U.S.
and UK are no longer accruing benefits under the Company's defined benefit plans as these plans were frozen. The Company’s defined benefit plans are
partially funded with the exception of certain supplemental benefit plans for executives and certain non-U.S. plans, primarily in Germany, which are unfunded.
The Company's expense for all defined benefit pension plans, is as follows:
U.S. Plans
Non-U.S. Plans
Year Ended December 31,
Year Ended December 31,
(In millions, except percentages)
2024
2023
2022
2024
2023
2022
Costs Recognized in Income:
Pension service cost:
Service cost
$
—
$
—
$
—
$
(1)
$
(1)
$
(1)
Pension financing benefit (cost):
Interest cost
(31)
(32)
(20)
(9)
(10)
(6)
Expected return on plan assets
41
41
39
10
10
9
Amortization of losses and other
—
1
(1)
—
1
(1)
Settlements
(4)
—
—
—
—
—
Restructuring related pension cost:
Special termination benefits
—
—
—
(1)
(1)
—
Net pension income (expense)
$
6
$
10
$
18
$
(1)
$
(1)
$
1
Weighted Average Assumptions:
Discount rate
5.16 %
5.51 %
2.93 %
5.07 %
5.30 %
2.31 %
Compensation increase
NA
NA
N/A
2.89 %
2.69 %
2.30 %
Long-term return on assets
7.23 %
6.87 %
6.23 %
4.79 %
4.60 %
3.70 %
The Company's total accumulated benefit obligations for all defined benefit plans was $723 million and $818 million as of
December 31, 2024 and 2023, respectively. The benefit plan obligations for employee retirement plans with accumulated benefit obligations in excess of plan
assets were as follows:
Year Ended December 31,
(In millions)
2024
2023
Accumulated benefit obligation
$
594
$
671
Projected benefit obligation
$
596
$
674
Fair value of plan assets
$
486
$
529
Assumptions used by the Company in determining its defined benefit pension obligations as of December 31, 2024 and 2023 are summarized in the following
table:
60
U.S. Plans
Non-U.S. Plans
Year Ended December 31,
Year Ended December 31,
Weighted Average Assumptions
2024
2023
2024
2023
Discount rate
5.65 %
5.16 %
5.82 %
5.07 %
Rate of increase in compensation
NA
NA
2.58 %
2.89 %
Cash balance interest crediting rate
4.15 %
4.28 %
1.60 %
1.25 %
61
The Company’s obligation for all defined benefit pension plans, is as follows:
U.S. Plans
Non-U.S. Plans
Year Ended December 31,
Year Ended December 31,
(In millions)
2024
2023
2024
2023
Change in Benefit Obligation:
Benefit obligation — beginning
$
622
$
603
$
201
$
178
Service cost
—
—
1
1
Interest cost
31
32
9
10
Actuarial loss (gain)
(25)
27
(19)
10
Settlements
(40)
—
(1)
(1)
Special termination benefits
—
—
(1)
1
Foreign exchange translation
—
—
(11)
10
Benefits paid and other
(36)
(40)
(5)
(8)
Benefit obligation — ending
$
552
$
622
$
174
$
201
Change in Plan Assets:
Plan assets — beginning
$
509
$
532
$
172
$
157
Actual return on plan assets
19
17
(6)
8
Sponsor contributions
19
—
7
7
Settlements
(40)
—
(1)
(1)
Foreign exchange translation
—
—
(8)
9
Benefits paid and other
(35)
(40)
(7)
(8)
Plan assets — ending
$
472
$
509
$
157
$
172
Total funded status at end of period
$
(80)
$
(113)
$
(17)
$
(29)
Balance Sheet Classification:
Other non-current assets
—
$
—
$
12
$
3
Accrued employee liabilities
—
—
(1)
(1)
Employee benefits
(80)
(113)
(28)
(31)
Accumulated other comprehensive loss:
Actuarial loss
57
65
27
32
Tax effects/other
(9)
(11)
(9)
(10)
$
48
$
54
$
18
$
22
During the year ended December 31, 2024, the Company offered terminate vested participants of the U.S. defined benefit plans a discretionary lump sum
distribution option. The amount of participant lump sum distributions amounted to $38 million.
Components of the net change in AOCI related to all defined benefit pension plans, exclusive of amounts attributable to non-controlling interests on the
Company’s Consolidated Statements of Changes in Equity for the years ended December 31, 2024 and 2023, are as follows:
U.S. Plans
Non-U.S. Plans
Year Ended December 31,
Year Ended December 31,
(In millions)
2024
2023
2024
2023
Actuarial (gain) loss
$
(4)
$
50
$
(4)
$
13
Deferred taxes
2
(11)
2
(4)
Currency/other
—
—
(1)
2
Reclassification to net income
—
1
—
1
Settlements
(4)
—
(1)
(1)
$
(6)
$
40
$
(4)
$
11
Actuarial loss for the year ended December 31, 2024 is primarily related to a decrease in discount rates partially offset by an increase in return on assets.
Actuarial gains and losses are amortized using the 10% corridor approach representing 10% times the greater of plan assets or the projected benefit obligation.
Generally, the expected return is determined using a market-related
62
value of assets where gains (losses) are recognized in a systematic manner over five years. For less significant plans, fair value is used.
Benefit payments, which reflect expected future service, are expected to be paid by the Company plans as follows:
(In millions)
U.S. Plans
Non-U.S. Plans
2025
$
39
$
8
2026
40
7
2027
40
8
2028
41
10
2029
41
10
Years 2030 - 2034
210
55
During the year ended December 31, 2024, cash contributions to the Company's defined benefit plans were $19 million related to its U.S. plans and $7 million
related to its non-U.S. plans. Additionally, the Company expects to make contributions to its US and non-US defined benefit pension plans of $4 million and
$8 million, respectively during 2025.
Substantially all of the Company’s defined benefit pension plan assets are managed by external investment managers and held in trust by third-party
custodians. The selection and oversight of these external service providers is the responsibility of the investment committees of the Company and their
advisers. The selection of specific securities is at the discretion of the investment manager and is subject to the provisions set forth by written investment
management agreements and related policy guidelines regarding permissible investments, risk management practices, and the use of derivative securities.
Derivative securities may be used by investment managers as efficient substitutes for traditional securities, to reduce portfolio risks, or to hedge identifiable
economic exposures. The use of derivative securities to engage in unrelated speculation is expressly prohibited.
The primary objective of the pension funds is to pay the plans’ benefit and expense obligations when due. Given the long-term nature of these plan obligations
and their sensitivity to interest rates, the investment strategy is intended to improve the funded status of its U.S. and non-U.S. plans over time while
maintaining a prudent level of risk. Risk is managed primarily by diversifying each plan’s target asset allocation across equity, fixed income securities, and
alternative investment strategies, and then maintaining the allocation within a specified range of its target. In addition, diversification across various investment
subcategories within each plan is also maintained within specified ranges.
The Company’s retirement plan asset allocation as of December 31, 2024 and 2023 and target allocation for 2025 are as follows:
Target Allocation
Percentage of Plan Assets
U.S.
Non-U.S.
U.S.
Non-U.S.
2025
2025
2024
2023
2024
2023
Equity securities
38 %
13 %
37 %
30 %
14 %
10 %
Fixed income
28 %
65 %
12 %
17 %
64 %
65 %
Alternative strategies
33 %
— %
48 %
51 %
8 %
11 %
Cash
1 %
2 %
3 %
2 %
3 %
3 %
Other
— %
20 %
— %
— %
11 %
11 %
100 %
100 %
100 %
100 %
100 %
100 %
The expected long-term rate of return for defined benefit pension plan assets was selected based on various inputs, including returns projected by various
external sources for the different asset classes held by and to be held by the Company’s trusts and its targeted asset allocation. These projections incorporate
both historical returns and forward-looking views regarding capital market returns, inflation, and other variables. Pension plan assets are valued at fair value
using various inputs and valuation techniques. A description of the inputs and valuation techniques used to measure the fair value for each class of plan assets is
included in Note 17, "Fair Value Measurements."
63
Discount Rate for Estimated Service and Interest Cost
The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain
non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the
applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is
based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected
benefit payments for each plan at its annual measurement date. The Company used discount rates ranging from 2% to 11% to determine its pension and other
benefit obligations as of December 31, 2024.
Defined Contribution Plans
Most U.S. salaried employees and certain non-U.S. employees are eligible to participate in defined contribution plans by contributing a portion of their
compensation which is partially matched by the Company. Matching contributions for the U.S. defined contribution plan are 100% on the first 6% of pay
contributed. The expense related to all defined contribution plans was approximately $6 million in 2024, $6 million in 2023, and $3 million in 2022.
NOTE 13. Stock-Based Compensation
At the Company’s annual meeting of shareholders in June 2020, the shareholders approved the Visteon Corporation 2020 Incentive Plan (the “2020 Incentive
Plan”), replacing the 2010 stock incentive plan and providing for an additional grant of up to 1.5 million shares. During the year ended December 31, 2024, the
Company registered to provide an additional 1.3 million shares to the 2020 Incentive Plan. Pursuant to the 2020 Incentive Plan, the Company may grant shares
of common stock for restricted stock awards (“RSAs”), restricted stock units (“RSUs”), non-qualified stock options ("Stock Options"), stock appreciation
rights (“SARs”), performance-based share units ("PSUs"), and other stock-based awards. The Company's stock-based compensation instruments are accounted
for as equity awards or liability awards based on settlement intention as follows:
•
For equity settled stock-based compensation instruments, compensation cost is measured based on grant date fair value of the award and is recognized
over the applicable service period. For equity settled stock-based compensation instruments, the delivery of Company shares may be on a gross
settlement basis or a net settlement basis. The Company's policy is to deliver such shares using treasury shares or issuing new shares.
•
Cash settled stock-based compensation instruments are subject to liability accounting. At the end of each reporting period, the vested portion of the
obligation for cash settled stock-based compensation instruments is adjusted to fair value based on the period-ending market prices of the Company's
common stock. Related compensation expense is recognized based on changes to the fair value over the applicable service period.
Generally, the Company's stock-based compensation instruments are subject to graded vesting and recognized on an accelerated basis. The settlement intention
of the awards is at the discretion of the Organization and Compensation Committee of the Company's Board of Directors. These stock-based compensation
awards generally provide for accelerated vesting upon a change-in-control, as defined in the 2020 Incentive Plan, which requires a double-trigger (which would
require that the executive's employment terminate without "cause" or for "good reason" following a change in control). Accordingly, the Company may be
required to accelerate recognition of related expenses in future periods in connection with the change-in-control events and subsequent changes in employee
responsibilities, if any.
64
The total recognized and unrecognized stock-based compensation expense is as follows:
Year Ended December 31,
Unrecognized Stock-Based
Compensation Expense
(In millions)
2024
2023
2022
December 31, 2024
Performance based share units
$
11
$
9
$
7
$
15
Restricted stock units
31
27
20
24
Stock options
—
—
—
—
Total stock-based compensation expense
$
42
$
36
$
27
$
39
Performance Based Share Units
The number of PSUs that will vest, ranging from 0% to 200% of the target award, is based on the Company's achievement of a pre-established relative total
shareholder return goal compared to its peer group of companies over a three-year period.
A summary of PSU activity is provided below:
PSUs
Weighted Average Grant
Date Fair Value
(In thousands)
Non-vested as of December 31, 2021
168
$
112.24
Granted
98
164.24
Vested
(86)
115.70
Forfeited
(8)
141.76
Non-vested as of December 31, 2022
172
128.28
Granted
131
230.65
Vested
(137)
84.52
Forfeited
(7)
185.07
Non-vested as of December 31, 2023
159
184.67
Granted
98
140.39
Vested
(47)
148.85
Forfeited
(2)
175.48
Non-vested as of December 31, 2024
208
$
171.36
The grant date fair value for PSUs was determined using the Monte Carlo valuation model. Unrecognized compensation expense as of December 31, 2024 for
PSUs to be settled in shares of the Company's common stock was $15 million and will be recognized over the remaining vesting period of approximately 1.8
years. The Company made cash settlement payments of less than $1 million for PSUs settled in cash during each of the years ended December 31, 2024, 2023,
and 2022. Unrecognized compensation expense as of December 31, 2024 was less than $1 million for the non-vested portion of these awards and will be
recognized over the remaining vesting period of approximately 1.9 years.
The Monte Carlo valuation model requires management to make various assumptions including the expected volatility, risk-free interest rate, and dividend
yield. Volatility is based on the Company’s stock history using daily stock prices over a period commensurate with the expected life of the award. The risk-free
rate was based on the U.S. Treasury yield curve in relation to the contractual life of the stock-based compensation instrument. The dividend yield was based on
historical patterns and future expectations for Company dividends.
65
Weighted average assumptions used to estimate the fair value of PSUs granted during the years ended as of December 31, 2024 and 2023 are as follows:
Year Ended December 31,
2024
2023
Expected volatility
41.71 %
51.72 %
Risk-free rate
4.27 %
4.56 %
Expected dividend yield
— %
— %
Restricted Stock Units
The grant date fair value of RSUs is measured as the market closing price of the Company's common stock on the date of grant. These awards generally vest in
one-third increments on the grant date anniversary over a three-year vesting period.
Share-Settled RSUs for the Year Ended December 31,
2024
2023
2022
Granted
309,000
221,000
276,000
Weighted average grant date fair value
$110.33
$159.95
$114.17
Unrecognized compensation expense as of December 31, 2024 was $22 million for non-vested share-settled RSUs and will be recognized over the remaining
vesting period of approximately 1.5 years.
Cash-Settled RSUs for the Year Ended December 31,
2024
2023
2022
Granted
23,000
15,000
17,000
Weighted average grant date fair value
$89.54
$125.30
$130.47
The Company made cash settlement payments of $1 million during the year ended December 31, 2024, $1 million during the year ended December 31, 2023,
and less than $1 million for the years ended December 31, 2022. Unrecognized compensation expense as of December 31, 2024 was $2 million for non-vested
cash settled RSUs and will be recognized on a weighted average basis over the remaining vesting period of approximately 1.7 years.
A summary of RSU activity is provided below:
RSUs
Weighted Average Grant Date
Fair Value
(In thousands)
Unissued shares as of December 31, 2021
285
$
97.68
Granted
293
115.13
Vested
(171)
91.48
Forfeited
(52)
107.10
Unissued shares as of December 31, 2022
355
113.41
Granted
236
157.81
Vested
(161)
107.89
Forfeited
(45)
136.95
Unissued shares as of December 31, 2023
385
139.35
Granted
331
108.92
Vested
(178)
134.06
Forfeited
(45)
126.62
Unissued shares as of December 31, 2024
493
$
121.26
Beginning in the third quarter 2020, non-employee director RSU awards were granted under the terms and conditions of the 2020 Incentive Plan, and these
awards vest approximately one year from the date of grant. Activity related to non-employee director grants under the 2020 Incentive Plan is included in RSU
table above.
66
Additionally, as of December 31, 2024, the Company has approximately 95,000 outstanding RSU's awarded at a weighted average grant date fair value of
$100.52 under the Non-Employee Director Stock Unit Plan which vest within one year or less but are not settled until the participant terminates board service.
Total RSU's outstanding as of December 31, 2024 is approximately 588,000 inclusive of the table above.
67
Stock Options and Stock Appreciation Rights
Stock Options and SARs are recorded with an exercise price equal to the average of the high and low market price of the Company's common stock on the date
of grant. The grant date fair value of these awards is measured using the Black-Scholes option pricing model. Stock Options and SARs generally vest in one-
third increments on the grant date anniversary over a three-year vesting period and have an expiration date 7 or 10 years from the date of grant.
The Company received payments of less than $1 million, $6 million, and $2 million related to the exercise of Stock Options with total intrinsic value of options
exercised of less than $1 million, $4 million, and $3 million during the years ended December 31, 2024, 2023, and 2022, respectively. There is no remaining
unrecognized compensation expense for Stock Options as of December 31, 2024.
The Black-Scholes option pricing model requires management to make various assumptions including the expected term, risk-free interest rate, dividend yield,
and expected volatility. The expected term represents the period of time that granted awards are expected to be outstanding and is estimated based on
considerations including the vesting period, contractual term, and anticipated employee exercise patterns. The risk-free rate is based on the U.S. Treasury yield
curve in relation to the contractual life of the stock-based compensation instrument. The dividend yield is based on historical patterns and future expectations
for Company dividends. Volatility is based on the Company’s stock history using daily stock prices over a period commensurate with the expected life of the
award.
No stock options or SARs were granted in 2024, 2023 or 2022. There are no SARs outstanding as of the years ended December 31, 2024, 2023 or 2022.
A summary of Stock Options activity is provided below:
Stock Options
Weighted Average
Exercise Price
(In thousands)
December 31, 2021
312
$
85.56
Exercised
(51)
75.05
December 31, 2022
261
87.62
Exercised
(71)
91.44
December 31, 2023
190
86.21
Exercised
(2)
66.98
December 31, 2024
188
$
86.42
Exercisable at December 31, 2024
188
$
86.42
Stock Options
Exercise Price
Number Outstanding
Weighted
Average
Remaining Life
Weighted
Average
Exercise Price
(In thousands)
(In years)
$60.01 - $80.00
76
2.3
$
66.98
$80.01 - $100.00
64
1.3
$
80.97
$100.01 - $130.00
48
0.3
$
124.35
188
68
NOTE 14. Income Taxes
Income Tax Provision
Details of the Company's income tax provision for (benefit from) continuing operations are provided in the table below:
Year Ended December 31,
(In millions)
2024
2023
2022
Income (Loss) Before Income Taxes: (a)
U.S.
$
32
$
8
$
50
Non-U.S.
269
259
126
Total income (loss) before income taxes
$
301
$
267
$
176
Current Tax Provision (Benefit):
Non-U.S.
$
77
$
73
$
45
U.S. state and local
1
—
1
Total current tax provision (benefit)
78
73
46
Deferred Tax Provision (Benefit):
U.S. federal
$
(40)
$
(300)
$
—
Non-U.S
(15)
(8)
(1)
U.S. state and local
(9)
(13)
—
Total deferred tax provision (benefit)
(64)
(321)
(1)
Provision for (benefit from) income taxes
$
14
$
(248)
$
45
(a) Income (loss) before income taxes excludes equity in net income from non-consolidated affiliates.
The provision for (benefit from) income taxes resulted in an effective tax rate of approximately 5%, -93%, and 26% for the years ended December 31, 2024,
2023 and 2022, respectively.
The table below provides a reconciliation of income tax based on the U.S. statutory tax rate of 21% to the final provision for (benefit from) income taxes.
Year Ended December 31,
(In millions)
2024
Effective rate
2023 (a)
Effective rate
2022 (a)
Effective rate
Tax provision (benefit) at U.S. statutory rate of 21%
$
63
21 %
$
56
21 %
$
37
21 %
Foreign rate differential
18
6 %
20
8 %
7
4 %
U.S. tax on foreign operations
(24)
(8)%
24
9 %
15
9 %
Non-U.S withholding taxes
15
5 %
17
6 %
9
5 %
Tax holidays and incentives in foreign operations
(15)
(5)%
(22)
(8)%
(14)
(8)%
Foreign derived intangible income deduction
(14)
(5)%
(4)
(2)%
—
— %
State and local income taxes
(4)
(1)%
(3)
(1)%
(2)
(1)%
Tax reserve adjustments
1
— %
3
1 %
3
2 %
Change in valuation allowance
(25)
(8)%
(377)
(141)%
(61)
(35)%
Impact of U.S. tax amendments
—
— %
39
15 %
44
25 %
Research credits
(3)
(1)%
(3)
(1)%
(1)
(1)%
Other
2
1 %
2
— %
8
5 %
Provision for (benefit from) income taxes
$
14
5 %
$
(248)
(93)%
$
45
26 %
(a) 2022 and 2023 amounts updated for consistency with current year presentation.
The Company's tax rate is affected by the tax laws and rates in the U.S. and other countries where it operates. It also depends on the amount of income earned
in each jurisdiction and the extent of losses or income for which no tax benefit or expense was recognized due to a valuation allowance.
69
The U.S. tax on earnings includes the impact of income taxes on foreign source income, such as foreign branch earnings, net of applicable foreign tax credits in
various categories (general, foreign branch, global intangible low-tax income (GILTI) and passive). It also considers the estimated impact of unrecognized
currency gains and losses in branch operations under final regulations of Internal Revenue Code Section 987. The Company's benefit from foreign derived
intangible income (FDII) depends on its annual U.S. taxable income, which is influenced by U.S. tax regulations requiring the capitalization of research and
development costs in the current period which also impacts the GILTI calculation. U.S. tax amendments primarily involve adjusting prior year tax returns to
deduct foreign taxes before expiration, while the foreign rate differential reflects tax expense on foreign earnings taxed at rates higher than the U.S. statutory
rate.
The Company’s effective tax rate is also impacted by net changes to valuation allowances, where the Company has determined that it is more-likely-than-not
that certain deferred tax assets would not be realized. For the years ended December 31, 2024, 2023, and 2022, the Company recorded net benefits related to
valuation allowances of $25 million, $377 million, and $61 million, respectively (discussed in further detail below).
Deferred income taxes represent temporary differences in the recognition of certain items for financial reporting and income tax purposes. A summary of the
components of deferred income tax assets and liabilities are as follows:
December 31,
(In millions)
2024
2023
Deferred Tax Assets:
Net operating losses and credit carryforwards
$
884
$
944
Employee benefit plans
26
39
Lease liability
36
38
Fixed assets and intangibles
15
16
Warranty
16
15
Inventory
12
12
Restructuring
5
2
Capitalized expenditures
152
107
Deferred income
8
6
Other
84
73
Gross deferred tax assets
1,238
1,252
Valuation allowance
(702)
(754)
Total deferred tax assets
$
536
$
498
Deferred Tax Liabilities:
Outside basis investment differences, including withholding tax
$
62
$
66
Right-of-use assets
34
37
Fixed assets and intangibles
23
14
All other
19
28
Total deferred tax liabilities
138
145
Net deferred tax assets
$
398
$
353
Consolidated Balance Sheet Classification:
Other non-current assets
$
441
$
384
Deferred tax liabilities non-current
43
31
Net deferred tax assets
$
398
$
353
As of December 31, 2024, the Company had available pretax non-U.S. net operating loss carryforwards and capital loss carryforwards of $1.2 billion and $16
million, respectively, $275 million of which expire at various dates from 2025 through 2043, and $1 billion of which have an indefinite life.
The Company had available pretax U.S. federal net operating loss carryforwards of $1 billion at December 31, 2024, which have remaining carryforward
periods ranging from 5 years to 10 years. U.S. foreign tax credit carryforwards are $294 million million at December 31, 2024, which have remaining
carryforward periods ranging from 1 to 10 years. U.S. research tax credit carryforwards are $29 million at December 31, 2024. These credits will begin to
expire in 2031. The Company had available
70
post-apportionment tax-effected U.S. state operating loss carryforwards of $31 million at December 31, 2024, $27 million which will expire at various dates
between 2025 and 2044, and $4 million of which have an indefinite life.
In connection with the Company's emergence from bankruptcy and resulting change in ownership on the Effective Date, an annual limitation was imposed on
the utilization of U.S. net operating losses, U.S. credit carryforwards and certain U.S. built-in losses (collectively referred to as “tax attributes”) under Internal
Revenue Code (“IRC”) Sections 382 and 383. The collective limitation is approximately $121 million per year on tax attributes in existence at the date of
change in ownership.
As of December 31, 2024 and 2023, the valuation allowance with respect to the Company's deferred tax assets was $702 million and $754 million, respectively,
a net decrease of $52 million.
The Company provides a valuation allowance for its deferred tax assets when it is more likely than not that some portion, or all, of its deferred tax assets will
not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the appropriate character in the
respective jurisdiction. The Company considers all available positive and negative evidence and makes certain assumptions in evaluating the realizability of its
deferred tax assets.
The Company historically provided a valuation allowance against its U.S. net deferred tax assets prior to 2023. However, as the Company continued to improve
its earnings, the Company concluded that the positive evidence, which included its forecast of future taxable income using its objective and verifiable earnings
history, outweighed the negative evidence (the Company’s history of losses) indicating that it was more likely than not that the Company would be able to
realize a benefit for a substantial portion of its U.S. deferred tax assets, resulting in a $313 million partial release of its valuation allowance related to its U.S.
deferred tax assets as of December 31, 2023.
As of December 31, 2024, after considering all positive and negative evidence, including improvement in the Company’s U.S. profitability beyond the
projections utilized in estimating the realizability of its U.S. deferred tax assets in 2023, the Company concluded that additional U.S. deferred income tax assets
were more likely than not to be realized resulting in a $49 million non-cash benefit to income tax expense in 2024. The deferred tax assets not expected to be
realized based on the Company’s projections relate primarily to the Company’s existing foreign tax credit carryforwards, as the Company has been and is
expected to continue to generate excess credits in the near term, resulting in an inability to use all of its existing credits prior to their expiration dates; certain
U.S. federal net operating loss carryforwards that were not expected to provide an incremental cash savings (i.e., they would only displace credits and
deductions the Company would have otherwise had available to it); and State operating loss carryforwards with a limited carryforward. Accordingly, the
Company continues to maintain a U.S. valuation allowance of $386 million as of December 31, 2024.
During the third quarter of 2024, the Company reassessed the future utilization of its deferred tax assets in Germany primarily as a result of the Company's
German Acquisition which will be combined with the Company's existing German consolidated tax group. The increase in projected taxable income resulted in
the Company recording a $7 million income tax benefit.
As of December 31, 2024, valuation allowances totaling $316 million relate to deferred tax assets in certain foreign jurisdictions, primarily Germany and
France.
The Company will continue to evaluate the available positive and negative evidence in subsequent periods and adjust its remaining valuation allowances to the
amount it determines to be more likely than not to be realized. If operating results improve or deteriorate on a sustained basis, the Company’s conclusions
regarding the need for a valuation allowance could change, resulting in either the reversal or initial recognition of a valuation allowance in the future, which
could have a significant impact on income tax expense in the period recognized and subsequent periods.
The Company has recorded the taxes associated with the foreign earnings it intends to repatriate in the future. The amount the Company expects to repatriate is
based upon a variety of factors including current year earnings of the foreign affiliates, foreign investment needs, and the cash flow needs of the Company. As
of December 31, 2024 and 2023, the Company has recorded withholding tax liabilities of $27 million and $28 million, respectively related to these earnings.
These earnings are expected to be non-taxable upon repatriation to the U.S., as they will largely be considered previously taxed income under the one-time
transition tax or GILTI, or they will be offset by a 100% dividend received deduction. The Company has not provided for deferred tax liabilities for foreign
withholding or other taxes on the remainder of undistributed earnings because such earnings are considered to be permanently reinvested. It is not practicable
to determine the amount of deferred tax liability on such earnings as the actual tax liability, if any, is dependent on circumstances existing when remittance
occurs.
71
The Company is subject to the OECD's Pillar Two rules, mandating a minimum effective tax rate of 15% on global income. Although it is uncertain if the U.S.
will adopt Pillar Two, the Company operates in several jurisdictions that have enacted these rules, with others in the process of doing so. The Company has
assessed its potential exposure to top-up taxes and found the impact on its 2024 effective tax rate to be immaterial. The Company will continue to monitor the
implementation of these rules and may need to adjust its estimates and tax strategies to ensure compliance.
Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Year Ended December 31,
(In millions)
2024
2023
Beginning balance
$
25
$
18
Tax positions related to current period
Additions
2
8
Tax positions related to prior periods
Reductions
(7)
(1)
Ending balance
$
20
$
25
Gross unrecognized tax benefits at December 31, 2024 and 2023 were $20 million and $25 million, respectively. Of these amounts, approximately $20 million
and $18 million respectively, represent the amount of unrecognized benefits that, if recognized, would impact the effective tax rate. The Company records
interest and penalties related to uncertain tax positions as a component of income tax expense and related amounts accrued as of December 31, 2024 and 2023
were $3 million and $2 million, respectively.
With few exceptions, the Company is no longer subject to U.S. federal tax examinations for years before 2016, or state, local or non-U.S. income tax
examinations for years before 2003, although U.S. net operating losses carried forward into open tax years technically remain open to adjustment. Although it
is not possible to predict the timing of the resolution of all ongoing tax audits with accuracy, it is reasonably possible that certain tax proceedings in the U.S.,
Europe, Asia and Mexico could conclude within the next twelve months and result in an increase or decrease in the balance of gross unrecognized tax benefits.
Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the full range of possible adjustments to the
balance of unrecognized tax benefits. The long-term portion of uncertain income tax positions (including interest) in the amount of $15 million is included in
Other non-current liabilities on the consolidated balance sheet, and $7 million is reflected as a reduction of deferred tax assets included in Other non-current
assets. Outstanding income tax refund claims related primarily to India and Brazil jurisdictions total $4 million as of December 31, 2024, and are included in
other non-current assets on the balance sheets.
Other Tax Matters
In January 2023, the Company received a decision by the Indian Tax Authority (“ITA”) that tax applies to certain IT-related services fees paid to the U.S. which
spans several years. Until this matter is resolved, the Company will likely need to remit taxes on the services in question for which payments could be
significant in the aggregate. The Company believes the ITA’s decision is without merit, and intends to defend its position vigorously, and expects to recoup any
taxes paid. If this matter is adversely resolved, the Company would record additional tax expense, which would include any taxes ultimately paid.
NOTE 15. Stockholders’ Equity and Non-controlling Interests
Treasury Stock
As of December 31, 2024 and 2023, respectively, the Company held 27,860,349 and 27,354,274 shares of common stock in treasury which may be used for
satisfying obligations under employee incentive compensation arrangements. The Company values shares of common stock held in treasury at cost.
72
Non-Controlling Interests
Non-controlling interests in Visteon Corporation are as follows:
December 31,
(In millions)
2024
2023
Shanghai Visteon Automotive Electronics Co., Ltd.
$
55
$
51
Yanfeng Visteon Automotive Electronics Co., Ltd.
13
18
Changchun Visteon FAWAY Automotive Electronics Co., Ltd.
12
14
Other
1
2
$
81
$
85
During the year ended December 31, 2024, the Company paid approximately $1 million to buy all of the shares of a minority joint venture partner in Tunisia.
73
Accumulated Other Comprehensive Income (Loss)
Changes in AOCI and reclassifications out of AOCI by component includes:
Year Ended December 31,
(In millions)
2024
2023
Changes in AOCI:
Beginning balance
$
(254)
$
(213)
Other comprehensive income (loss) before reclassification, net of tax
(64)
(51)
Amounts reclassified from AOCI
12
10
Ending balance
$
(306)
$
(254)
Changes in AOCI by component:
Foreign currency translation adjustments
Beginning balance
$
(192)
$
(210)
Other comprehensive income (loss) before reclassification
(74)
18
Amounts reclassified from AOCI
—
—
Ending balance
(266)
(192)
Net investment hedge
Beginning balance
5
12
Other comprehensive income (loss) before reclassification
13
(7)
Amounts reclassified from AOCI
—
—
Ending balance
18
5
Benefit plans
Beginning balance
(76)
(25)
Other comprehensive income (loss) before reclassification, net of tax
10
(49)
Amounts reclassified from AOCI
—
(2)
Ending balance
(66)
(76)
Unrealized hedging gain (loss)
Beginning balance
9
10
Other comprehensive income (loss) before reclassification, net of tax
(13)
(13)
Amounts reclassified from AOCI
12
12
Ending balance
8
9
AOCI ending balance
$
(306)
$
(254)
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.
Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. During the
year ended December 31, 2024, the Company has purchased 647,755 shares at an average price of $97.97 related to this program. As of December 31, 2024,
the Company has $131 million of authorized purchases of common stock remaining. Excise taxes incurred due to purchases under the program totaled less than
$1 million for the year ended December 31, 2024.
74
NOTE 16. Earnings Per Share
A summary of information used to compute basic and diluted earnings per share attributable to Visteon is as follows:
Year Ended December 31,
(In millions, except per share amounts)
2024
2023
2022
Numerator:
Net income (loss) attributable to Visteon
$
274
$
486
$
124
Denominator:
Average common stock outstanding - basic
27.6
28.1
28.1
Dilutive effect of performance-based share units and other
0.3
0.4
0.4
Diluted shares
27.9
28.5
28.5
Basic and Diluted Per Share Data:
Basic earnings (loss) per share attributable to Visteon:
$
9.93
$
17.30
$
4.41
Diluted earnings (loss) per share attributable to Visteon:
$
9.82
$
17.05
$
4.35
NOTE 17. Fair Value Measurements
Fair Value Hierarchy
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.
Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy but are
included in the total assets for reporting and reconciliation purposes.
75
The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis are as follows:
December 31, 2024
(In millions)
Level 1
Level 2
Level 3
NAV
Total
Asset Category:
Retirement plan assets
$
121
$
56
$
18
$
434
$
629
Interest rate swaps
$
—
$
8
$
—
$
—
$
8
Liability Category:
Cross currency swaps
$
—
$
1
$
—
$
—
$
1
December 31, 2023
(In millions)
Level 1
Level 2
Level 3
NAV
Total
Asset Category:
Retirement plan assets
$
93
$
112
$
19
$
457
$
681
Interest rate swaps
$
—
$
7
— —
7 $
7
Liability Category:
Cross currency swaps
$
—
$
15
$
—
$
—
$
15
Cross currency swaps and interest rate swaps are valued 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, can be derived from observable data, or are supported by observable levels at which transactions are
executed in the marketplace. The carrying amounts of all other non-retirement plan financial instruments approximate their fair values due to their relatively
short-term maturities.
Retirement plan assets pertain to a diverse set of securities and investment vehicles held by the Company’s defined benefit pension plans. These assets possess
varying fair value measurement attributes such that certain portions are categorized within each level of the fair value hierarchy as based upon the level of
observability of the inputs utilized in the valuation of the particular asset. The Company may, as a practical expedient, estimate the fair value of certain
investments using NAV of the investment as of the reporting date. This practical expedient generally deals with investments that permit an investor to redeem
its investment directly with, or receive distributions from, the investee at times specified in the investee’s governing documents. Examples of these investments
(often referred to as alternative investments) may include ownership interests in real assets, certain credit strategies, and hedging and diversifying strategies.
They are commonly in the form of limited partnership interests. The Company uses NAV as a practical expedient when valuing investments in alternative asset
classes and funds which are a limited partnership or similar investment vehicle.
Derivative financial instruments
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 instruments are classified as Level 2, "Other Observable Inputs" in the fair value hierarchy.
Retirement Plan Assets
Retirement plan assets consist of the following:
•
Cash and cash equivalents, are immediately available or are highly liquid and not subject to significant market risk. Assets comprised of cash, short-
term sovereign debt, or high credit-quality money market securities and instruments held directly by the plan are categorized as Level 1. Assets in a
short-term investment fund ("STIF") are categorized as Level 2. Cash and cash equivalent assets denominated in currencies other than the U.S. dollar
are reflected in U.S. dollar terms at the exchange rate prevailing at the balance sheet dates.
•
Treasury and government securities consist of debt securities issued by the U.S. and non-U.S. sovereign governments and agencies, thereof. Assets
with a high degree of liquidity and frequent trading activity are categorized as Level 1
76
while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are
categorized as Level 2.
•
Corporate debt securities consist of fixed income securities issued by corporations. Assets with a high degree of liquidity and frequent trading activity
are categorized as Level 2 while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-
income securities and are categorized as Level 2.
•
Bond funds are comprised of corporate and municipal bonds. These securities are generally priced by independent pricing services. The spreads are
sourced from broker/dealers, trade prices and the new issue market. As the significant inputs used to price corporate bonds are observable market
inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy.
•
Common and preferred stocks consist of shares of equity securities. These are directly-held assets that are generally publicly traded in regulated
markets that provide readily available market prices and are categorized as Level 1.
•
Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds, including
equities and fixed income securities, are generally publicly traded in regulated markets that provide readily available market prices. The entire balance
of an investment in a common trust fund that does not have a readily observable market prices as available on a third-party information source,
notwithstanding whether the investment has daily liquidity, is categorized as Level 2; or the fund is considered as an alternative strategy (including
hedge and diversifying strategies) for which valuation is established by NAV as a practical expedient.
•
Liability Driven Investments (“LDI”) utilizes certain funds that invest in instruments and securities, interest-rate swaps and other financial derivative
instruments intended to hedge a portion of the changes in pension liabilities associated with changes in the actuarial discount rate as applied to the
plan’s liabilities. The valuation methodology of the funds that invest in fixed income derivative instruments, the assets contained in this category
utilize standard pricing models associated with fixed income derivative instruments and are categorized as Level 2.
•
Repurchase agreements represent the plans’ short-term borrowing to hedge against interest rate and inflation risks. The plans have an obligation to
return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation
approximates fair value. These borrowings are categorized as Level 2.
•
Other investment funds include funds that hold various short-term, real-estate related, and fixed income assets and are categorized as Level 1, Level 2,
and NAV, consistent with the valuation techniques of investment funds described above.
•
Limited partnerships and hedge funds represent investment vehicles with underlying exposures in alternative credit, hedge and diversifying strategies
(including hedge fund of funds), real assets, and certain equity exposures. The underlying assets in these funds may include securities transacted in
active markets as well as other assets that have values less readily observable and may require valuation techniques that require inputs that are not
readily observable. Investment in these funds may be subject to a specific notice period prior to the intended transaction date. In addition, transactions
in these funds may require longer settlement terms than traditional mutual funds. These assets are valued based on their respective NAV as a practical
expedient to estimate fair value due to the absence of readily available market prices.
•
Insurance contracts are reported at cash surrender value and have significant unobservable inputs and are categorized as Level 3.
77
The fair values of the Company’s U.S. retirement plan assets are as follows:
(In millions)
December 31, 2024
Asset Category
Level 1
Level 2
NAV
Total
Common trust funds
$
—
$
—
$
310
$
310
LDI
—
56
—
56
Limited partnerships and hedge funds
—
—
89
89
Cash and cash equivalents
—
17
—
17
Total
$
—
$
73
$
399
$
472
(In millions)
December 31, 2023
Asset Category
Level 1
Level 2
NAV
Total
Common trust funds
$
—
$
—
$
308
$
308
LDI
—
88
—
88
Limited partnerships and hedge funds
—
—
105
105
Cash and cash equivalents
—
8
—
8
Total
$
—
$
96
$
413
$
509
The fair values of the Company’s Non-U.S. retirement plan assets are as follows:
(In millions)
December 31, 2024
Asset Category
Level 1
Level 2
Level 3
NAV
Total
Treasury and government securities
$
114
$
10
$
—
$
—
$
124
Insurance contracts
—
—
18
—
18
Bond funds
—
16
—
—
16
Limited partnerships
—
—
—
12
12
Corporate debt securities
—
6
—
—
6
Common and preferred stock
3
—
—
—
3
Common trust funds
—
—
—
—
—
Cash and cash equivalents
1
—
—
—
1
Repurchase agreements
—
(67)
—
—
(67)
Other investment funds
3
18
—
23
44
Total
$
121
$
(17)
$
18
$
35
$
157
(In millions)
December 31, 2023
Asset Category
Level 1
Level 2
Level 3
NAV
Total
Treasury and government securities
$
85
$
10
$
—
$
—
$
95
Bond funds
—
24
—
—
24
Insurance contracts
—
—
19
—
19
Limited partnerships
—
—
—
11
11
Corporate debt securities
—
9
—
—
9
Common and preferred stock
3
—
—
—
3
Common trust funds
—
1
—
—
1
Cash and cash equivalents
1
—
—
—
1
Repurchase agreements
—
(41)
—
—
(41)
Other investment funds
4
13
—
33
50
Total
$
93
$
16
$
19
$
44
$
172
78
Items Measured at Fair Value on a Non-recurring Basis
The Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring
fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value
hierarchy.
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.
No impairment charges were recorded for the years ended December 31, 2024 and 2023.
In 2022, due to the geopolitical situation in Eastern Europe, the Company closed the Russian facility resulting in a non-cash impairment charge of $5 million to
fully impair property and equipment and reduce inventory to its net realizable value.
Fair Value of Debt
The fair value of debt was $319 million and $328 million as of December 31, 2024 and 2023, respectively. Fair value estimates were based on quoted market
prices or current rates for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Accordingly, the
Company's debt is classified as Level 1 "Market Prices" and Level 2 "Other Observable Inputs" in the fair value hierarchy.
NOTE 18. Financial Instruments
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.
Foreign Currency Exchange Rate Risk
The maximum length of time over which the Company hedges forecasted transactions related to variable interest payments is the term of the underlying debt.
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 Consolidated
Balance Sheet.
As of December 31, 2024 and 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 December 31, 2024 and 2023. The fair value of these derivatives is a non-current liability of $1 millions
and $15 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024, a loss of approximately $3 million is expected to be reclassified
out of accumulated other comprehensive income into earnings within the next 12 months.
Interest Rate Swaps: The Company utilizes interest rate swap instruments to manage its exposure and to mitigate the impact of interest rate variability. The
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.
79
As of December 31, 2024 and 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 $8 million and $7 million as of December 31, 2024 and 2023, respectively. As of December 31, 2024, a gain of approximately $7
million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next 12 months.
Financial Statement Presentation
Gains and losses on derivative financial instruments for the years ended December 31, 2024 and 2023 are as follows:
Amount of Gain (Loss)
Recorded Income (Loss) in
AOCI, net of tax
Reclassified from AOCI into
Income (Loss)
(In millions)
2024
2023
2024
2023
Interest rate risk - Interest expense, net:
Net investment hedges
13
(7)
—
—
Interest rate swap
(13)
(13)
(12)
(12)
$
—
$
(20)
$
(12)
$
(12)
Concentrations of Credit Risk
The following is a summary of the percentage of net sales and accounts receivable from the Company's customers with a percentage of net sales greater than 10
percent:
Percentage of Total Net Sales
Percentage of Total Accounts Receivable
December 31,
December 31,
2024
2023
2022
2024
2023
Ford
23 %
22 %
22 %
12 %
16 %
General Motors
15 %
12 %
9 %
13 %
15 %
NOTE 19. 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 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 was made in two equal
installments, the first on July 3, 2023 and the second on July 1, 2024. The litigation commenced in Michigan’s Wayne County Circuit Court and has been
dismissed with prejudice.
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. As of December 31, 2024, the Company maintained accruals of
approximately $6 million for claims aggregating approximately $42 million in Brazil. The amounts accrued represent claims that are deemed probable of loss
and are reasonably estimable based on the Company's assessment of the claims and prior experience with similar matters.
While the Company believes its accruals for litigation and claims are adequate, the final amounts required to resolve such matters could differ materially from
recorded estimates and the Company's results of operations and cash flows could be materially affected.
80
Product Warranty and Recall
Amounts accrued for product warranty and recall provisions 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. These estimates do not include amounts which may ultimately be recovered from the Company's
suppliers. The Company can provide no assurances that it will not experience material obligations in the future or that it will not incur significant costs to
defend or settle such obligations beyond the amounts accrued or beyond what the Company may recover from its suppliers.
The following table provides a reconciliation of changes in the product warranty and recall liability:
Year Ended December 31,
(In millions)
2024
2023
Beginning balance
$
71
$
51
Provisions
33
32
Change in estimates
2
4
Currency/other
(4)
1
Settlements
(22)
(17)
Ending balance
$
80
$
71
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; customs classifications; governmental regulations relating to safety; employment-
related matters; customer, supplier and other contractual relationships; intellectual property rights; product warranties; product recalls; tax matters, including
the ITA tax matter described in Note 14, "Income Taxes"; and environmental matters. Some of the foregoing matters may involve compensatory, punitive or
antitrust, or other treble damage claims in very large amounts, or demands for recall campaigns, environmental remediation programs, sanctions, or other relief
which, if granted, would require very large expenditures. The Company enters into agreements that contain indemnification provisions in the normal course of
business for which the risks are considered nominal and impracticable to estimate.
Contingencies are subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance. Reserves have been
established by the Company for matters discussed in the immediately foregoing paragraph where losses are deemed probable and reasonably estimable. It is
possible, however, that some of the matters discussed in the foregoing paragraph could be decided unfavorably to the Company and could require the Company
to pay damages or make other expenditures in amounts, or a range of amounts, that cannot be estimated as of December 31, 2024 and that are in excess of
established reserves. Based on its analysis, the Company does not reasonably expect, except as otherwise described herein, 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.
NOTE 20. Segment Information and Revenue Recognition
The Company manages the business activities on a consolidated basis and operates in one reportable segment. The Company’s reportable segment is
Electronics. The Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays,
infotainment systems, audio systems, telematics solutions, battery monitoring systems, and head-up displays. As the Company has one reportable segment, net
sales, total assets, depreciation, amortization and capital expenditures are equal to consolidated results.
Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in
which financial information is evaluated by the Company's Chief Operating Decision Maker ("CODM") in allocating resources and in assessing performance.
The Company’s CODM is the Chief Executive Officer. The measurement of segment profit or loss that the CODM uses to evaluates the performance of the
Company’s segment is net income attributable to Visteon Corporation. Financial forecasts and budget to actual results used by the CODM to assess
performance and allocate resources, as well as those used for strategic decisions related to headcount and capital expenditures
81
are reviewed on a consolidated basis. The CODM considers the impact of the significant segment expenses in the table below on net income when deciding
whether to reinvest profits, propose dividends or share repurchase, or pursue strategic mergers and acquisitions.
A summary of segment revenue, segment net income (loss) attributable to Visteon Corporation, and significant segment expense for the years ended December
31, 2024, 2023 and 2022 is as follows:
Year Ended December 31,
2024
2023
2022
Net sales
3,866
3,954
3,756
Significant expenses:
Other cost of sales
3,039
3,153
3,089
Other selling, general and administrative
175
173
157
Gross engineering costs
334
330
341
Engineering recoveries
(143)
(120)
(145)
Depreciation and amortization
96
104
108
Non-cash stock-based compensation
41
34
26
Restructuring and impairment
32
5
14
Interest expense
15
17
14
Interest income
(17)
(10)
(4)
Equity in net loss of non-consolidated affiliates
3
10
1
Other (income) loss, net
(7)
1
(20)
Provision for (benefit from) income taxes
14
(248)
45
Net income (loss)
284
505
130
Less: Net (income) loss attributable to non-controlling interests
(10)
(19)
(6)
Net income (loss) attributable to Visteon Corporation
$
274
$
486
$
124
Other cost of sales excludes depreciation and amortization, non-cash stock-based compensation, and engineering recoveries which are presented individually
above.
Other selling, general and administrative excludes depreciation and amortization and non-cash stock-based compensation which are presented individually
above.
82
Financial Information by Geographic Region
Financial information about net sales and net tangible long-lived assets by country are as follows:
Net Sales (a)
Tangible Long-Lived Assets, Net (b)
Year Ended December 31,
December 31,
(In millions)
2024
2023
2022
2024
2023
United States
$
1,100
$
882
$
875
$
113
$
105
Mexico
94
109
96
57
54
Total North America
1,194
991
971
170
159
Portugal
875
840
867
122
105
Slovakia
192
352
347
22
29
Tunisia
159
106
69
43
37
Other Europe
8
—
14
24
28
Total Europe
1,234
1,298
1,297
211
199
China Domestic
450
614
625
China Export
260
336
245
Total China
710
950
870
65
67
Japan
331
353
330
25
29
India
291
246
227
63
59
Other Asia-Pacific
96
92
68
10
6
Total Other Asia-Pacific
718
691
625
98
94
South America
150
173
143
8
8
Eliminations
(140)
(149)
(150)
$
3,866
$
3,954
$
3,756
$
552
$
527
(a) Company sales based on geographic region where sale originates and not where customer is located.
(b) Tangible long-lived assets include property, plant, and equipment and right-of-use assets.
Disaggregated revenue by product lines is as follows:
Year Ended December 31,
(In millions)
2024
2023
2022
Product Lines
Instrument clusters
$
1,764 $
1,949 $
1,782
Cockpit domain controller
524
536
473
Infotainment
480
499
498
Information displays
409
367
490
Body and electrification electronics
525
314
225
Other
164
289
288
$
3,866 $
3,954 $
3,756
83
NOTE 21. Other Income, Net
Year Ended December 31,
(In millions)
2024
2023
2022
Pension financing benefits, net
$
11
$
11
$
20
Pension settlement
(4)
—
—
Township settlement
—
(12)
—
$
7
$
(1)
$
20
Pension financing benefits, net include return on assets net of interest costs and other amortization.
The Company incurred settlement losses of $4 million related to an early buyout of individuals in the U.S. defined benefit plan.
During the year ended December 31, 2023, the Company recorded a charge of $12 million in regards to the Charter Township of Van Buren, Michigan
settlement. See Note 19 "Commitments and Contingencies” for more information.
84
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in periodic reports filed with
the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that
such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.
At December 31, 2024, an evaluation was performed under the supervision and with the participation of the Company’s management, including its Chief
Executive and Financial Officers, of the effectiveness of the design and operation of disclosure controls and procedures. Based on that evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2024.
Management's Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Rule 13a-15(f) of
the Exchange Act. Under the supervision and with the participation of the principal executive and financial officers of the Company, an evaluation of the
effectiveness of internal control over financial reporting was conducted based on the framework in Internal Control – Integrated Framework issued by the
Committee of Sponsoring Organizations (“the COSO 2013 Framework”) of the Treadway Commission.
Based on the evaluation performed under the COSO 2013 Framework as of December 31, 2024, management has concluded that the Company’s internal
control over financial reporting is effective. Additionally, Deloitte & Touche LLP, an independent registered public accounting firm, has audited the
effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, as stated in their report which is included herein.
In accordance with guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of internal control over financial
reporting for the first fiscal year in which the acquisition occurred. Management's evaluation of internal control over financial reporting excluded the internal
control activities of the German Acquisition, which we acquired on August 29, 2024, and the other Acquisition, which we acquired on December 3, 2024.
These acquisitions constitute less than 3% of total assets and less than 1% of total revenues of the Company’s consolidated financial statement amounts as of
and for the year ended December 31, 2024. These acquisitions are discussed in Note 2, "Business Acquisitions" of the Notes to Consolidated Financial
Statements in Item 8, Financial Statements and Supplementary Data. The Company will include the Acquisitions in our assessment of the effectiveness of
internal control over financial reporting by year end 2025.
Item 9B.
Other Information
The Company's directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase
or sale of the Company's shares that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading
arrangement under the Exchange Act. During the quarter ended December 31, 2024, no such plans or other arrangements were adopted or terminated.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Part III
85
Item 10.
Directors, Executive Officers and Corporate Governance
Except as set forth herein, the information required by Item 10 regarding the Company's directors is incorporated by reference from the information under the
captions “Item - Election of Directors,” “Corporate Governance,” and “2025 Stockholder Proposals and Nominations” in its 2025 Proxy Statement, which will
be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the Company’s 2024 fiscal year. The information required by Item 10
regarding the Company's executive officers appears as Item 4A under Part I of this Annual Report on Form 10-K.
The Company has a code of ethics, as such phrase is defined in Item 406 of Regulation S-K, that applies to all directors, officers and employees of the
Company and its subsidiaries, including the Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer. The code, entitled “Ethics
and Integrity Policy,” is available on the Company's website at www.visteon.com. The Company intends to notify investors of any amendment to or waiver of
the provisions of the code of ethics applicable to its Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer at the same location on the
Company’s website.
The Company has an insider trading policy governing the purchase, sale, and other disposition of its securities by all directors, officers, and employees as well
as by the Company. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards
applicable to the Company. A copy of our insider trading policy is filed as Exhibit 19 to this Annual Report on Form 10-K.
Item 11.
Executive Compensation
The information required by Item 11 is incorporated by reference from the information under the captions “Compensation Committee Report,” “Executive
Compensation” and “Director Compensation” in its 2025 Proxy Statement, which will be filed with the Securities and Exchange Commission pursuant to
Regulation 14A within 120 days after the end of the Company’s 2024 fiscal year.
86
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 12 is incorporated by reference from the information under the caption “Security Ownership of Certain Beneficial Owners
and Management” in its 2025 Proxy Statement, which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days
after the end of the Company’s 2024 fiscal year.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by Item 13 is incorporated by reference from the information under the captions “Corporate Governance - Director Independence”
and “Transactions with Related Persons” in its 2025 Proxy Statement, which will be filed with the Securities and Exchange Commission pursuant to Regulation
14A within 120 days after the end of the Company’s 2024 fiscal year.
Item 14.
Principal Accountant Fees and Services
The information required by Item 14 is incorporated by reference from the information under the captions “Audit Fees” and “Audit Committee Pre-Approval
Process and Policies” in its 2025 Proxy Statement, which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120
days after the end of the Company’s 2024 fiscal year.
87
Part IV
Item 15.
Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
1. Financial Statements
See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K hereof.
2. Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts
All other financial statement schedules are omitted because they are not required or applicable under instructions contained in Regulation S-X or because the
information called for is shown in the financial statements and notes thereto.
3. Exhibits
The exhibits listed on the "Exhibit Index" on page 90 hereof are filed with this Annual Report on Form 10-K or incorporated by reference as set forth herein.
Item 16. Form 10-K Summary
None.
88
VISTEON CORPORATION AND SUBSIDIARIES
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Balance at
Beginning
of Period
(Benefits)/
Charges to
Income
Other( a)
Balance
at End
of Period
Year Ended December 31, 2024:
Valuation allowance for deferred taxes
754
(25)
(27)
702
Year Ended December 31, 2023:
Valuation allowance for deferred taxes
1,120
(377)
11
754
Year Ended December 31, 2022:
Valuation allowance for deferred taxes
1,207
(61)
(26)
1,120
____________
(a)
Deferred taxes valuation allowance - represents adjustments recorded through other comprehensive income, exchange, expiration of tax attribute
carryforwards, and various tax return true-up adjustments, all of which impact deferred taxes and the related valuation allowances. In 2024, the
$27 million other decrease in the valuation allowance for deferred taxes is primarily related to exchange. In 2023, the $11 million other increase in
the valuation allowance for deferred taxes is comprised of $13 million related to exchange, offset by a decrease of $2 million primarily related to
other comprehensive income. In 2022, the $26 million other decrease in the valuation allowance for deferred taxes is comprised of $15 million related
to exchange and $11 million primarily related to other comprehensive income.
89
Exhibit Index
Exhibit No.
Description
3.1
Third Amended and Restated Certificate of Incorporation of Visteon Corporation (incorporated by reference to Appendix D to
the Definitive Proxy Statement on Schedule 14A of Visteon Corporation filed on April 30, 2021).
3.2
Amended and Restated Bylaws of Visteon Corporation, as amended through June 9, 2016 (incorporated by reference to Exhibit
3.2.a to the Current Report on Form 8-K of Visteon Corporation filed on June 10, 2016).
4.1
Form of Common Stock Certificate of Visteon Corporation (incorporated by reference to Exhibit 4.4 to the Current Report on
Form 8-K of Visteon Corporation filed on October 1, 2010 (File No. 001-15827)).
4.2
Description of Visteon Corporation Securities Registered Under Section 12 of the Exchange Act of 1934 (incorporated by
reference to the Annual Report on Form 10-K of Visteon Corporation filed on February 17, 2022).
10.1
Amended and Restated Employment Agreement, dated October 22,2020, between Visteon Corporation and Sachin Lawande
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon Corporation filed on October 26,
2020).*
10.1.1
Amendment to Employment Agreement, effective as of February 19, 2024, by and between Visteon Corporation and Sachin
Lawande (incorporated by reference to Exhibit 10.1. to the Current Report on Form 8-K of Visteon Corporation filed on
February 20, 2024).*
10.2
Credit Agreement, dated as of April 9, 2014, among Visteon Corporation, each lender from time to time party thereto, each L/C
Issuer from time to time party thereto and Citibank, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K of Visteon Corporation filed on April 14, 2014).
10.2.1
Amendment No. 1, dated as of March 25, 2015, to Credit Agreement, dated as of April 9, 2014, by and among Visteon
Corporation, each lender from time to time party thereto and Citibank, N.A., as administrative agent (incorporated by reference
to Exhibit 10.1 to the Current Report on Form 8-K of Visteon Corporation filed on March 27, 2015).
10.2.2
Amendment No. 2 to Credit Agreement, dated as of March 24, 2017, by and among Visteon Corporation, the guarantors party
thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Visteon Corporation filed on March 27, 2017).
10.2.3
Amendment No. 3 to Credit Agreement, dated as of November 14, 2017, by and among Visteon Corporation, the guarantors
party thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K of Visteon Corporation filed on November 17, 2017).
10.2.4
Amendment No. 4 to Credit Agreement, dated as of May 30, 2018, by and among Visteon Corporation, the guarantors party
thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Visteon Corporation filed on June 1, 2018).
10.2.5
Amendment No. 5 to Credit Agreement, dated as of December 19, 2019, by and among Visteon Corporation, the guarantors party
thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Visteon Corporation filed on December 20, 2019).
10.2.6
Amendment No. 6 to Credit Agreement, dated as of July 19, 2022, by and among Visteon Corporation, the guarantors party
thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K of Visteon Corporation filed on July 22, 2022).
10.3
Visteon Corporation 2020 Incentive Plan, (incorporated by reference to Appendix C to the Definitive Proxy Statement on
Schedule 14A of Visteon Corporation filed on April 23, 2020).*
10.3.1
Form of Performance Stock Unit Grant Agreement (2024) under the Visteon Corporation 2020 Incentive Plan.*
10.3.2
Form of Restricted Stock Unit Grant Agreement (2024) under the Visteon Corporation 2020 Incentive Plan.*
90
Exhibit No.
Description
10.4
Form of Non-Employee Director Restricted Stock Unit Grant Agreement under the Visteon Corporation 2020 Incentive Plan
(incorporated by reference to Exhibit 10.4 to the Annual Report on Form 10-K of Visteon Corporation filed on February 18,
2021)*.
10.5
Visteon Corporation Amended and Restated Deferred Compensation Plan for Non-Employee Directors (incorporated by
reference to Exhibit 10.11 to the Registration Statement on Form S-1 of Visteon Corporation filed on October 22, 2010 (File
No. 333-107104)).*
10.6
Visteon Corporation 2010 Supplemental Executive Retirement Plan, as amended and restated (incorporated by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q of Visteon Corporation filed on November 3, 2011 (File No. 001-15827)).*
10.6.1
Amendment, dated as of September 13, 2012, to the Visteon Corporation 2010 Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon Corporation filed on September 18,
2012).*
10.6.2
Amendment, dated as of February 3, 2017, to the Visteon Corporation 2010 Supplemental Executive Retirement Plan
(incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q of Visteon Corporation filed on April 27, 2017
(File No. 001-15827)).*
10.6.3
Amendment, dated as of October 18, 2023, to the Visteon Corporation 2010 Supplemental Executive Retirement Plan.
(incorporated by reference to Exhibit 10.6.3 to the Annual Report on 10-K of Visteon Corporation filed on February 20, 2024) *
10.7
Visteon Corporation 2011 Savings Parity Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q
of Visteon Corporation filed on November 3, 2011 (File No. 001-15827)).*
10.7.1
Amendment, dated as of September 13, 2012, to the Visteon Corporation 2011 Savings Parity Plan, as amended through
September 13, 2012 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon Corporation filed
on September 18, 2012).*
10.8
Visteon Executive Severance Plan, as amended and restated effective January 1, 2021 (incorporated by reference to the Annual
Report on Form 10-K of Visteon Corporation filed on February 17, 2022).*
10.9
Form of Change in Control Agreement between Visteon Corporation and executive officers of Visteon Corporation (incorporated
by reference to Exhibit 10.2 to the Current Report on Form 8-K of Visteon Corporation filed on October 31, 2012).*
10.9.1
Schedule identifying substantially identical agreements to Officer Change in Control Agreement constituting Exhibit 10.9 hereto
entered into by Visteon Corporation with Ms. Trecker and Messrs. Pynnonen, Ribeiro, Rouquet, Sharif and Vallance.*
14.1
Visteon Corporation - Ethics and Integrity Policy (code of business conduct and ethics) (incorporated by reference to Exhibit
14.1 to the Annual Report on Form 10-K of Visteon Corporation filed on February 22, 2018).
19.1
Visteon Corporation Policy Regarding Purchases and Sales of Company Securities
21.1
Subsidiaries of Visteon Corporation.
23.1
Consent of Independent Registered Public Accounting Firm, Deloitte & Touche LLP.
24.1
Powers of Attorney relating to execution of this Annual Report on Form 10-K.
31.1
Rule 13a-14(a) Certification of Chief Executive Officer dated February 18, 2025.
31.2
Rule 13a-14(a) Certification of Chief Financial Officer dated February 18, 2025.
32.1
Section 1350 Certification of Chief Executive Officer dated February 18, 2025.
32.2
Section 1350 Certification of Chief Financial Officer dated February 18, 2025.
97
Visteon Corporation Amended and Restated Compensation Recovery Policy (incorporated by reference to Exhibit 97 to the
Annual Report on 10-K of Visteon Corporation filed on February 20, 2024).*
101.INS
XBRL Instance Document.**
101.SCH
XBRL Taxonomy Extension Schema Document.**
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.**
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.**
91
Exhibit No.
Description
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.**
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.**
* Indicates that exhibit is a management contract or compensatory plan or arrangement.
** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as
amended, and otherwise are not subject to liability under those sections.
In lieu of filing certain instruments with respect to long-term debt of the kind described in Item 601(b)(4) of Regulation S-K, Visteon agrees to furnish a copy
of such instruments to the Securities and Exchange Commission upon request.
Signatures
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, Visteon Corporation has duly caused this Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.
VISTEON CORPORATION
By:
/s/ COLLEEN E. MYERS
Colleen E. Myers
Vice President and Chief Accounting Officer
Date: February 18, 2025
92
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on
behalf of the registrant and in the capacities and the dates indicated.
Signature
Title
/s/ SACHIN LAWANDE
Director, President and Chief Executive Officer
Sachin Lawande
(Principal Executive Officer)
/s/ JEROME J. ROUQUET
Senior Vice President and Chief Financial Officer
Jerome J. Rouquet
(Principal Financial Officer)
/s/ COLLEEN E. MYERS
Vice President and Chief Accounting Officer
Colleen E. Myers
(Principal Accounting Officer)
/s/ JAMES J. BARRESE*
Director
James J. Barrese
/s/ NAOMI M. BERGMAN*
Director
Naomi M. Bergman
/s/ JEFFREY D. JONES*
Director
Jeffrey D. Jones
/s/ BUNSEI KURE*
Director
Bunsei Kure
/s/ JOANNE M. MAGUIRE*
Director
Joanne M. Maguire
/s/ ROBERT J. MANZO*
Director
Robert J. Manzo
/s/ FRANCIS M. SCRICCO*
Director
Francis M. Scricco
/s/ DAVID L. TREADWELL*
Director
David L. Treadwell
*By:
/s/ BRETT PYNNONEN
Brett Pynnonen
Attorney-in-Fact
93
Exhibit 10.3.1
VISTEON CORPORATION 2020 INCENTIVE PLAN
PERFORMANCE STOCK UNIT GRANT AGREEMENT
Visteon Corporation, a Delaware corporation (the “Company”), subject to the terms of the Visteon Corporation 2020 Incentive Plan (the
“Plan”) and this performance stock unit agreement (this “Agreement”), hereby grants to Participant Name, Global ID Employee ID, (the
“Participant”), performance stock units in the form of performance-based restricted stock units (“Performance Stock Units”) pursuant to Section
6 of the Plan, as further described herein. For purposes of this Agreement, “Employer” means the entity (the Company or a Subsidiary) that
employs the Participant. All capitalized words not defined in this Agreement have the meanings assigned to them in the Plan.
1.
Grant of Performance Stock Units, Target Award.
(a)
The Company hereby grants to the Participant Number of Awards Granted Performance Stock Units with a grant value of Grant
Custom 1 per unit, effective as of Grant Date (the “Grant Date”) under Section 6 of the Plan, and subject to the restrictions set forth in this
Agreement. The Performance Stock Units represent a target number of shares of the Company’s common stock (“Stock”) to be paid (the “Target
Award”) if the Company’s “Total Shareholder Return” (as defined below, “TSR”) results during the “Performance Period” (as defined below)
relative to returns of similar companies is at the 55 percentile. The actual number of shares of Stock to be transferred to the Participant, if any
(the “Final Award”), may be earned up to 200% of the Target Award opportunity, or as low as zero, based on the Company’s TSR performance
percentile within the “TSR Peer Group” (as defined below) and upon satisfaction of the conditions to vesting set forth below in this Agreement.
In the event of certain corporate transactions, the number of Performance Stock Units covered by this Agreement may be adjusted by the
Committee as further described in Section 3 of the Plan. Electronic acceptance of this Agreement through the third party designee must be made
within 90 days of the Grant Date (by Accept By Date); otherwise the award in its entirety will be forfeited.
(b)
For purposes of this Agreement, the “Performance Period” means March 1, 2024 through February 28, 2027.
(c)
For purposes of this Agreement, “Total Shareholder Return” (or “TSR”) is calculated by dividing the “Closing Average Share
Value” (as defined below) by the “Opening Average Share Value” (as defined below).
(i)
The term “Closing Average Share Value” means the average value of the common stock for the trading days during the
20 trading days ending on the last trading day of the Performance Period, which shall be calculated as follows: (A) determine the closing
price of the common stock on each trading date during the 20-day period, (B) multiply each closing price as of that trading date by the
applicable share number described below, and (C) average the amounts so determined for the 20-day period. The Closing Average Share
Value shall take into account any dividends on the common stock for which the ex-dividend date occurred during the Performance
Period, as if the dividend amount had been reinvested in common stock at the closing price on the ex-dividend date. The share number in
clause (B) above, for a given trading day, is the sum of one share plus the cumulative number of shares deemed purchased with such
dividends. Notwithstanding the foregoing, if the Closing Average Share Value is calculated as of a Change in Control, then the Closing
Average Share Value shall be based on the 20-day period ending immediately prior to the Change in Control.
(ii)
The term “Opening Average Share Value” means the average value of the common stock for the trading days during the
20 trading days ending on the last trading day prior to the beginning of the Performance Period, which shall be calculated as follows: (A)
determine the closing price of the common stock on each trading date during the 20-day period, (B) multiply each closing price as of that
trading date by the applicable share number described below, and (C) average the amounts so determined for the 20-day period. The
Opening Average Share Value shall take into account any dividends on the common stock for which the ex-dividend date occurred
during the 20-day period, as if the dividend amount had been reinvested in common
th
Rev. 01/2024
stock at the closing price on the ex-dividend date. The share number in clause (B) above, for a given trading day, is the sum of one share
plus the cumulative number of shares deemed purchased with such dividends.
(d)
For purposes of this Agreement, the “TSR Peer Group” includes the following 17 companies (and Visteon Corporation):
Adient PLC Cooper-Standard Holdings LCI Industries
American Axle &Mfg Holdings Dana Incorporated Lear Corporation
Aptiv PLC Denso Corporation Magna International Inc.
Autoliv, Inc. Faurecia S.E. Modine Manufacturing Company
BorgWarner Inc. Gentex Corporation Valeo SE
Continental Gentherm Incorporated
(e)
TSR Peer Group Adjustments.
(a)
If a TSR Peer Group company becomes bankrupt, the bankrupt company will remain in the TSR Peer Group positioned
at one level below the lowest performing non-bankrupt TSR Peer Group company. In the case of multiple bankruptcies, the bankrupt
companies will be positioned below the non-bankrupt companies in reverse chronological order by bankruptcy date.
(b)
If a TSR Peer Group company is acquired by another company, the acquired TSR Peer Group company will be removed
from the TSR Peer Group.
(c)
If a TSR Peer Group company sells, spins-off, or disposes of a portion of its business, the selling TSR Peer Group
company will remain in the TSR Peer Group for the Performance Period unless such disposition(s) results in the disposition of more than
50% of the company’s total assets during the Performance Period in which case it will be removed.
(d)
If a TSR Peer Group company acquires another company, the acquiring TSR Peer Group company will remain in the
TSR Peer Group for the Performance Period.
(e)
If a TSR Peer Group company is delisted on all major stock exchanges, such delisted TSR Peer Group company will be
removed from the TSR Peer Group.
(f)
If the Company’s and/or any TSR Peer Group company’s stock splits, such company’s performance will be adjusted for
the stock split so as not to give an advantage or disadvantage to such company by comparison to the other companies.
2.
TSR Achievement, Percentage Earned, Vesting, Effect of Change in Control.
(a)
The Participant’s rights to the Target Award will be based on the Participant’s continued employment and the extent to which
TSR is achieved for the Performance Period. Awards can be “Earned” (meaning available for potential vesting) up to 200% of the Target Award
opportunity based on the Company’s TSR performance percentile within the TSR Peer Group as follows (award payouts for performance
between the percentiles specified below is determined based on straight-line interpolation):
(a)
0% of the target award if at less than 25 percentile,
(b)
35% of the target award if at the 25 percentile,
(c)
100% of the target award if at the 55 percentile,
(d)
200% of the target award if at the 80 percentile or higher.
th
th
th
th
2
However, if the Company’s TSR is negative for the Performance Period, the Target Award Earnedwill be capped at 100% unless relative TSR is
at or above the 75th percentile of the peer group at which time the cap would become 150%.
(b)
If the Participant remains in the employ of the Employer through February 28, 2027, the percentage of the Target Award Earned
for the Performance Period will vest on that date.
(c)
If a Change in Control (as defined in the Plan) occurs before February 28, 2027, (x) the Performance Period will be deemed to
have been terminated immediately before the Change in Control, and (y) the Performance Stock Units Earned as of the date of the Change in
Control will be converted into time vesting Restricted Stock Units that will vest on February 28, 2027 if the Participant remains in the employ of
the Company through that date (the “Converted Restricted Stock Units”) and, in addition, the following rules will apply:
i.Unless forfeited earlier pursuant to Paragraph 3, if the Converted Restricted Stock Units are not assumed, converted or replaced
by the acquirer or other continuing entity, the Converted Restricted Stock Units will become fully vested immediately before the Change
in Control (and any remainder of the Target Award will be forfeited).
ii.If (A) the Converted Restricted Stock Units are assumed, converted or replaced by the acquirer or other continuing entity and
(B) the Participant’s employment is terminated within 24 months following the Change in Control by the Employer without Cause (other
than by reason of death or disability) or as otherwise set forth in any change in control agreement, the Converted Restricted Stock Units
will become fully vested immediately upon the termination of the Participant’s employment (and any remainder of the Target Award will
be forfeited).
iii.If (A) the Converted Restricted Stock Units are assumed, converted or replaced by the acquirer or other continuing entity and
(B) the Participant’s employment continues beyond the date that is 24 months after the Change in Control, the Converted Restricted
Stock Units will vest, if at all, in accordance with Paragraph 2(b), subject to Paragraph 3.
3.
Termination of Employment.
(a)
Except as set forth in Paragraph 2(c)(ii) or in the remaining provisions of this Paragraph 3 or as otherwise determined by the
Committee, the Participant’s rights to receive any portion of the Target Award will be cancelled immediately and without notice to the
Participant, and no Final Award will be made, if the Participant terminates employment with the Employer before February 28, 2027. A transfer
or assignment of employment to a company that is owned at least 50% directly or indirectly by the Company shall not be deemed a termination
of employment solely for purposes of Performance Stock Units covered by this Agreement.
(b)
Notwithstanding the provisions of Paragraph 3(a), if the Participant is placed on an approved leave of absence, with or without
pay, the Participant will continue to be eligible to receive the Final Award as if the Participant was actively employed during any period of the
leave.
(c)
Notwithstanding the provisions of Paragraph 3(a), if the Participant’s employment with the Employer is terminated by reason of
disability (for U.S. employees, as defined in the Company’s long-term disability plan and for employees outside of the U.S. as determined by the
Employer’s long-term disability policy or by the Committee or its delegate in its sole discretion), death, “retirement” (as defined below) or
involuntary termination by the Employer without “Cause” (as defined below), and either (x) the Participant had remained in the employ of the
Employer for at least 180 days following the Grant Date before the termination of the Participant’s employment with the Employer, or (y) the
Change in Control has occurred before the termination of employment, the Participant will be entitled to a “Pro Rata Part” of the “Full Period
Award” (as those terms are defined below) for those units that do not vest upon that termination pursuant to Paragraph 2(c)(ii). For these
purposes:
3
i.the “Full Period Award” means that percentage of the Target Award for the Performance Period that would have been Earned as
of February 28, 2027 and vested as of February 28, 2027 if the Participant had remained in the employ of the Company through
February 28, 2027; and
ii.“Pro Rata Part” means a fraction, the numerator of which is the number of days between the Grant Date and the date of the
termination of the Participant’s employment and the denominator of which is the number of days from the Grant Date to February 28,
2027.
(d)
For purposes of this Agreement, “retirement” shall mean the Participant’s voluntary termination of employment either after
attaining age 60 and completion of 5 years of continuous service.
(e)
For purposes of this Agreement, the term “Cause” shall mean (i) the willful and continued failure by the Participant to
substantially perform the Participant’s duties with the Employer (other than any such failure resulting from the Participant’s incapacity due to
physical or mental illness) after a written demand for substantial performance is delivered to the Participant by (A) if the Participant is an
executive officer of the Company, the Board of Directors of the Company, or (B) if the Participant is not an executive officer of the Company,
the head of the Company’s global human resources department, which demand specifically identifies the manner in which the Employer believes
that the Participant has not substantially performed the Participant’s duties, or (ii) the willful engaging by the Participant in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that the Participant’s act, or failure to act, was in the best interest of the Company.
(f)
For purposes of the Performance Stock Units, the Participant’s employment is considered terminated as of the earlier of (a) the
date the Participant’s employment with the Employer is terminated; (b) subject to Paragraph 3(b), the date on which the Participant ceases to
provide active service to the Employer; or (c) the date on which the Participant receives a notice of termination of employment (in all cases,
regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction
where the Participant is employed or rendering services or the terms of the Participant’s employment or service contract, if any). The
Participant’s rights to participate in the Plan will not be extended by any notice period (e.g., service would not include any contractual notice or
any period of “garden leave” or period of pay in lieu of such notice required under any employment law in the country where the Participant
works or resides (including, but not limited to, statutory law, regulatory law and/or common law)). The Committee or its delegate shall have the
exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Performance Stock Units.
4.
Payment of Final Award.
(a)
The Committee will determine the amount of the Final Award with respect to the Performance Period, and the Participant will
receive shares of Stock in settlement of the Final Award, (i) on a date to be selected by the Company between February 28 and May 15, 2027 (if
the Final Award vests on February 28, 2026) or (ii) in any other case in which the Participant terminates employment and is entitled to
accelerated vesting under Paragraph 2(c), within ten days thereafter, except to the extent that Code Section 409A(a)(2)(B)(i) requires that
payment be postponed six months and one day after the date of the Participant’s “separation from service” (the “Settlement Date”).
Notwithstanding the foregoing, the Company may, in its sole discretion and to the extent permitted under Treasury Regulation § 1.409A-3(j)(4)
(ix)(B), terminate this Agreement and pay the Participant’s Final Award on a Settlement Date upon the occurrence of, or within 30 days before,
upon or within twelve months after any Change in Control that constitutes a “change in the ownership,” a “change in the effective control” or a
“change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.
(b)
The number of shares of Stock delivered to the Participant will equal the number of shares included in the Final Award, less
applicable withholding and brokerage fees associated with the sale of any shares of Stock to pay applicable withholding. Any shares of Stock
will be issued in book-entry form, registered in the Participant’s name or in the name of the Participant’s legal representatives,
4
beneficiaries or heirs, as the case may be. The Company will not deliver any fractional share of Stock and the Committee shall determine, in its
discretion, whether cash equal to the Fair Market Value of such fractional share shall be given in lieu of fractional shares or whether some other
more administratively feasible mechanism will be utilized. Notwithstanding the foregoing, in certain jurisdictions as stated in the Addendum to
this grant agreement, the Committee may direct that in lieu of settlement through delivery of shares of Stock, the Participant’s Final Award will
be settled by a single lump sum cash payment equal to the number of shares of Stock that would otherwise be issued in settlement of the Final
Award multiplied by the Fair Market Value of a share of Stock, less applicable withholding taxes. All Performance Stock Units that have become
vested and are settled will be cancelled.
(c)
The Company may retain the services of a third-party administrator to perform administrative services in connection with the
Plan. To the extent the Company has retained such an administrator, any reference to the Company will be deemed to refer to any such third-
party administrator retained by the Company, and the Company may require the Participant to exercise the Participant’s rights under this
Agreement only through such third-party administrator.
5.
Dividend Equivalents.
On each record date during the Grant Date through the Settlement Date, the Participant shall receive, with respect to each Performance
Stock Unit, an additional number of Performance Stock Units equal to the number that such Participant would have received if the Participant
had been the holder of record of one share of Stock and had reinvested any cash dividend paid on such share of Stock into Performance Stock
Units (at the Fair Market Value of a share of Stock on the later of (i) the date the dividend is paid and (ii) the ex-dividend date) subject to the
same terms and conditions as the Performance Stock Units granted herein. For the avoidance of doubt, in no event shall dividend equivalents
with respect to a Performance Stock Unit be paid to the Participant unless and until the underlying Performance Stock Unit vests, and if such
Units are forfeited, the Participant shall have no right to such dividend equivalents.
6.
Responsibility for Taxes; Withholding.
(a)
Regardless of any action the Company or the Employer takes with respect to any or all income tax (including U.S. federal,
state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related
withholding (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by the
Participant, or deemed applicable to the Participant, even if technically due by the Company or a Subsidiary, is and remains the Participant’s
sole responsibility. Furthermore, the Company and the Employer (i) make no representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Performance Stock Units, including the grant of the Performance Stock Units, the
vesting of the Performance Stock Units, the subsequent sale of any shares of Stock acquired pursuant to this Agreement and the receipt of any
dividend equivalents or dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Performance Stock Units to
reduce or eliminate the Participant’s liability for Tax-Related Items. Further, if the Participant becomes subject to taxation in more than one
country between the date the Performance Stock Units are granted and the date of any relevant taxable or tax withholding event, as applicable,
the Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or
account for Tax-Related Items in more than one country.
(b)
The Company and/or the Employer may satisfy its obligation to withhold Tax-Related Items associated with the Performance
Stock Units by withholding a number of Performance Stock Units or shares of Stock having a Fair Market Value, as determined by the
Committee, approximately equal to the amount required to be withheld, provided that the withholding rates the Company applies do not exceed
the maximum statutory tax rates in the Participant’s applicable jurisdiction(s). The Participant shall be deemed to have been issued the full
number of shares of Stock subject to the Performance Stock Units, notwithstanding that a number of the shares of Stock are held back solely
for
5
the purpose of paying the Tax-Related Items due as a result of any aspect of the Performance Stock Units. The Participant will have no further
rights with respect to any shares of Stock that are withheld by the Company pursuant to this provision. The Committee shall determine, in its
discretion, whether cash shall be given in lieu of any fractional Performance Stock Unit remaining after the withholding requirements are
satisfied equal to the Fair Market Value of such fractional share or whether some other more administratively feasible mechanism will be
utilized. The Participant also authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items from the Participant’s
wages or other cash compensation paid to the Participant by the Company or Employer or from proceeds of the sale of shares of Stock. Finally,
the Participant shall pay to the Company any amount of Tax-Related Items that the Company or Employer may be required to withhold as a
result of the Participant’s participation in the Plan that cannot be satisfied by the means previously described.
(c)
Dividend equivalents paid on Performance Stock Units are subject to applicable withholding of Tax-Related Items as described
in Paragraph 6(b).
(d)
This Performance Stock Unit is intended to be excepted from coverage under, or compliant with, the provisions of Section 409A
of the Code, and the regulations and other guidance promulgated thereunder (“409A”). Notwithstanding the foregoing or any other provisions of
this Agreement or the Plan to the contrary, if the Performance Stock Unit is subject to the provisions of 409A (and not exempted therefrom), the
provisions of this Agreement and the Plan shall be administered, interpreted and construed in a manner necessary to comply with 409A (or
disregarded to the extent such provision cannot be so administered, interpreted or construed). If any payment or benefits hereunder may be
deemed to constitute nonconforming deferred compensation subject to taxation under the provisions of 409A, the Participant agrees that the
Company may, without the consent of the Participant, modify this Agreement to the extent and in the manner the Company deems necessary or
advisable in order either to preclude any such payment or benefit from being deemed “deferred compensation” within the meaning of 409A or to
provide such payments or benefits in a manner that complies with the provisions of 409A such that they will not be subject to the imposition of
taxes and/or interest thereunder. If, at the time of the Participant’s separation from service (within the meaning of 409A), (i) the Participant shall
be a specified employee (within the meaning of 409A and using the identification methodology selected by the Company from time to time) and
(ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within the
meaning of 409A) the settlement of which is required to be delayed pursuant to the six-month delay rule set forth in 409A in order to avoid taxes
or penalties under 409A, then the Company shall not settle such amount on the otherwise scheduled settlement date, but shall instead settle it,
without interest, on the first business day of the month after such six-month period. Notwithstanding the foregoing, the Company makes no
representation and/or warranties with respect to compliance with 409A, and the Participants recognizes and acknowledges that 409A could
potentially impose upon the Participant certain taxes and/or interest charges for which the Participant is and shall remain solely responsible.
7.
Conditions on Award.
(a)
Notwithstanding anything herein to the contrary, the Committee may cancel an award of Performance Stock Units, and may
refuse to settle the Final Award, if before a Change in Control and during the period from the date of the Participant's termination of employment
from the Employer to the date of settlement of the Final Award, the Committee determines that the Participant has either (i) refused to be
available, upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the
Company or its Subsidiaries with respect to any matter that was handled by the Participant or under the Participant's supervision while the
Participant was in the employ of the Employer or (ii) engaged in any activity in violation of any non-competition and/or non-solicitation
covenants.
(b)
Notwithstanding anything herein to the contrary, any Performance Stock Unit granted hereunder will be subject to mandatory
repayment by the Participant to the Company to the extent the Participant is, or in the future becomes, subject to (i) any Company claw-back or
recoupment policy that is adopted to comply with the requirements of any applicable laws, rules or regulations, or otherwise, or
6
(ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws, including as required by the
Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other applicable law, regulation or stock
exchange listing requirement, as may be in effect from time to time, and which may operate to create additional rights for the Company with
respect to the Performance Stock Unit and recovery of amounts relating thereto. By accepting this Performance Stock Unit, the Participant
agrees and acknowledges that the Participant is obligated to cooperate with, and provide any and all assistance necessary to, the Company to
recover or recoup this Performance Stock Unit or amounts paid under this Performance Stock Unit subject to claw-back pursuant to such law,
government regulation, stock exchange listing requirement or Company policy. Such cooperation and assistance shall include, but is not limited
to, executing, completing and submitting any documentation necessary to recover or recoup this Performance Stock Unit or amounts paid
hereunder from the Participant’s accounts, or pending or future compensation awards that may be made to the Participant.
8.
Non-transferability.
The Participant has no right to sell, assign, transfer, pledge, or otherwise alienate the Performance Stock Units, and any attempted sale,
assignment, transfer, pledge or other conveyance will be null and void.
9.
Securities Law Restrictions.
(a)
If the Participant is resident outside of the United States, the grant of Performance Stock Units is not intended to be a public
offering of securities in the Participant’s country. The Company has not submitted any registration statement, prospectus or other filings with the
local securities authorities (unless otherwise required under local law), and this grant of Performance Stock Units is not subject to the
supervision of the local securities authorities.
(b)
Notwithstanding anything herein to the contrary, the Committee, in its sole and absolute discretion, may delay transferring
shares of Stock to the Participant or the Participant’s beneficiary in settlement of the Final Award or may impose restrictions or conditions on the
Participant’s (or any beneficiary’s) ability to directly or indirectly sell, hypothecate, pledge, loan, or otherwise encumber, transfer or dispose of
the shares of Stock, if the Committee determines that such action is necessary or desirable for compliance with any applicable state, federal or
non-U.S. law, the requirements of any stock exchange on which the Stock is then traded, or is requested by the Company or the underwriters
managing any underwritten offering of the Company’s securities pursuant to an effective registration statement filed under the Securities Act of
1933.
10.
Limited Interest.
(a)
The grant of the Performance Stock Units will not be construed as giving the Participant any interest other than as provided in
this Agreement. The Participant’s Performance Stock Units constitutes an unsecured promise by the Company to pay the Participant one share of
Stock on the settlement of vested and earned Performance Stock Units. As the holder of Performance Stock Units, the Participant has only the
rights of a general unsecured creditor of the Company. The Company will credit the Performance Stock Units to a book-keeping account in the
name of the Participant, but no assets of the Company will be held or set aside as security for the obligations of the Company hereunder. The
Participant will have no voting rights or any other rights as a shareholder as a result of the grant or vesting of the Performance Stock Units unless
and until shares of Stock are issued in settlement of the Final Award.
(b)
The grant of the Performance Stock Units will not affect in any way the right or power of the Company to make or authorize any
or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger,
consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond,
debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or
7
any part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise.
11.
Nature of Grant.
In accepting the Performance Stock Units, the Participant acknowledges and agrees that:
(1)
the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or
terminated by the Company at any time;
(2)
the grant of Performance Stock Units is a one-time benefit and does not create any contractual or other right to receive future
grants of Performance Stock Units, benefits in lieu of Performance Stock Units, or other benefits in the future, even if Performance Stock Units
have been granted repeatedly in the past;
(3)
all decisions with respect to future grants of Performance Stock Units, if any, and their terms and conditions, will be made by the
Company, in its sole discretion;
(4)
nothing contained in this Agreement is intended to create or enlarge any other contractual obligation between the Company or
any of its Subsidiaries and the Participant;
(5)
the Participant is voluntarily participating in the Plan;
(6)
the grant of the Performance Stock Units will not confer on the Participant any right to continue as an employee or continue in
service of the Employer, nor interfere in any way with the right of the Employer to terminate the Participant's employment at any time;
(7)
the grant of Performance Stock Units will not be interpreted to form an employment or service contract or relationship with the
Company or any of its Subsidiaries;
(8)
the Performance Stock Units are extraordinary items that do not constitute compensation of any kind for services of any kind
rendered to the Company or any Subsidiary, and are outside the scope of the Participant’s employment contract, if any;
(9)
the Performance Stock Units are not intended to replace any pension rights or compensation;
(10)
the Performance Stock Units are not part of the Participant’s normal or expected compensation or salary for any purpose,
including, but not limited to, calculating any severance resignation, termination, redundancy, dismissal, end-of-services payments, holiday pay,
bonuses, long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as
compensation for, or relating in any way to past services for the Company or any of its Subsidiaries or Affiliates;
(11)
the future value of the shares of Stock underlying the Performance Stock Units is unknown and cannot be predicted with
certainty;
(12)
in consideration of the Performance Stock Unit, no claim or entitlement to compensation or damages shall arise from the
Performance Stock Unit resulting from termination of the Participant’s employment (for any reason whatsoever) and the Participant irrevocably
releases the Company and any of its Subsidiaries or Affiliates from any such claim that may arise; if such claim is found by a court of
8
competent jurisdiction to have arisen, then by signing or electronically accepting this Agreement, the Participant shall be deemed to have waived
the Participant’s entitlement to pursue such claim;
(13)
unless otherwise provided in the Plan or by the Company in its discretion, the Performance Stock Units and the benefits
evidenced by this Agreement do not create any entitlement to have the Performance Stock Units or any such benefits transferred to, or assumed
by, another company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of Stock;
(14)
unless otherwise agreed with the Company, the Performance Stock Units and the shares of Stock subject to the Performance
Stock Units, and the income and value of same, are not granted as consideration for, or in connection with, the service the Participant may
provide as a director of a Subsidiary; and
(15)
neither the Company nor any of its Subsidiaries or Affiliates shall be liable for any change in the value of the Performance Stock
Units, the amount realized upon settlement of the Final Award or the amount realized upon a subsequent sale of any shares of Stock acquired
upon settlement of the Final Award, resulting from any fluctuation of the United States Dollar/local currency foreign exchange rate.
12.
Data Privacy.
The Company and the Employer hold and control certain personal information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number
(e.g., resident registration number), salary, nationality, tax jurisdiction, job title, any shares of Stock or directorships held in the Company,
details of all options, Restricted Stock Units, Performance Stock Units or any other entitlement to shares of Stock or units awarded, canceled,
purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan (“Data”).
The Company and/or its Subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation,
administration and management of the Participant’s participation in the Plan, and the Company and its Subsidiaries may further transfer Data to
any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in
the European Economic Area, or elsewhere throughout the world, such as the United States. The Company will protect the Data by insuring that
any such recipients have entered into an agreement to hold or process such Data in compliance with the E.U. Model Clauses or similar
legislation of the country where the Participant resides, and will receive, possess, use, retain and transfer the Data, in electronic or other form,
solely for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer
of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Stock on the Participant’s behalf to
a broker or other third party with whom the Participant may elect to deposit any shares of Stock acquired pursuant to the Plan. The Participant
understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local
human resources representative.
Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not
consent, or later seeks to revoke the Participant’s consent, the Participant’s employment status with the Employer will not be affected. The only
consequence of refusing or withdrawing consent is that the Company would not be able to grant Performance Stock Units or other equity awards
to the Participant or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For more information on the consequences of the Participant’s refusal to
consent or withdrawal of consent, the Participant understands that he or she may contact the Participant’s local human resources representative.
9
The Participant may, at any time, exercise the Participant’s rights provided under applicable personal data protection laws, which may
include the right to (a) obtain confirmation as to the existence of Data, (b) verify the content, origin and accuracy of Data, (c) request the
integration, update, amendment, deletion, or blockage (for breach of applicable laws) of Data, (d) oppose, for legal reasons, the collection,
processing or transfer of the Data that is not necessary or required for the implementation, administration and/or operation of the Plan and the
Participant’s participation in the Plan, and (e) withdraw the Participant’s consent to the collection, processing or transfer of Data as provided
hereunder (in which case the Performance Stock Units will be null and void). The Participant may seek to exercise these rights by contacting the
Participant’s local human resources representative.
Finally, upon request of the Company or the Employer, the Participant agrees to provide an executed data privacy consent form to the
Company and/or the Employer (or any other agreements or consents that may be required by the Company and/or the Employer) that the
Company and/or the Employer may deem necessary to obtain from the Participant for the purpose of administering the Participant’s participation
in the Plan in compliance with the data privacy laws in the Participant’s country, either now or in the future. The Participant understands and
agrees that he or she will not be able to participate in the Plan if the Participant fails to provide any such consent or agreement requested by the
Company and/or the Employer.
13.
Insider Trading/Market Abuse Laws.
By participating in the Plan, the Participant agrees to comply with the Company’s policy on insider trading (to the extent that it is
applicable to the Participant). The Participant further acknowledges that, depending on the Participant’s or the broker’s country of residence or
where the shares of Stock are listed, the Participant may be subject to insider trading restrictions and/or market abuse laws that may affect the
Participant’s ability to accept, acquire, sell or otherwise dispose of shares of Stock, rights to shares of Stock (e.g., Performance Stock Units) or
rights linked to the value of shares of Stock, during such times the Participant is considered to have “inside information” regarding the Company
as defined by the laws or regulations in the Participant’s country. Local insider trading laws and regulations may prohibit the cancellation or
amendment of orders the Participant places before he or she possessed inside information. Furthermore, the Participant could be prohibited from
(i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them
otherwise to buy or sell securities. The Participant understands that third parties include fellow employees. Any restrictions under these laws or
regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The
Participant acknowledges that it is the Participant’s responsibility to comply with any applicable restrictions, and that the Participant should
therefore consult his or her personal advisor on this matter.
14.
Foreign Asset/Account Reporting and Exchange Control Requirements.
The Participant acknowledges that the Participant’s country may have certain foreign asset and/or foreign account reporting
requirements and exchange controls which may affect the Participant’s ability to acquire or hold shares of Stock acquired under the Plan or cash
received from participating in the Plan (including from any dividends paid on shares of Stock or sales proceeds from the sale of shares of Stock)
in a brokerage or bank account outside the Participant’s country. The Participant may be required to report such accounts, assets or transactions
to the tax or other authorities in the Participant’s country. The Participant also may be required to repatriate sale proceeds or other funds received
as a result of the Participant’s participation in the Plan to the Participant’s country through a designated bank or broker within a certain time after
receipt. The Participant acknowledges that it is the Participant’s responsibility to be compliant with such regulations, and the Participant should
consult his or her personal legal advisor for any details.
10
15.
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Performance Stock
Units and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it necessary or
advisable to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Performance Stock Units and
the Plan, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The
Participant agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required
to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Participant’s country. In addition, the
Participant agrees to take any and all actions as may be required to comply with the Participant’s personal obligations under local laws, rules and
regulations in the Participant’s country.
16.
Addendum.
This grant of Performance Stock Units shall be subject to any special terms and conditions set forth in any Addendum to this Agreement
for the Participant’s country of residence or employment, if different. Moreover, if the Participant relocates to one of the countries included in the
Addendum, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the
application of such terms and conditions is necessary or advisable for legal or administrative reasons (or the Company may establish alternative
terms and conditions as may be necessary or advisable to accommodate the Participant’s relocation). The Addendum constitutes part of this
Agreement.
17.
Electronic Delivery of Award Agreement.
The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by
electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through
an online or electronic system established and maintained by the Company or a third party designated by the Company.
18.
Language.
The Participant acknowledges that he or she is proficient in the English language, or has consulted with an advisor who is proficient in
the English language, so as to enable the Participant to understand the provisions of this Agreement and the Plan. If the Participant has received
this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated
version is different than the English version, the English version will control.
19.
No Advice Regarding Grant.
The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the
Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying shares of Stock. The Participant should consult
with his or her own personal tax, legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related
to the Plan.
20.
Confidentiality.
(a) The Participant acknowledges and agrees that the Participant’s position and employment by the Company has required, and will
continue to require, that the Participant have access
11
to, and knowledge of, valuable and sensitive information relating to the Company and its business including, but not limited to, information
relating to its products and product development; pricing; engineering and design specifications; trade secrets; customers; suppliers; employees;
unique and/or proprietary software and source code; and marketing plans (collectively, “Confidential Information”).
(2)
The Participant acknowledges and agrees that the Participant will keep in strict confidence, and will not, directly or indirectly, at
any time during or after the Participant’s employment with the Company, disclose, furnish, disseminate, make available or use Confidential
Information of the Company or its customers or suppliers, without limitation as to when or how the Participant may have acquired such
information, other than in the proper performance of the Participant’s duties to the Company, unless and until such Confidential Information is or
shall become general public knowledge through no fault of the Participant.
(3)
Nothing contained in this Agreement shall limit the Participant’s ability to file a charge or complaint with the Equal Employment
Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange
Commission or any other U.S. federal, state or local and/or non U.S. governmental agency or commission (“Government Agencies”).
Furthermore, this Agreement does not limit the Participant’s ability to communicate with any Government Agencies or otherwise participate in
any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other Company
confidential information, without notice to the Company. This Agreement also does not limit the Employee’s right to receive an award for
information provided to any Government Agencies. Pursuant to the Defend Trade Secrets Act of 2016, an individual may not be held criminally
or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made (A) in confidence to a federal, state,
or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Further, an
individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer's trade secrets
to the attorney and use the trade secret information in the court proceeding if the individual: (i) files any document containing the trade secret
under seal; and (ii) does not disclose the trade secret, except pursuant to court order.
21.
Non-Competition and Non-Solicitation.
(a) For purposes of this Agreement, “Competition” by the Participant means engaging in, or otherwise directly or indirectly being
employed by or acting as a consultant to, or being a director, officer, employee, principal, agent, shareholder, member, owner or partner of,
anywhere in the world that competes, directly or indirectly, with the Company in the Business; provided, however, it shall not be a violation of
this Agreement for the Participant to become the registered or beneficial owner of up to five percent (5%) of any class of share of any entity in
Competition with the Company that is publicly traded on a recognized domestic or foreign securities exchange, provided that the Participant
does not otherwise participate in the Business of such corporation.
(b) For purposes of this Agreement, “Business” means the creation, development, manufacture, sale, promotion and distribution of
vehicle electronics, transportation components, integrated systems and modules, electronic technology and other products and services that the
Company engages in, or is preparing to become engaged in, at the time of the Participant’s termination.
(c) The Participant agrees that, during the Participant’s employment and for 12 months after the termination of the Participant’s
employment by the Participant or by the Employer or Company for any reason other than by reason of involuntary without Cause, the Participant
will not directly or indirectly (i) engage in Competition with the Company; (ii) solicit for the Participant’s benefit or the benefit of any other
person or entity, business of the same or of a similar nature to the Business from any customer that is doing business with the Company or that
did business with the Company in the six months before the termination of the Participant’s employment; or (iii) solicit for the Participant’s
benefit or the benefit of any other person or entity from any known potential customer of the Company, business of the same or of a similar
nature to the Business.
12
(d) The Participant agrees that, during the Participant’s employment and for 12 months after the termination of the Participant’s
employment by the Participant or by the Employer or Company for any reason, the Participant will not directly or indirectly: (i) interfere with
the Business of the Company, including, but not limited to, with respect to any relationship or agreement between the Company and any supplier
to the Company during the period of the Participant’s employment; or (ii) solicit for the Participant’s benefit or the benefit of any other person or
entity, the employment or services of, or hire or engage, any individual who was employed or engaged by the Company during the period of the
Participant’s employment.
(e) The Participant acknowledges that the Company would suffer irreparable harm if the Participant fails to comply with Paragraph 20
or 21 of this Agreement, and that the Company would be entitled to any appropriate relief, including money damages, equitable relief and
attorneys' fees. The Participant further acknowledges that enforcement of the covenants in Paragraph 21 is necessary to ensure the protection and
continuity of the business and goodwill of the Company and that, due to the proprietary nature of the Business of the Company, the restrictions
set forth in Paragraph 21 are reasonable as to geography, duration and scope.
22.
Jurisdiction and Venue.
The parties agree that enforcement of this Agreement, including any legal actions for breach of this Agreement, may only be brought in a
state or federal court located in Oakland County or Wayne County, Michigan, U.S.A. or, at the Company’s or Employer’s discretion, in the
jurisdiction in which the Participant is located. The parties expressly agree that Michigan state and federal courts may properly exercise personal
jurisdiction over them in any such litigation, and hereby waive any objections to personal jurisdiction and venue in: (a) any Michigan state court
located in Wayne County or Oakland County, Michigan; (b) the United States District Court for the Eastern District of Michigan; or (c) at the
Company’s or Employer’s discretion, in the jurisdiction in which the Participant is located.
23.
Incorporation by Reference.
The terms of the Plan are expressly incorporated herein by reference. In the event of any conflict between this Agreement and the Plan,
the Plan will govern.
24.
Governing Law.
This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, U.S.A. without reference to
any conflict of laws principles thereof.
13
25.
Severability.
In the event any provision of the Agreement is held unenforceable, illegal or invalid for any reason, the unenforceability, illegality or
invalidity will not affect the remaining provisions of the Agreement, and the Agreement will be construed and enforced as if the unenforceable,
illegal or invalid provision has not been inserted, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to
the extent (and only to the extent) necessary to make it enforceable, valid and legal.
26.
Waiver.
The waiver by the Company with respect to the Participant’s (or any other participant’s) compliance of any provision of this Agreement
shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision
of this Agreement.
27.
Binding Effect; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the Company and the Participant, and to each of their respective heirs,
representatives, successors and permitted assigns. Neither the terms of this Agreement nor the Plan shall confer any rights or remedies upon any
person other than the Company and the Participant and to each of their respective heirs, representatives, successor and permitted assigns.
28.
Amendment.
This Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of Visteon Corporation
and the Participant.
29.
Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will
constitute one and the same instrument.
14
ADDENDUM TO
THE PERFORMANCE STOCK UNIT GRANT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Capitalized terms used but not defined in this Addendum have the meanings set forth in the Plan and/or in the Agreement.
TERMS AND CONDITIONS
This document (the “Addendum”) includes additional terms and conditions that govern the Performance Stock Units granted under the
Plan if the Participant works and/or resides in one of the countries or jurisdictions listed below. If the Participant is a citizen or resident of a
country other than the one in which the Participant currently is residing and/or working, transfers employment and/or residency after the Grant
Date or is considered a resident of another country for local law purposes, the Company shall, in its discretion, determine to what extent the
terms and conditions contained herein shall apply to the Participant (or, in the event of the Participant’s relocation, the Company may establish
alternative terms and conditions as may be necessary or advisable to accommodate such relocation).
NOTIFICATIONS
This document also includes information regarding certain issues of which the Participant should be aware with respect to the
Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective
countries as of January 2022. Such laws are often complex and change frequently. As a result, the Participant should not rely on the information
noted in this document as the only source of information relating to the consequences of the Participant’s participation in the Plan because the
information may be out of date by the time the Participant vests in Performance Stock Units or sells shares or Stock acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation, and the
Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional
advice as to how the relevant laws in the Participant’s country may apply to his or her situation.
If the Participant is a citizen or resident of a country other than the one in which the Participant currently is residing and/or working,
transfers employment and/or residency after the Grant Date or is considered a resident of another country for local law purposes, the
notifications contained herein may not apply to the Participant.
European Union (“EU”) / European Economic Area (“EEA”) and the United Kingdom
Data Privacy. If the Participant resides and/or performs services in the EU/EEA or the United Kingdom, Paragraph 12 of the Agreement shall be
replaced with the following:
The Company, with its registered address at One Village Center Drive, Van Buren Township, Michigan 48111, U.S.A., is the controller
responsible for the processing of the Participant’s personal data by the Company and the third parties noted below.
(1)Data Collection and Usage. Pursuant to applicable data protection laws, the Participant is hereby notified that the Company collects,
processes and uses certain personally-identifiable information about the Participant for the legitimate interest of implementing, administering
and managing the Plan and generally administering equity awards; specifically, including the Participant’s name, home address, email address
and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of Stock or
directorships held in the Company, and details of all Performance Stock Units, options or any other entitlement to shares of Stock awarded,
canceled, exercised, vested, or outstanding in the Participant’s favor, which the Company receives from
15
the Participant or the Employer (“Personal Data”). In granting the Performance Stock Units under the Plan, the Company will collect Personal
Data for purposes of allocating shares of Stock and implementing, administering and managing the Plan. The Company’s legal basis for the
collection, processing and use of Personal Data is the necessity of the processing for the Company to perform its contractual obligations under
this Agreement and the Plan and the Company’s legitimate business interests of managing the Plan, administering employee equity awards and
complying with its contractual and statutory obligations.
(2)Stock Plan Administration Service Provider. The Company transfers Personal Data to Fidelity Stock Plan Services, an independent
service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In
the future, the Company may select a different service provider and share Personal Data with another company that serves in a similar manner.
The Company’s service provider will open an account for the Participant to receive and trade shares of Stock. The Participant will be asked to
agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in
the Plan. The processing of Personal Data will take place through both electronic and non-electronic means. Personal Data will only be
accessible by those individuals requiring access to it for purposes of implementing, administering and operating the Plan.
(3)International Data Transfers. The Company and its service providers are based in the United States. The Participant’s country or
jurisdiction may have different data privacy laws and protections than the United States. For example, an appropriate level of protection can be
achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission. Personal Data will be
transferred from the EU/EEA to the Company and onward from the Company to any of its service providers based on the EU Standard
Contractual Clauses. The Participant may request a copy of such appropriate safeguards by contacting his or her local human resources
department.
(4)Data Retention. The Company will use Personal Data only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including tax and securities laws. When the
Company no longer needs Personal Data, the Company will remove it from its systems. If the Company keeps Personal Data longer, it would be
to satisfy legal or regulatory obligations and the Company’s legal basis would be for compliance with relevant laws or regulations.
(5)Data Subject Rights. The Participant may have a number of rights under data privacy laws in the Participant’s country. For example,
the Participant’s rights may include the right to (i) request access or copies of Personal Data the Company processes, (ii) request rectification of
incorrect Personal Data, (iii) request deletion of Personal Data, (iv) place restrictions on processing of Personal Data, (v) lodge complaints
with competent authorities in the Participant’s country, and/or (vi) request a list with the names and addresses of any potential recipients of
Personal Data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights, the Participant may contact his
or her local human resources department.
Brazil
Form of Settlement. Unless otherwise determined by the Committee, the Final Award shall be settled in the form of a cash payment.
Labor Law Acknowledgment. The Participant agrees that (i) the benefits provided under the Agreement and the Plan are the result of commercial
transactions unrelated to the Participant’s employment; (ii) the Agreement and the Plan are not part of the terms and conditions of your
employment; and (iii) the income
16
from the vesting of the Performance Stock Units, if any, is not part of the Participant’s remuneration from employment.
Nature of Grant. This provision supplements Section 11 of the Agreement:
By accepting the Performance Stock Units, the Participant agrees that (i) the Participant is making an investment decision and (ii) the value of
the underlying Shares is not fixed and may increase or decrease over the vesting period without compensation to the Participant.
Compliance with Law. By participating in the Plan, the Participant agrees to comply with applicable Brazilian laws and to pay any and all
applicable taxes associated with the vesting of the Performance Stock Units and any cash payment made under the Plan.
Bulgaria
No country-specific provisions.
Canada
Form of Settlement. Notwithstanding anything to the contrary in the Agreement or the Plan, the Performance Stock Units shall be settled only in
shares of Stock (and may not be settled in cash).
Securities Law Notification. The Participant may not be permitted to sell shares of Stock acquired under the Plan within Canada. The Participant
may only be permitted to sell or dispose of any shares of Stock acquired under the Plan if such sale or disposal takes place outside of Canada
through the facilities of a stock exchange on which the shares of Stock are listed (i.e., the Nasdaq).
Forfeiture upon Termination. This provision supplements Section 3(f) of the Agreement:
For purposes of the Performance Stock Units, the Committee or its delegate may provide that the Participant’s termination will occur as of the
date the Participant is no longer actually employed or otherwise rendering services to the Employer (regardless of the reason for such termination
and whether or not later found to be invalid or in breach of employment or other laws or otherwise rendering services or the terms of the
Participant’s employment or other service agreement, if any). In such case, unless otherwise provided in the Agreement or extended by the
Company, the Participant’s right to Earn and vest in the Performance Stock Units under the Plan, if any, will terminate as of such date (the
“Termination Date”). The Termination Date will not be extended by any common law notice period. Notwithstanding the foregoing, however, if
applicable employment standards legislation specifically requires continued entitlement to vesting during a statutory notice period, the
Participant’s right to vest in the Performance Stock Units under the Plan, if any will be allowed to continue for that minimum notice period but
then immediately terminate effective as of the last day of the Participant’s minimum statutory notice period. In the event the date the Participant
is no longer providing actual service cannot be reasonably determined under the terms of the Agreement and/or the Plan, the Committee or its
delegate shall have the exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the
Performance Stock Units (including whether the Participant may still be considered to be providing services while on a leave of absence). Unless
the Agreement or applicable employment standards legislation specifically requires, in the case of the Participant, the Participant will not Earn or
be entitled to any pro-rated vesting for that portion of time before the date on which his service relationship is terminated (as determined under
this provision), nor will the Participant be entitled to any compensation for lost vesting.
English Language Consent. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal
proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties
reconnaissent avoir expressément souhaité que la convention, ainsi que tous les documents, avis et procédures judiciarise,
17
exécutés, donnés ou intentés en vertu de, ou lié, directement ou indirectement à la présente convention, soient rédigés en langue anglaise.
Data Privacy: The following provision supplements Paragraph 12 of the Agreement:
The Participant hereby authorizes the Company and the Company’s representatives to discuss and obtain all relevant information from
all personnel, professional or non-professional, involved in the administration of the Plan. The Participant further authorizes the
Company, the Employer and its other Subsidiaries or Affiliates to disclose and discuss the Plan with their advisors. The Participant
further authorizes the Company, the Employer and any other Subsidiary or Affiliate to record such information and to keep such
information in the Participant’s employee file.
China
Form of Settlement. Unless otherwise determined by the Committee, the Final Award shall be settled in the form of a cash payment.
France
Type of Grant. The Performance Stock Units are not granted as “French-qualified” awards and are not intended to qualify for the special tax and
social security treatment applicable to shares granted for no consideration under Sections L. 225-197 to L. 225-197-5 and Sections L. 22-10-59
to L. 22-10-60 of the French Commercial Code, as amended.
English Language. The parties to the Agreement acknowledge that it is their express wish that the Agreement, as well as all documents, notices
and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les
parties reconnaissent avoir exigé la rédaction en anglais de la présente convention, ainsi que de tous documents exécutés, avis donnés et
procédures judiciaires intentées, directement ou indirectement, relativement à ou suite à la présente convention.
Germany
No country-specific provisions.
India
No country-specific provisions.
Japan
No country-specific provisions.
Mexico
Commercial Relationship. The Participant expressly recognizes that the Participant’s participation in the Plan and the Company’s grant of the
Performance Stock Units does not constitute an employment relationship between the Participant and the Company. The Participant has been
granted the Performance Stock Units as a consequence of the commercial relationship between the Company and the Company’s Subsidiary in
Mexico that employs the Participant (“Visteon-Mexico”) and Visteon-Mexico is the Participant’s sole employer. Based on the foregoing, (a) the
Participant expressly recognizes the Plan and the benefits the Participant may derive from the Participant’s participation in the Plan does not
establish any rights between the Participant and Visteon-Mexico, (b) the Plan and the benefits the Participant may derive from the Participant’s
participation in the Plan are not part of the employment conditions and/or
18
benefits provided by Visteon-Mexico, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the
Company, shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with Visteon-Mexico.
Extraordinary Item of Compensation. The Participant expressly recognizes and acknowledges that the Participant’s participation in the Plan is a
result of the discretionary and unilateral decision of the Company, as well as the Participant’s free and voluntary decision to participate in the
Plan in accordance with the terms and conditions of the Plan, the Agreement and this Addendum. As such, the Participant acknowledges and
agrees that the Company may, in its sole discretion, amend and/or discontinue the Participant’s participation in the Plan at any time and without
any liability. The value of the Performance Stock Units is an extraordinary item of compensation outside the scope of the Participant’s
employment contract, if any. The Performance Stock Units are not part of the Participant’s regular or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or
any similar payments, which are the exclusive obligations of Visteon-Mexico.
Securities Law Notification. The Performance Stock Units and shares of Stock offered under the Plan have not been registered with the National
Register of Securities maintained by the Mexican National Banking and Securities Commission and cannot be offered or sold publicly in
Mexico. In addition, the Plan, this Agreement and any other document relating to the Performance Stock Units may not be publicly distributed in
Mexico. These materials are addressed to the Participant only because of his or her existing relationship with the Company and Visteon-Mexico
and these materials should not be reproduced or copied in any form. The offer contained in these materials does not constitute a public offering
of securities but rather constitutes a private placement of securities addressed specifically to individuals who are present employees of Visteon-
Mexico made in accordance with the provisions of the Mexican Securities Market Law, and any rights under such offering shall not be assigned
or transferred.
Portugal
English Language. The Participant hereby expressly declares that he or she has full knowledge of the English language and has read, understood
and fully accepts and agrees with the terms and conditions established in the Plan and the Agreement. O Participante, pelo presente
instrumento, declara expressamente que tem pleno conhecimento da língua inglesa e que leu, compreendeu e livremente aceitou e concordou
com os termos e condições estabelecidas no Plano e do Contrato.
Romania
No country-specific provisions.
Russia
Form of Settlement. Unless otherwise determined by the Committee, the Restricted Stock Units shall be settled in the form of a cash payment.
19
Slovakia
No country-specific provisions.
South Korea
No country-specific provisions.
Spain
Acknowledgement of Discretionary Nature of the Plan; No Vested Rights.
In accepting the grant of Performance Stock Units, the Participant acknowledges that he or she consents to participation in the Plan and has
received a copy of the Plan.
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion granted Performance Stock Units under the
Plan to individuals who may be employees of the Company or its Subsidiaries or Affiliates throughout the world. The decision is a limited
decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or
any of its Subsidiaries or Affiliates on an ongoing basis. Consequently, the Participant understands that the Performance Stock Units are granted
on the assumption and condition that the Performance Stock Units and the shares of Stock acquired upon vesting of the Performance Stock Units
shall not become a part of any employment contract (either with the Company or any of its Subsidiaries or Affiliates) and shall not be considered
a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Participant
understands that this grant would not be made to the Participant but for the assumptions and conditions referenced above; thus, the Participant
acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason,
the grant of the Performance Stock Units shall be null and void.
The Participant understands and agrees that, as a condition of the grant of the Performance Stock Units, the Participant’s termination of
employment for any reason (including the reasons listed below) will automatically result in the loss of the Performance Stock Units to the extent
the Performance Stock Units have not vested as of date that the Participant ceases active employment. In particular, unless otherwise provided in
the Agreement, the Participant understands and agrees that any unvested Performance Stock Units as of the date the Participant ceases active
employment will be forfeited without entitlement to the underlying shares of Stock or to any amount of indemnification in the event of the
termination of employment by reason of, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal
adjudged or recognized to be without cause, individual or collective dismissal on objective grounds, whether adjudged or recognized to be with
or without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the
Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree
1382/1985. The Participant acknowledges that the Participant has read and specifically accepts the conditions referred to in the Agreement
regarding the impact of a termination of employment on the Participant’s Performance Stock Units.
Securities Law Notification. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish
territory under the Plan. The Plan, the Performance Stock Units, the Agreement, this Addendum and all other materials the Participant may
receive regarding the Participant’s participation in the Plan have not been nor will they be registered with the Comisión Nacional del Mercado de
Valores (Spanish Securities Exchange Commission), and they do not constitute a public offering prospectus.
20
Taiwan
Securities Law Information. The Performance Stock Units and any shares of Stock to be issued pursuant to the Plan are available only for
employees. The grant of Performance Stock Units is not a public offer of securities by a Taiwanese company.
Thailand
No country-specific provisions.
Tunisia
Form of Settlement. Unless otherwise determined by the Committee, the Final Award shall be settled in the form of a cash payment.
United Kingdom
Withholding of Taxes. Without limitation to Paragraph 6 of the Agreement, the Participant hereby agrees that the Participant is liable for all Tax-
Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company, the Employer or by Her
Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). The Participant also hereby agrees to
indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold on the
Participant’s behalf or have paid or will pay to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, if the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the
Exchange Act), the Participant may not be able to indemnify the Company or the Employer for the amount of any income tax not collected from
or paid by the Participant, as it may be considered a loan. In this case, the amount of any income tax not collected within 90 days after the end of
the U.K. tax year in which the event giving rise to the Tax-Related Items occurs may constitute an additional benefit to the Participant on which
additional income tax and national insurance contribution may be payable. The Participant understands that the Participant will be responsible
for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing
the Company and/or the Employer for the value of any employee national insurance contribution due on this additional benefit, which may be
recovered from the Participant’s by the Company or the Employer by any of the means referred to in Paragraph 6 of the Agreement.
Exclusion of Claim. The Participant hereby acknowledges and agrees that the Participant will have no entitlement to compensation or damages
insofar as such entitlement arises or may arise from the Participant ceasing to have rights under or to be entitled to Performance Stock Units,
whether or not as a result of termination of employment (whether such termination is in breach of contract or otherwise), or from the loss of
diminution in value of the Performance Stock Units. Upon the grant of the Performance Stock Units, the Participant shall be deemed to have
waived irrevocably such entitlement.
21
Exhibit 10.3.2
VISTEON CORPORATION 2020 INCENTIVE PLAN
RESTRICTED STOCK UNIT GRANT AGREEMENT
Visteon Corporation, a Delaware corporation (the “Company”), subject to the terms of the Visteon Corporation 2020 Incentive Plan (the
“Plan”) and this restricted stock unit agreement (this “Agreement”), hereby grants to Participant Name, Global ID Employee ID, (the
“Participant”), restricted stock units (“Restricted Stock Units”) as further described herein. For purposes of this Agreement, “Employer” means
the entity (the Company or a Subsidiary) that employs the Participant. All capitalized words not defined in this Agreement have the meanings
assigned to them in the Plan.
1. Grant of Restricted Stock Units.
The Company hereby grants to the Participant Number of Awards Granted Restricted Stock Units with a grant value of Grant Custom
1 per unit, effective as of Grant Date (the “Grant Date”) under the Plan, and subject to the restrictions set forth in this Agreement. In the event
of certain corporate transactions, the number of Restricted Stock Units covered by this Agreement may be adjusted by the Committee as
further described in Section 3 of the Plan. Electronic acceptance of this Agreement through the third party designee must be made within 90
days of the Grant Date (by Accept By Date); otherwise the award in its entirety will be forfeited.
2. Vesting of Restricted Stock Units.
(a) Unless terminated earlier pursuant to Paragraph 3, during the Participant’s continuous employment with the Employer, the
Restricted Stock Units will vest in accordance with the following vesting schedule:
(i)
Vesting Date 1 Quantity will vest on Vesting Date 1;
(ii)
Vesting Date 2 Quantity will vest on Vesting Date 2; and
(iii)
Vesting Date 3 Quantity will vest on Vesting Date 3
(b) If a Change in Control (as defined in the Plan) occurs before all of the
Restricted Stock Units granted under this Agreement have vested, the following rules will apply, in addition to the vesting provided for in
Paragraph 2(a):
(i)
Unless forfeited earlier pursuant to Paragraph 3, if the Restricted Stock Units are not assumed, converted or replaced
by the acquirer or other continuing entity, the outstanding Restricted Stock Units that have not previously vested will become fully
vested immediately before the Change in Control.
(ii)
If (A) the Restricted Stock Units are assumed, converted or replaced by the acquirer or other continuing entity and (B) the
Participant’s employment is terminated within 24 months following the Change in Control by the Employer without “Cause” (as defined
below) (other than by reason of death or disability) or as otherwise set forth in any change in control agreement, the outstanding
Restricted Stock Units that have not previously vested will become fully vested immediately upon the termination of the Participant’s
employment.
3. Termination of Employment.
(a) Except as set forth in Paragraph 2(b)(ii) or in the remaining provisions of this
Rev. 01/2024
Paragraph 3, if the Participant’s employment with the Employer is terminated for any reason, the Participant will forfeit any and all rights to
Restricted Stock Units that have not vested on the termination date, and such Restricted Stock Units will be cancelled. A transfer or assignment
of employment to a company that is owned at least 50% directly or indirectly by the Company shall not be deemed a termination of employment
solely for purposes of Restricted Stock Units covered by this Agreement.
(b)
Notwithstanding the provisions of Paragraph 3(a), if the Participant is placed on an approved leave of absence, with or without
pay, the Restricted Stock Units will vest in accordance with the provisions of Paragraph 2 as if the Participant was actively employed.
(c)
Notwithstanding the provisions of Paragraph 3(a), if the Participant’s
employment with the Employer is terminated by reason of “early retirement” (as defined below) or involuntary termination by the Employer
without “Cause” (as defined below), and either (x) the Participant had remained in the employ of the Employer for at least 180 days following
the Grant Date, or (y) a Change in Control has occurred before the termination of employment, the Restricted Stock Units that have not
previously vested and that do not fully vest upon that termination pursuant to Paragraph 2(b)(ii) will vest on a pro rata basis so that, taking into
account the Restricted Stock Units, if any, that have previously vested pursuant to Paragraph 2(a)(i) or pursuant to Paragraphs 2(a)(i) and 2(a)(ii),
the percentage of all Restricted Stock Units granted under this Agreement that is vested is equal to 100% multiplied by a fraction, the numerator
of which is the number of days from the date of grant to the date of the termination of the Participant’s employment, inclusive, and the
denominator of which is the number of days from the Grant Date to Vesting Date 3.
(d)
Notwithstanding the provisions of Paragraph 3(a), if the Participant’s employment with the Employer is terminated by
reason of disability (for U.S. employees, as defined in the Company’s long-term disability plan and for employees outside of the U.S. as
determined by the Employer’s long-term disability policy or by the Committee or its delegate, in its sole discretion), death, or "retirement"
(as defined below), and either (x) the Participant had remained in the employ of the Employer for at least 180 days following the Grant
Date before the termination of the Participant’s employment with the Employer, or (y) the Change in Control has occurred before the
termination of employment, the Participant will be entitled to 100% of the outstanding units as of the date of the termination of the
Participant’s employment.
(e)
For purposes of this Agreement, “early retirement” shall mean the Participant’s
voluntary termination of employment either (1) after attaining age 55 and completion of 10 years of continuous service, or (2) after
completion of at least 30 years of continuous service, regardless of age.
(f)
For purposes of this Agreement, “retirement” shall mean the Participant’s voluntary termination of employment after
attaining age 60 and completion of 5 years of continuous service.
(g)
For purposes of this Agreement, the term “Cause” shall mean (i) the willful and
continued failure by the Participant to substantially perform the Participant’s duties with the Employer (other than any such failure resulting from
the Participant’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Participant by
(A) if the Participant is an executive officer of the Company, the Board of Directors of the Company, or (B) if the Participant is not an executive
officer of the Company, the head of the Company’s global human resources department, which demand specifically identifies the manner in which
the Employer believes that the Participant has not substantially performed the Participant’s duties, or (ii) the willful engaging by the Participant in
conduct which is demonstrably and materially injurious to the Company or a Subsidiary, monetarily or otherwise. For purposes of clauses (i) and
(ii) of this definition, no act, or failure to act, on the Participant’s
2
part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the
Participant’s act, or failure to act, was in the best interest of the Company.
(h)
For purposes of the Restricted Stock Units, the Participant’s employment is considered terminated as of the earlier of (a) the date
the Participant’s employment with the Employer is terminated; (b) subject to Paragraph 3(b), the date on which the Participant ceases to provide
active service to the Employer; or (c) the date on which the Participant receives a notice of termination of employment (in all cases, regardless of
the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the
Participant is employed or rendering services or the terms of the Participant’s employment or service contract, if any). The Participant’s rights to
participate in the Plan will not be extended by any notice period (e.g., service would not include any contractual notice or any period of “garden
leave” or period of pay in lieu of such notice required under any employment law in the country where the Participant works or resides (including,
but not limited to, statutory law, regulatory law and/or common law)). The Committee or its delegate shall have the exclusive discretion to
determine when the Participant is no longer actively providing services for purposes of the Restricted Stock Units.
4. Settlement of Vested Units.
(a) The Participant’s vested Restricted Stock Units will be settled upon the earliest to occur of (i) the vesting date applicable to such
Restricted Stock Unit as set forth in Paragraph 2(a) above (disregarding any acceleration of the vesting date under Paragraph 2(b) or Paragraph 3
above), (ii) in the case of accelerated vesting under Paragraph 3(d) due to the death of the Participant, as soon as practicable (and in any event
within 60 days) following the Participant’s date of death, or (iii) in any other case in which the Participant terminates employment and is entitled
to accelerated vesting, within ten days thereafter, except to the extent that Code Section 409A(a)(2)(B)(i) requires that payment be postponed for
six months and one day, or the Participant’s earlier death occurring, after the date of the Participant’s “separation from service” (such applicable
date, the “Settlement Date”). Notwithstanding the foregoing, the Company may, in its sole discretion and to the extent permitted under Treasury
Regulation § 1.409A3(j)(4)(ix)(B), terminate this Agreement and pay all outstanding Restricted Stock Units to the Participant, on a fully vested
and immediately payable basis, on a Settlement Date within 30 days before, upon or within twelve months after Change in Control that constitutes
a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the
Company within the meaning of Section 409A of the Code.
(b)
Settlement will be made through the delivery of one share of Stock for each
vested Restricted Stock Unit, less applicable withholding and brokerage fees associated with the sale of any shares of Stock to pay applicable
withholding. Any shares of Stock will be issued in book-entry form, registered in the Participant’s name or in the name of the Participant’s legal
representatives, beneficiaries or heirs, as the case may be. The Company will not deliver any fractional share of Stock and the Committee shall
determine, in its discretion, whether cash equal to the Fair Market Value of such fractional share shall be given in lieu of fractional shares or
whether some other more administratively feasible mechanism will be utilized. Notwithstanding the foregoing, in certain jurisdictions as stated
in the Addendum to this grant agreement, the Committee may direct that in lieu of settlement through delivery of shares of Stock, the
Participant’s vested Restricted Stock Units will be settled by a single lump sum cash payment equal to the number of vested Restricted Stock
Units to be settled multiplied by the Fair Market Value on the Settlement Date of a share of Stock, less applicable withholding taxes. All
Restricted Stock Units that have become vested and are settled will be cancelled.
(c)
The Company may retain the services of a third-party administrator to perform
administrative services in connection with the Plan. To the extent the Company has retained such an administrator, any reference to the
Company will be deemed to refer to any such third-party
3
administrator retained by the Company, and the Company may require the Participant to exercise the Participant’s rights under this Agreement
only through such third-party administrator.
5. Dividend Equivalents.
On each record date during the Grant Date through the Settlement Date, the Participant shall receive, with respect to each Restricted
Stock Unit, an additional number of Restricted Stock Units equal to the number that such Participant would have received if the Participant had
been the holder of record of one share of Stock and had reinvested any cash dividend paid on such share of Stock into Restricted Stock Units
(at the Fair Market Value of a share of Stock on the later of (i) the date the dividend is paid and (ii) the ex-dividend date) subject to the same
terms and conditions as the Restricted Stock Units granted herein. For the avoidance of doubt, in no event shall dividend equivalents with
respect to a Restricted Stock Unit be paid to the Participant unless and until the underlying Restricted Stock Unit vests, and if such Units are
forfeited, the Participant shall have no right to such dividend equivalents.
6. Responsibility for Taxes; Withholding.
(1)
Regardless of any action the Company or the Employer takes with respect to any or all income tax (including U.S. federal,
state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related
withholding (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally due by the
Participant, or deemed applicable to the Participant, even if technically due by the Company or a Subsidiary, is and remains the Participant’s
sole responsibility. Furthermore, the Company and the Employer (i) make no representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the grant of the Restricted Stock Units, the vesting of
the Restricted Stock Units, the subsequent sale of any shares of Stock acquired pursuant to this Agreement and the receipt of any dividend
equivalents or dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or
eliminate the Participant’s liability for Tax-Related Items. Further, if the Participant becomes subject to taxation in more than one country
between the date the Restricted Stock Units are granted and the date of any relevant taxable or tax withholding event, as applicable, the
Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account
for Tax-Related Items in more than one country.
(2)
The Company and/or the Employer may satisfy its obligation to withhold Tax-Related Items associated with the Restricted
Stock Units by withholding a number of Restricted Stock Units or shares of Stock having a Fair Market Value, as determined by the
Committee, approximately equal to the amount required to be withheld, provided that the withholding rates the Company applies do not exceed
the maximum statutory tax rates in the Participant’s applicable jurisdiction(s). The Participant shall be deemed to have been issued the full
number of shares of Stock subject to the Restricted Stock Units, notwithstanding that a number of the shares of Stock are held back solely for
the purpose of paying the Tax-Related Items due as a result of any aspect of the Restricted Stock Units. The Participant will have no further
rights with respect to any shares of Stock that are withheld by the Company pursuant to this provision. The Committee shall determine, in its
discretion, whether cash shall be given in lieu of any fractional Restricted Stock Unit remaining after the withholding requirements are satisfied
equal to the Fair Market Value of such fractional share or whether some other more administratively feasible mechanism will be utilized. The
Participant also authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items from the Participant’s wages or
other cash compensation paid to the Participant by the Company or Employer or from proceeds of the sale of shares of Stock. Finally, the
Participant shall pay to the Company any amount of
4
Tax-Related Items that the Company or Employer may be required to withhold as a result of the Participant’s participation in the Plan that
cannot be satisfied by the means previously described.
(c) Dividend equivalents paid on Restricted Stock Units are subject to applicable withholding of Tax-Related Items as described in
Paragraph 6(b).
(d) This Restricted Stock Unit is intended to be excepted from coverage under, or compliant with, the provisions of Section 409A of
the Code, and the regulations and other guidance promulgated thereunder (“409A”). Notwithstanding the foregoing or any other provisions of
this Agreement or the Plan to the contrary, if the Restricted Stock Unit is subject to the provisions of 409A (and not exempted therefrom), the
provisions of this Agreement and the Plan shall be administered, interpreted and construed in a manner necessary to comply with 409A (or
disregarded to the extent such provision cannot be so administered, interpreted or construed). If any payment or benefits hereunder may be
deemed to constitute nonconforming deferred compensation subject to taxation under the provisions of 409A, the Participant agrees that the
Company may, without the consent of the Participant, modify this Agreement to the extent and in the manner the Company deems necessary or
advisable in order either to preclude any such payment or benefit from being deemed “deferred compensation” within the meaning of 409A or
to provide such payments or benefits in a manner that complies with the provisions of 409A such that they will not be subject to the imposition
of taxes and/or interest thereunder. If, at the time of the Participant’s separation from service (within the meaning of 409A), (i) the Participant
shall be a specified employee (within the meaning of 409A and using the identification methodology selected by the Company from time to
time) and (ii) the Company shall make a good faith determination that an amount payable hereunder constitutes deferred compensation (within
the meaning of 409A) the settlement of which is required to be delayed pursuant to the six-month delay rule set forth in 409A in order to avoid
taxes or penalties under 409A, then the Company shall not settle such amount on the otherwise scheduled settlement date, but shall instead
settle it, without interest, on the first business day of the month after such six-month period. Notwithstanding the foregoing, the Company
makes no representation and/or warranties with respect to compliance with 409A, and the Participants recognizes and acknowledges that 409A
could potentially impose upon the Participant certain taxes and/or interest charges for which the Participant is and shall remain solely
responsible.
7. Conditions on Award.
(1)
Notwithstanding anything herein to the contrary, the Committee may cancel an award of Restricted Stock Units, and may refuse
to settle vested Restricted Stock Units, if before a Change in Control and during the period from the date of the Participant's termination of
employment from the Employer to the date of settlement, the Committee determines that the Participant has either (i) refused to be available,
upon request, at reasonable times and upon a reasonable basis, to consult with, supply information to and otherwise cooperate with the Company
or its Subsidiaries with respect to any matter that was handled by the Participant or under the Participant's supervision while the Participant was
in the employ of the Employer or (ii) engaged in any activity in violation of any non-competition and/or non-solicitation covenants.
(b) Notwithstanding anything herein to the contrary, any Restricted Stock Unit granted hereunder will be subject to mandatory
repayment by the Participant to the Company to the extent the Participant is, or in the future becomes, subject to (i) any Company claw-back or
recoupment policy that is adopted to comply with the requirements of any applicable laws, rules or regulations, or otherwise, or (ii) any
applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws, including as required by the
Sarbanes-Oxley Act of 2002, Dodd-Frank Wall Street Reform and Consumer Protection Act, or other applicable law, regulation or stock
exchange listing requirement, as may be in effect from time to time, and which may operate to create additional rights for the Company with
respect to the Restricted Stock Unit and recovery of amounts relating thereto. By
5
accepting this Restricted Stock Unit, the Participant agrees and acknowledges that the Participant is obligated to cooperate with, and provide any
and all assistance necessary to, the Company to recover or recoup this Restricted Stock Unit or amounts paid under this Restricted Stock Unit
subject to claw-back pursuant to such law, government regulation, stock exchange listing requirement or Company policy. Such cooperation and
assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup this
Restricted Stock Unit or amounts paid hereunder from the Participant’s accounts, or pending or future compensation awards that may be made to
the Participant.
8. Non-transferability.
The Participant has no right to sell, assign, transfer, pledge, or otherwise alienate the Restricted Stock Units, and any attempted sale,
assignment, transfer, pledge or other conveyance will be null and void.
9.
Securities Law Restrictions.
(a) If the Participant is resident outside of the United States, the grant of Restricted Stock Units is not intended to be a public offering of
securities in the Participant’s country. The Company has not submitted any registration statement, prospectus or other filings with the local
securities authorities (unless otherwise required under local law), and this grant of Restricted Stock Units is not subject to the supervision of the
local securities authorities.
(b) Notwithstanding anything herein to the contrary, the Committee, in its sole and
absolute discretion, may delay transferring shares of Stock to the Participant or the Participant’s beneficiary in settlement of vested Restricted
Stock Units or may impose restrictions or conditions on the Participant’s (or any beneficiary’s) ability to directly or indirectly sell, hypothecate,
pledge, loan, or otherwise encumber, transfer or dispose of the shares of Stock, if the Committee determines that such action is necessary or
desirable for compliance with any applicable state, federal or non-U.S. law, the requirements of any stock exchange on which the shares of
Stock is then traded, or is requested by the Company or the underwriters managing any underwritten offering of the Company’s securities
pursuant to an effective registration statement filed under the Securities Act of 1933.
10.
Limited Interest.
(a)
The grant of the Restricted Stock Units will not be construed as giving the
Participant any interest other than as provided in this Agreement. The Participant’s Restricted Stock Units constitutes an unsecured promise by
the Company to pay the Participant one share of Stock on the settlement of vested Restricted Stock Units. As the holder of Restricted Stock
Units, the Participant has only the rights of a general unsecured creditor of the Company. The Company will credit the Restricted Stock Units to
a book-keeping account in the name of the Participant, but no assets of the Company will be held or set aside as security for the obligations of
the Company hereunder. The Participant will have no voting rights or any other rights as a shareholder as a result of the grant or vesting of the
Restricted Stock Units unless and until shares of Stock are issued in settlement of vested Restricted Stock Units.
(b)
The grant of the Restricted Stock Units will not affect in any way the right or power of the Company to make or authorize any
or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger,
consolidation or business combination of the Company, or any issuance or modification of any term, condition, or covenant of any bond,
debenture, debt, preferred stock or other instrument ahead of or affecting the stock or the rights of the holders thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any
6
part of its assets or business or any other Company act or proceeding, whether of a similar character or otherwise.
11.
Nature of Grant.
In accepting the Restricted Stock Units, the Participant acknowledges and agrees that:
(1)
the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or
terminated by the Company at any time;
(2)
the grant of Restricted Stock Units is a one-time benefit and does not create any contractual or other right to receive future
grants of Restricted Stock Units, benefits in lieu of Restricted Stock Units, or other benefits in the future, even if Restricted Stock Units have
been granted repeatedly in the past;
(3)
all decisions with respect to future grants of Restricted Stock Units, if any, and their terms and conditions, will be made by the
Company, in its sole discretion;
(4)
nothing contained in this Agreement is intended to create or enlarge any other contractual obligation between the Company or
any of its Subsidiaries and the Participant;
(5)
the Participant is voluntarily participating in the Plan;
(6)
the grant of the Restricted Stock Units will not confer on the Participant any right to continue as an employee or continue in
service of the Employer, nor interfere in any way with the right of the Employer to terminate the Participant's employment at any time;
(7)
the grant of Restricted Stock Units will not be interpreted to form an employment or service contract or relationship with the
Company or any of its Subsidiaries;
(8)
the Restricted Stock Units are extraordinary items that do not constitute compensation of any kind for services of any kind
rendered to the Company or any Subsidiary, and are outside the scope of the Participant’s employment contract, if any;
(9)
the Restricted Stock Units are not intended to replace any pension rights or compensation;
(10)
the Restricted Stock Units are not part of the Participant’s normal or expected compensation or salary for any purpose, including,
but not limited to, calculating any severance resignation, termination, redundancy, dismissal, end-of-services payments, holiday pay, bonuses,
long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as compensation
for, or relating in any way to past services for the Company or any of its Subsidiaries or Affiliates;
(11)
the future value of the shares of Stock underlying the Restricted Stock Units is unknown and cannot be predicted with certainty;
(12)
in consideration of the Restricted Stock Unit, no claim or entitlement to compensation or damages shall arise from the Restricted
Stock Unit resulting from termination of the Participant’s employment (for any reason whatsoever) and the Participant irrevocably releases the
Company and its Subsidiaries or Affiliates from any such claim that may arise; if such claim is found by a court of
7
competent jurisdiction to have arisen, then by signing or electronically accepting this Agreement, the Participant shall be deemed to have waived
the Participant’s entitlement to pursue such claim;
(13)
unless otherwise provided in the Plan or by the Company in its discretion, the Restricted Stock Units and the benefits evidenced
by this Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another
company nor be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of Stock;
(14)
unless otherwise agreed with the Company, the Restricted Stock Units and the shares of Stock subject to the Restricted Stock
Units, and the income and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a
director of a Subsidiary; and
(15)
neither the Company nor any of its Subsidiaries or Affiliates shall be liable for any change in the value of the Restricted Stock
Units, the amount realized upon settlement of the Restricted Stock Units or the amount realized upon a subsequent sale of any shares of Stock
acquired upon settlement of the Restricted Stock Units, resulting from any fluctuation of the United States Dollar/local currency foreign
exchange rate.
12.
Data Privacy.
The Company and the Employer hold and control certain personal information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number
(e.g., resident registration number), salary, nationality, tax jurisdiction, job title, any shares of Stock or directorships held in the Company,
details of all options, Restricted Stock Units or any other entitlement to shares of Stock or units awarded, canceled, purchased, vested,
unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan (“Data”).
The Company and/or its Subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation,
administration and management of the Participant’s participation in the Plan, and the Company and its Subsidiaries may further transfer Data to
any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in
the European Economic Area, or elsewhere throughout the world, such as the United States. The Company will protect the Data by insuring that
any such recipients have entered into an agreement to hold or process such Data in compliance with the E.U. Model Clauses or similar
legislation of the country where the Participant resides, and will receive, possess, use, retain and transfer the Data, in electronic or other form,
solely for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer
of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Stock on the Participant’s behalf to
a broker or other third party with whom the Participant may elect to deposit any shares of Stock acquired pursuant to the Plan. The Participant
understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local
human resources representative.
Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not
consent, or later seeks to revoke the Participant’s consent, the Participant’s employment status with the Employer will not be affected. The only
consequence of refusing or withdrawing consent is that the Company would not be able to grant Restricted Stock Units or other equity awards to
the Participant or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For more information on the consequences of the Participant’s refusal to
consent or withdrawal of consent, the Participant understands that he or she may contact the Participant’s local human resources representative.
8
The Participant may, at any time, exercise the Participant’s rights provided under applicable personal data protection laws, which may
include the right to (a) obtain confirmation as to the existence of Data, (b) verify the content, origin and accuracy of Data, (c) request the
integration, update, amendment, deletion, or blockage (for breach of applicable laws) of Data, (d) oppose, for legal reasons, the collection,
processing or transfer of the Data that is not necessary or required for the implementation, administration and/or operation of the Plan and the
Participant’s participation in the Plan, and (e) withdraw the Participant’s consent to the collection, processing or transfer of Data as provided
hereunder (in which case the Restricted Stock Units will be null and void). The Participant may seek to exercise these rights by contacting the
Participant’s local human resources representative.
Finally, upon request of the Company or the Employer, the Participant agrees to provide an executed data privacy consent form to the
Company and/or the Employer (or any other agreements or consents that may be required by the Company and/or the Employer) that the
Company and/or the Employer may deem necessary to obtain from the Participant for the purpose of administering the Participant’s participation
in the Plan in compliance with the data privacy laws in the Participant’s country, either now or in the future. The Participant understands and
agrees that he or she will not be able to participate in the Plan if the Participant fails to provide any such consent or agreement requested by the
Company and/or the Employer.
13.
Insider Trading/Market Abuse Laws.
By participating in the Plan, the Participant agrees to comply with the Company’s policy on insider trading (to the extent that it is
applicable to the Participant). The Participant further acknowledges that, depending on the Participant’s or the broker’s country of residence or
where the shares of Stock are listed, the Participant may be subject to insider trading restrictions and/or market abuse laws that may affect the
Participant’s ability to accept, acquire, sell or otherwise dispose of shares of Stock, rights to shares of Stock (e.g., Restricted Stock Units) or
rights linked to the value of shares of Stock, during such times the Participant is considered to have “inside information” regarding the Company
as defined by the laws or regulations in the Participant’s country. Local insider trading laws and regulations may prohibit the cancellation or
amendment of orders the Participant places before he or she possessed inside information. Furthermore, the Participant could be prohibited from
(i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them
otherwise to buy or sell securities. The Participant understands that third parties include fellow employees. Any restrictions under these laws or
regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The
Participant acknowledges that it is the Participant’s responsibility to comply with any applicable restrictions, and that the Participant should
therefore consult his or her personal advisor on this matter.
14.
Foreign Asset/Account Reporting and Exchange Control Requirements.
The Participant acknowledges that the Participant’s country may have certain foreign asset and/or foreign account reporting
requirements and exchange controls which may affect the Participant’s ability to acquire or hold shares of Stock acquired under the Plan or cash
received from participating in the Plan (including from any dividends paid on shares of Stock or sales proceeds from the sale of shares of Stock)
in a brokerage or bank account outside the Participant’s country. The Participant may be required to report such accounts, assets or transactions
to the tax or other authorities in the Participant’s country. The Participant also may be required to repatriate sale proceeds or other funds received
as a result of the Participant’s participation in the Plan to the Participant’s country through a designated bank or broker within a certain time after
receipt. The Participant acknowledges that it is the Participant’s responsibility to be compliant with such regulations, and the Participant should
consult his or her personal legal advisor for any details.
9
15.
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Restricted Stock Units
and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it necessary or advisable to
comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan, and
to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Participant
agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the
Company and its Subsidiaries to comply with local laws, rules and regulations in the Participant’s country. In addition, the Participant agrees to
take any and all actions as may be required to comply with the Participant’s personal obligations under local laws, rules and regulations in the
Participant’s country.
16.
Addendum.
This grant of Restricted Stock Units shall be subject to any special terms and conditions set forth in any Addendum to this Agreement for
the Participant’s country of residence or employment, if different. Moreover, if the Participant relocates to one of the countries included in the
Addendum, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the
application of such terms and conditions is necessary or advisable for legal or administrative reasons (or the Company may establish alternative
terms and conditions as may be necessary or advisable to accommodate the Participant’s relocation). The Addendum constitutes part of this
Agreement.
17.
Electronic Delivery of Award Agreement.
The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by
electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through
an online or electronic system established and maintained by the Company or a third party designated by the Company.
18.
Language.
The Participant acknowledges that he or she is proficient in the English language, or has consulted with an advisor who is proficient in
the English language, so as to enable the Participant to understand the provisions of this Agreement and the Plan. If the Participant has received
this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated
version is different than the English version, the English version will control.
19.
No Advice Regarding Grant.
The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the
Participant’s participation in the Plan, or the Participant’s acquisition or sale of the underlying shares of Stock. The Participant should consult
with his or her own personal tax, legal and financial advisors regarding the Participant’s participation in the Plan before taking any action related
to the Plan.
20.
Confidentiality.
(a) The Participant acknowledges and agrees that the Participant’s position and employment by the Company has required, and will
continue to require, that the Participant have access to, and knowledge of, valuable and sensitive information relating to the Company and its
business including, but not limited to, information relating to its products and product development; pricing;
10
engineering and design specifications; trade secrets; customers; suppliers; employees; unique and/or proprietary software and source code; and
marketing plans (collectively, “Confidential Information”).
(2)
The Participant acknowledges and agrees that the Participant will keep in strict confidence, and will not, directly or indirectly, at
any time during or after the Participant’s employment with the Company, disclose, furnish, disseminate, make available or use Confidential
Information of the Company or its customers or suppliers, without limitation as to when or how the Participant may have acquired such
information, other than in the proper performance of the Participant’s duties to the Company, unless and until such Confidential Information is or
shall become general public knowledge through no fault of the Participant.
(3)
Nothing contained in this Agreement shall limit the Participant’s ability to file a charge or complaint with the Equal Employment
Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange
Commission or any other U.S. federal, state or local and/or non-U.S. governmental agency or commission (“Government Agencies”).
Furthermore, this Agreement does not limit the Participant’s ability to communicate with any Government Agencies or otherwise participate in
any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other Company
confidential information, without notice to the Company. This Agreement also does not limit the Participant’s right to receive an award for
information provided to any Government Agencies. Pursuant to the Defend Trade Secrets Act of 2016, an individual may not be held criminally
or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a U.S.
federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or
investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other
proceeding. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the
employer's trade secrets to the attorney and use the trade secret information in the court proceeding if the individual: (a) files any document
containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.
21.
Non-Competition and Non-Solicitation.
(a) For purposes of this Agreement, “Competition” by the Participant means engaging in, or otherwise directly or indirectly being
employed by or acting as a consultant to, or being a director, officer, employee, principal, agent, shareholder, member, owner or partner of,
anywhere in the world that competes, directly or indirectly, with the Company in the Business; provided, however, it shall not be a violation of
this Agreement for the Participant to become the registered or beneficial owner of up to five percent (5%) of any class of share of any entity in
Competition with the Company that is publicly traded on a recognized domestic or foreign securities exchange, provided that the Participant
does not otherwise participate in the Business of such corporation.
(b) For purposes of this Agreement, “Business” means the creation, development, manufacture, sale, promotion and distribution of
vehicle electronics, transportation components, integrated systems and modules, electronic technology and other products and services that the
Company engages in, or is preparing to become engaged in, at the time of the Participant’s termination.
(c) The Participant agrees that, during the Participant’s employment and for 12 months after the termination of the Participant’s
employment by the Participant or by the Employer or Company for any reason other than by reason of involuntary without Cause, the Participant
will not directly or indirectly (i) engage in Competition with the Company; (ii) solicit for the Participant’s benefit or the benefit of any other
person or entity, business of the same or of a similar nature to the Business from any customer that is doing business with the Company or that
did business with the Company in the six months before the termination of the Participant’s employment; or (iii) solicit for the Participant’s
benefit or the benefit of any other person or entity from any known potential customer of the Company, business of the same or of a similar
nature to the Business.
(d) The Participant agrees that, during the Participant’s employment and for 12 months after the termination of the Participant’s
employment by the Participant or by the Employer or Company for any reason, the Participant will not directly or indirectly: (i) interfere with
the Business of the Company,
11
including, but not limited to, with respect to any relationship or agreement between the Company and any supplier to the Company during the
period of the Participant’s employment; or (ii) solicit for the Participant’s benefit or the benefit of any other person or entity, the employment or
services of, or hire or engage, any individual who was employed or engaged by the Company during the period of the Participant’s employment.
(e) The Participant acknowledges that the Company would suffer irreparable harm if the Participant fails to comply with Paragraph 20
or 21 of this Agreement, and that the Company would be entitled to any appropriate relief, including money damages, equitable relief and
attorneys' fees. The Participant further acknowledges that enforcement of the covenants in Paragraph 21 is necessary to ensure the protection and
continuity of the business and goodwill of the Company and that, due to the proprietary nature of the Business of the Company, the restrictions
set forth in Paragraph 21 are reasonable as to geography, duration and scope.
22.
Jurisdiction and Venue.
The parties agree that enforcement of this Agreement, including any legal actions for breach of this Agreement, may only be brought in a
state or federal court located in Oakland County or Wayne County, Michigan, U.S.A. or, at Company’s or Employer’s discretion, in the
jurisdiction in which the Participant is located. The parties expressly agree that Michigan state and federal courts may properly exercise personal
jurisdiction over them in any such litigation, and hereby waive any objections to personal jurisdiction and venue in: (a) any Michigan state court
located in Wayne County or Oakland County, Michigan; (b) the United States District Court for the Eastern District of Michigan; or (c) at the
Company’s or Employer’s discretion, in the jurisdiction in which the Participant is located.
23.
Incorporation by Reference.
The terms of the Plan are expressly incorporated herein by reference. In the event of any conflict between this Agreement and the Plan,
the Plan will govern.
24.
Governing Law.
This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, U.S.A., without reference
to any conflict of laws principles thereof.
25.
Severability.
If any provision of the Agreement is held unenforceable, illegal or invalid for any reason, the unenforceability, illegality or invalidity
will not affect the remaining provisions of the Agreement, and the Agreement is to be construed and enforced as if the unenforceable, illegal or
invalid provision has not been inserted, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid and legal.
26.
Waiver.
The waiver by the Company with respect to the Participant’s (or any other participant’s) compliance of any provision of this Agreement
shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision
of this Agreement.
27.
Binding Effect; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the Company and the Participant, and to each of their respective heirs,
representatives, successors and permitted assigns. Neither the terms of this Agreement nor the Plan shall confer any rights or remedies upon any
person
12
other than the Company and the Participant and to each of their respective heirs, representatives, successor and permitted assigns.
28.
Amendment.
This Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of Visteon Corporation
and the Participant.
29.
Counterparts.
This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
13
ADDENDUM TO
THE RESTRICTED STOCK UNIT GRANT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Capitalized terms used but not defined in this Addendum have the meanings set forth in the Plan and/or in the Agreement.
TERMS AND CONDITIONS
This document (the “Addendum”) includes additional terms and conditions that govern the Restricted Stock Units granted under the Plan
if the Participant works and/or resides in one of the countries or jurisdictions listed below. If the Participant is a citizen or resident of a country
other than the one in which the Participant currently is residing and/or working, transfers employment and/or residency after the Grant Date or is
considered a resident of another country for local law purposes, the Company shall, in its discretion, determine to what extent the terms and
conditions contained herein shall apply to the Participant (or, in the event of the Participant’s relocation, the Company may establish alternative
terms and conditions as may be necessary or advisable to accommodate such relocation).
NOTIFICATIONS
This document also includes information regarding exchange controls and certain other issues of which the Participant should be aware
with respect to the Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in
the respective countries as of January 2022. Such laws are often complex and change frequently. As a result, the Participant should not rely on
the information noted in this document as the only source of information relating to the consequences of the Participant’s participation in the
Plan because the information may be out of date by the time the Participant vests in Restricted Stock Units or sells shares or Stock acquired
under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participant’s particular situation, and the
Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional
advice as to how the relevant laws in the Participant’s country may apply to his or her situation.
If the Participant is a citizen or resident of a country other than the one in which the Participant currently is residing and/or working,
transfers employment and/or residency after the Grant Date or is considered a resident of another country for local law purposes, the
notifications contained herein may not apply to the Participant.
European Union (“EU”) / European Economic Area (“EEA”) and the United Kingdom
Data Privacy. If the Participant resides and/or performs services in the EU/EEA or the United Kingdom, Paragraph 12 of the Agreement shall be
replaced with the following:
The Company, with its registered address at One Village Center Drive, Van Buren Township, Michigan 48111, U.S.A., is the controller
responsible for the processing of the Participant’s personal data by the Company and the third parties noted below.
(1)Data Collection and Usage. Pursuant to applicable data protection laws, the Participant is hereby notified that the Company collects,
processes and uses certain personally-identifiable information about the Participant for the legitimate interest of implementing, administering
and managing the Plan and generally administering equity awards; specifically, including the Participant’s name, home address, email address
and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of Stock or
directorships held in the Company, and details of all Restricted Stock Units, options or any other entitlement to shares of Stock awarded,
canceled, exercised, vested, or outstanding in the Participant’s favor, which the Company receives from the Participant or the Employer
(“Personal Data”). In granting the Restricted Stock Units under the Plan, the Company will collect Personal Data for purposes of allocating
shares of Stock and
14
implementing, administering and managing the Plan. The Company’s legal basis for the collection, processing and use of Personal Data is the
necessity of the processing for the Company to perform its contractual obligations under this Agreement and the Plan and the Company’s
legitimate business interests of managing the Plan, administering employee equity awards and complying with its contractual and statutory
obligations.
(2)Stock Plan Administration Service Provider. The Company transfers Personal Data to Fidelity Stock Plan Services, an independent
service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In
the future, the Company may select a different service provider and share Personal Data with another company that serves in a similar manner.
The Company’s service provider will open an account for the Participant to receive and trade shares of Stock. The Participant will be asked to
agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in
the Plan. The processing of Personal Data will take place through both electronic and non-electronic means. Personal Data will only be
accessible by those individuals requiring access to it for purposes of implementing, administering and operating the Plan.
(3)International Data Transfers. The Company and its service providers are based in the United States. The Participant’s country or
jurisdiction may have different data privacy laws and protections than the United States. For example, an appropriate level of protection can be
achieved by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission. Personal Data will be
transferred from the EU/EEA to the Company and onward from the Company to any of its service providers based on the EU Standard
Contractual Clauses. The Participant may request a copy of such appropriate safeguards by contacting his or her local human resources
department.
(4)Data Retention. The Company will use Personal Data only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including tax and securities laws. When the
Company no longer needs Personal Data, the Company will remove it from its systems. If the Company keeps Personal Data longer, it would be
to satisfy legal or regulatory obligations and the Company’s legal basis would be for compliance with relevant laws or regulations.
(5)Data Subject Rights. The Participant may have a number of rights under data privacy laws in the Participant’s country. For example,
the Participant’s rights may include the right to (i) request access or copies of Personal Data the Company processes, (ii) request rectification of
incorrect Personal Data, (iii) request deletion of Personal Data, (iv) place restrictions on processing of Personal Data, (v) lodge complaints
with competent authorities in the Participant’s country, and/or (vi) request a list with the names and addresses of any potential recipients of
Personal Data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights, the Participant may contact his
or her local human resources department.
Brazil
Form of Settlement. Unless otherwise determined by the Committee, the Restricted Stock Units shall be settled in the form of a cash payment.
Labor Law Acknowledgment. The Participant agrees that (i) the benefits provided under the Agreement and the Plan are the result of commercial
transactions unrelated to the Participant’s employment; (ii) the Agreement and the Plan are not part of the terms and conditions of the
Participant’s employment; and (iii)
15
the income from the vesting of the Restricted Stock Units, if any, is not part of the Participant’s remuneration from employment.
Nature of Grant. This provision supplements Section 11 of the Agreement:
By accepting the Restricted Stock Units, the Participant agrees that (i) the Participant is making an investment decision and (ii) the value of the
underlying Shares is not fixed and may increase or decrease over the vesting period without compensation to the Participant.
Compliance with Law. By participating in the Plan, the Participant agrees to comply with applicable Brazilian laws and to pay any and all
applicable taxes associated with the vesting of the Restricted Stock Units and any cash payment made under the Plan.
Bulgaria
No country-specific provisions.
Canada
Form of Settlement. Notwithstanding anything to the contrary in the Agreement or the Plan, the Restricted Stock Units shall be settled only in
shares of Stock (and may not be settled in cash).
Securities Law Notification. The Participant may not be permitted to sell shares of Stock acquired under the Plan within Canada. The Participant
may only be permitted to sell or dispose of any shares of Stock acquired under the Plan if such sale or disposal takes place outside of Canada
through the facilities of a stock exchange on which the shares of Stock are listed (i.e., the Nasdaq).
Forfeiture upon Termination. This provision supplements Section 3 of the Agreement:
For purposes of the Restricted Stock Units, the Committee or its delegate may provide that the Participant’s termination will occur as of the date
the Participant is no longer actually employed or otherwise rendering services to the Employer (regardless of the reason for such termination and
whether or not later found to be invalid or in breach of employment or other laws or otherwise rendering services or the terms of the Participant’s
employment or other service agreement, if any). In such case, unless otherwise provided in the Agreement or extended by the Company, the
Participant’s right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date (the “Termination Date”). The
Termination Date will not be extended by any common law notice period. Notwithstanding the foregoing, however, if applicable employment
standards legislation specifically requires continued entitlement to vesting during a statutory notice period, the Participant’s right to vest in the
Restricted Stock Units under the Plan, if any will be allowed to continue for that minimum notice period but then immediately terminate
effective as of the last day of the Participant’s minimum statutory notice period. In the event the date the Participant is no longer providing actual
service cannot be reasonably determined under the terms of the Agreement and/or the Plan, the Committee or its delegate shall have the
exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Restricted Stock Units
(including whether the Participant may still be considered to be providing services while on a leave of absence). Unless the Agreement or
applicable employment standards legislation specifically requires, in the case of the Participant, the Participant will not earn or be entitled to any
pro-rated vesting for that portion of time before the date on which his service relationship is terminated (as determined under this provision), nor
will the Participant be entitled to any compensation for lost vesting.
English Language Consent. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal
proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties
reconnaissent avoir expressément souhaité que la convention, ainsi que tous les documents, avis et procédures judiciarise,
16
exécutés, donnés ou intentés en vertu de, ou lié, directement ou indirectement à la présente convention, soient rédigés en langue anglaise.
Data Privacy. The following provision supplements Paragraph 12 of the Agreement:
The Participant hereby authorizes the Company and the Company’s representatives to discuss and obtain all relevant information from
all personnel, professional or non-professional, involved in the administration of the Plan. The Participant further authorizes the
Company, the Employer and its other Subsidiaries or Affiliates to disclose and discuss the Plan with their advisors. The Participant
further authorizes the Company, the Employer and any other Subsidiary or Affiliate to record such information and to keep such
information in the Participant’s employee file.
China
Form of Settlement. Unless otherwise determined by the Committee, the Restricted Stock Units shall be settled in the form of a cash payment.
France
Type of Grant. The Restricted Stock Units are not granted as “French-qualified” awards and are not intended to qualify for the special tax and
social security treatment applicable to shares granted for no consideration under Sections L. 225-197 to L. 225-197-5 and Sections L. 22-10-59
to L. 22-10-60 of the French Commercial Code, as amended.
English Language. The parties to the Agreement acknowledge that it is their express wish that the Agreement, as well as all documents, notices
and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les
parties reconnaissent avoir exigé la rédaction en anglais de la présente convention, ainsi que de tous documents exécutés, avis donnés et
procédures judiciaires intentées, directement ou indirectement, relativement à ou suite à la présente convention.
Germany
No country-specific provisions.
Hungary
No country-specific provisions.
India
No country-specific provisions.
Japan
No country-specific provisions.
Mexico
Commercial Relationship. The Participant expressly recognizes that the Participant’s participation in the Plan and the Company’s grant of the
Restricted Stock Units does not constitute an employment relationship between the Participant and the Company. The Participant has been
granted the Restricted Stock Units as a consequence of the commercial relationship between the Company and the Company’s Subsidiary in
Mexico that employs the Participant (“Visteon-Mexico”) and Visteon-Mexico is the
17
Participant’s sole employer. Based on the foregoing, (a) the Participant expressly recognizes the Plan and the benefits the Participant may derive
from the Participant’s participation in the Plan does not establish any rights between the Participant and Visteon-Mexico, (b) the Plan and the
benefits the Participant may derive from the Participant’s participation in the Plan are not part of the employment conditions and/or benefits
provided by Visteon-Mexico, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the
Company, shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with Visteon-Mexico.
Extraordinary Item of Compensation. The Participant expressly recognizes and acknowledges that the Participant’s participation in the Plan is a
result of the discretionary and unilateral decision of the Company, as well as the Participant’s free and voluntary decision to participate in the
Plan in accordance with the terms and conditions of the Plan, the Agreement and this Addendum. As such, the Participant acknowledges and
agrees that the Company may, in its sole discretion, amend and/or discontinue the Participant’s participation in the Plan at any time and without
any liability. The value of the Restricted Stock Units is an extraordinary item of compensation outside the scope of the Participant’s employment
contract, if any. The Restricted Stock Units are not part of the Participant’s regular or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any similar
payments, which are the exclusive obligations of Visteon-Mexico.
Securities Law Notification. The Restricted Stock Units and shares of Stock offered under the Plan have not been registered with the National
Register of Securities maintained by the Mexican National Banking and Securities Commission and cannot be offered or sold publicly in
Mexico. In addition, the Plan, this Agreement and any other document relating to the Restricted Stock Units may not be publicly distributed in
Mexico. These materials are addressed to the Participant only because of his or her existing relationship with the Company and Visteon-Mexico
and these materials should not be reproduced or copied in any form. The offer contained in these materials does not constitute a public offering
of securities but rather constitutes a private placement of securities addressed specifically to individuals who are present employees of Visteon-
Mexico made in accordance with the provisions of the Mexican Securities Market Law, and any rights under such offering shall not be assigned
or transferred.
Portugal
English Language. The Participant hereby expressly declares that he or she has full knowledge of the English language and has read, understood
and fully accepts and agrees with the terms and conditions established in the Plan and the Agreement. O Participante, pelo presente
instrumento, declara expressamente que tem pleno conhecimento da língua inglesa e que leu, compreendeu e livremente aceitou e concordou
com os termos e condições estabelecidas no Plano e do Contrato.
Romania
No country-specific provisions.
Russia
Form of Settlement. Unless otherwise determined by the Committee, the Restricted Stock Units shall be settled in the form of a cash payment.
Slovakia
No country-specific provisions.
South Korea
18
No country-specific provisions.
Spain
Acknowledgement of Discretionary Nature of the Plan; No Vested Rights.
In accepting the grant of Restricted Stock Units, the Participant acknowledges that he or she consents to participation in the Plan and has
received a copy of the Plan.
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion granted Restricted Stock Units under the
Plan to individuals who may be employees of the Company or its Subsidiaries or Affiliates throughout the world. The decision is a limited
decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or
any of its Subsidiaries or Affiliates on an ongoing basis. Consequently, the Participant understands that the Restricted Stock Units are granted on
the assumption and condition that the Restricted Stock Units and the shares of Stock acquired upon vesting of the Restricted Stock Units shall
not become a part of any employment contract (either with the Company or any of its Subsidiaries or Affiliates) and shall not be considered a
mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Participant
understands that this grant would not be made to the Participant but for the assumptions and conditions referenced above; thus, the Participant
acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason,
the grant of the Restricted Stock Units shall be null and void.
The Participant understands and agrees that, as a condition of the grant of the Restricted Stock Units, the Participant’s termination of
employment for any reason (including the reasons listed below) will automatically result in the loss of the Restricted Stock Units to the extent
the Restricted Stock Units have not vested as of date that the Participant ceases active employment. In particular, unless otherwise provided in
the Agreement, the Participant understands and agrees that any unvested Restricted Stock Units as of the date the Participant ceases active
employment will be forfeited without entitlement to the underlying shares of Stock or to any amount of indemnification in the event of the
termination of employment by reason of, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal
adjudged or recognized to be without cause, individual or collective dismissal on objective grounds, whether adjudged or recognized to be with
or without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the
Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree
1382/1985. The Participant acknowledges that the Participant has read and specifically accepts the conditions referred to in the Agreement
regarding the impact of a termination of employment on the Participant’s Restricted Stock Units.
Securities Law Notification. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish
territory under the Plan. The Plan, the Restricted Stock Units, the Agreement, this Addendum and all other materials the Participant may receive
regarding the Participant’s participation in the Plan have not been nor will they be registered with the Comisión
19
Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and they do not constitute a public offering prospectus.
Taiwan
Securities Law Information. The Restricted Stock Units and any shares of Stock to be issued pursuant to the Plan are available only for
employees. The grant of Restricted Stock Units is not a public offer of securities by a Taiwanese company.
Thailand
No country-specific provisions.
Tunisia
Form of Settlement. Unless otherwise determined by the Committee, the Restricted Stock Units shall be settled in the form of a cash payment.
United Kingdom
Withholding of Taxes. Without limitation to Paragraph 6 of the Agreement, the Participant hereby agrees that the Participant is liable for all Tax-
Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company, the Employer or by Her
Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). The Participant also hereby agrees to
indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold on the
Participant’s behalf or have paid or will pay to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, if the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the
Exchange Act), the Participant may not be able to indemnify the Company or the Employer for the amount of any income tax not collected from
or paid by the Participant, as it may be considered a loan. In this case, the amount of any income tax not collected within 90 days after the end of
the U.K. tax year in which the event giving rise to the Tax-Related Items occurs may constitute an additional benefit to the Participant on which
additional income tax and national insurance contribution may be payable. The Participant understands that the Participant will be responsible
for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing
the Company and/or the Employer for the value of any employee national insurance contribution due on this additional benefit, which may be
recovered from the Participant’s by the Company or the Employer by any of the means referred to in Paragraph 6 of the Agreement.
Exclusion of Claim. The Participant hereby acknowledges and agrees that the Participant will have no entitlement to compensation or damages
insofar as such entitlement arises or may arise from the Participant ceasing to have rights under or to be entitled to Restricted Stock Units,
whether or not as a result of termination of employment (whether such termination is in breach of contract or otherwise), or from the loss of
diminution in value of the Restricted Stock Units. Upon the grant of the Restricted Stock Units, the Participant shall be deemed to have waived
irrevocably such entitlement.
20
EXHIBIT 10.9.1
Schedule identifying substantially identical agreements, between Visteon Corporation ("Visteon") and each of the
persons named below, to the Change in Control Agreement constituting Exhibit 10.9 to the Annual Report on Form 10-K
of Visteon for the fiscal year ended December 31, 2024.
Name
Brett D. Pynnonen
Joao Paulo Ribeiro
Jerome J. Rouquet
Qais Sharif
Kristin E. Trecker
Robert R. Vallance
Exhibit 19.1
VISTEON CORPORATION
STATEMENT OF POLICY
REGARDING PURCHASES AND SALES
OF COMPANY SECURITIES
Since Visteon Corporation is a public company, there are important restrictions imposed on the Company, as well as its
directors, officers and employees, under applicable laws. Specifically, the federal securities laws and rules prohibit any person that
is aware of material, nonpublic information from purchasing or selling securities and from communicating such information to any
other person for such use. Compliance with these restrictions is essential. Violations may subject the Company and the offending
person to significant criminal penalties and civil liabilities. For example, criminal penalties may include up to $5 million in fines and
up to 20 years in jail. In addition, private actions against public companies and their directors, officers and employees have become
quite common and can involve substantial costs, both monetarily and in terms of time. Equally important, any appearance of
impropriety on the part of the Company or its insiders could impair investor confidence and severely damage our reputation and
business relationships. For those reasons, violation of this policy or federal or state insider trading or tipping laws may, in the case
of a director, subject the director to a demand for resignation and, in the case of an officer or employee, subject the officer or
employee to disciplinary action by the Company up to and including termination for cause.
This policy is intended to implement a framework to promote compliance with the securities laws with respect to purchases
and sales of the Company's securities, including its common stock, as well as the securities of Business Partners (as defined
below). This policy does not address disclosure of Company information, which is covered in the Company’s Statement of Policy
Regarding the Disclosure of Company Information. Directors, officers and employees are, however, cautioned that they may be
held criminally and civilly responsible under the securities laws for trading by other persons if they disclose inside information to
such persons, even if they do not themselves purchase or sell Company stock on that basis. Therefore, Company policy prohibits
you from disclosing material nonpublic information regarding the Company or its Business Partners to persons within the Company
whose jobs do not require them to have that information, or outside of the Company to other persons, such as family, friends,
business associates and investors, unless the disclosure is made in accordance with the Company’s policies regarding the
protection or authorized external disclosure of information regarding the Company.
The following restrictions apply to any purchase or sale of the Company's securities by any directors, officers and
employees. The terms "purchase" and "sale" should be broadly read to include direct and indirect transactions, as well as
commitments (like contracts or instructions) to purchase or sell the securities and gifts or charitable donations of securities. For
example, this policy covers sales of common stock acquired upon exercise of stock options, and purchases and sales through
voluntary transfers into or out of a Company stock fund under the Company's retirement or other benefit plans. The restrictions also
apply to derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to
the Company’s securities.
Restrictions Specific to Directors and Officers.
- 1 –
January 2025
Exhibit 19.1
Directors and officers, and the family members sharing their household, may not purchase or sell the Company's securities
at any time during the quarterly "black-out period" commencing at 12:01 a.m. on the twenty-fifth (25 ) day of the last month of the
quarter and ending at 11:59 p.m. on the second full business day after the date of the first public announcement of the Company's
quarterly or annual earnings (or such longer black-out period as the Company may announce). For example, for the quarter ended
June 30, if earnings were released publicly before the U.S. market trading session begins on July 21, then transactions would be
prohibited from 12:01 a.m. on June 25 through 11:59 p.m. on July 22 (or if July 22 is not a business day, the next succeeding
business day).
In addition, in order to minimize the risk of inadvertent violations, directors and officers must pre-clear all purchases and
sales of the Company's securities with the Chief Legal Officer, even if such purchase or sale does not fall within a black-out period.
Restrictions Applicable to All Personnel, including Directors and Officers.
Company personnel, and the family members sharing their household, may not purchase or sell the Company's securities,
or recommend the purchase or sale, at any time that they are aware of any material, non-public information relating to the
Company or any affiliate of the Company.
Company policy prohibits trading in the securities of any company (i) with which the Company does business, such as
customers, channel partners, suppliers, and other business partners or (ii) that is involved in a potential transaction or business
relationship with the Company, such as potential acquisition targets (such companies, “Business Partners”), by persons who are
aware of material non-public information about such company acquired as a result of performing his or her duties at the Company.
You should also be aware that insider trading may include situations where, among other things, the individual trades in the
securities of other companies that are economically-linked to the Company (e.g., competitors) based on material non-public
information concerning the company or its securities obtained as a result of performing his or her duties at the Company.
For purposes of this policy, material information will be considered "non-public" until two full business days after it has been
publicly disclosed. Also, information is generally considered "material" if a reasonable investor would consider it important in making
an investment decision regarding the Company's stock. Company personnel should assume that information regarding the
following topics is "material" for purposes of this policy:
th
- 2 –
January 2025
Exhibit 19.1
•
earnings, sales figures and financial information,
•
significant mergers, acquisitions and joint ventures,
•
significant new products and technologies,
•
significant pending or threatened litigation, or the
resolution of such litigation,
•
significant changes in senior management,
•
significant developments regarding customers and
suppliers, such as contract awards or cancellations, or
regarding supplies or inventory,
•
dividends, stock splits and other important events
regarding the Company's securities,
•
anticipated changes in the Company’s credit ratings, and
•
significant cyber security breaches or operational
disruptions.
Information is “nonpublic” if it has not been disseminated to investors through a widely circulated news or wire service (such
as Business Wire, Dow Jones, Bloomberg, PR Newswire, etc.) or disclosed by the Company in a conference call open to the
general public or through a public filing with the Securities and Exchange Commission (the “SEC”). For the purposes of this policy,
information will be not considered public until after the close of trading on the second full business day following the Company’s
widespread public release of the information.
If you are uncertain as to whether a particular item of Company information should be considered "material," or whether it
has been “publicly disclosed,” contact the Legal Department.
Company personnel, and the family members sharing their household, may not at any time engage in “active trading” the
Company's securities or sell "short" the Company's securities. “Active trading” means a combination or pattern of substantial or
continuous buying and selling of the securities with the primary objective of realizing short-term gains.
This policy continues to apply to your transactions in the Company’s securities or the securities of Business Partners even
after your relationship with the Company has ended. If you are aware of material nonpublic information when your relationship with
the Company ends, you may not trade the Company’s securities or the securities of applicable Business Partners until the material
nonpublic information has been publicly disseminated or is no longer material. Further, if you leave the Company during a trading
blackout period, then you may not trade the Company’s securities or the securities of other applicable companies until the trading
blackout period has ended.
Company Transactions
From time to time, the Company and its subsidiaries may engage in transactions in company securities. It is the Company’s
policy to comply with all applicable securities laws when engaging in transactions in company securities.
Hedging Transactions.
The Company considers it inappropriate for any director, officer or other employee to enter into speculative transactions in
the Company’s securities. Therefore, directors, officers and other employees are prohibited from engaging in the purchase or sale
of puts, calls, options or other derivative securities based on the Company’s securities. Also prohibited are hedging or monetization
transactions, such as forward sale contracts, in which the stockholder continues to
33
Exhibit 19.1
own the underlying security without all the risks or rewards of ownership. Finally, directors, officers and other employees may not
purchase the Company’s securities on margin, borrow against any account in which our securities are held, or otherwise pledging
the Company’s securities as collateral for a loan. This does not include employee loans from Company savings plan accounts and
does not apply to the exercise of stock options granted by the Company.
Exceptions; Rule 10b5-1 Plans.
The restrictions contained in this policy do not apply to indirect periodic purchases of securities made pursuant to a standing
election to invest in Company securities under the Company's retirement or other benefit plans, or the Company's dividend
reinvestment plan, as long as the election is made at a time the director, officer or employee is not aware of material non-public
information. Changes to such elections are likewise excepted if made at a time the director, officer or employee is not aware of
material non-public information. In each instance, directors and officers may initiate the election or change only outside of the black-
out periods, and after the election or change has been cleared by the Legal Department.
Further, certain transactions may be exempt from the foregoing blackout rules if made pursuant to a plan established under
Rule 10b5-1 under the Securities Exchange Act of 1934. This policy is not intended to provide any analysis or guidance on Rule
10b5-1 plans, but you should contact the Legal Department if you would like to receive additional information.
Reporting of Violations.
Any director, officer, or employee who violates this Policy or any federal or state law governing insider trading or tipping, or
knows of any such violation by any other director, officer, or employee, must report the violation immediately to the Legal
Department. Upon determining that any such violation has occurred, the Legal Department, in consultation, where appropriate, with
the Chair of the Audit Committee of the Board, will determine whether the Company should release any material nonpublic
information, and, when required by applicable law, shall cause the Company to report the violation to the SEC or other appropriate
governmental authority.
Interpretation
This policy shall be administered by the Company’s Chief Legal Officer or their designees (each such person, a “compliance
officer”). In connection therewith, the compliance officers shall have the authority to construe and interpret the terms of the policy,
adopt rules and procedures relating to the operation and administration of the policy and adopt and approve non-material
amendments to the policy.
Amendments.
The Company is committed to continuously reviewing and updating its policies and procedures. The Company therefore
reserves the right to amend, alter or terminate this policy at any time and for any reason. A current copy of the Company’s policies
regarding insider trading may be obtained by contacting the Legal Department.
44
EXHIBIT 21.1
SUBSIDIARIES OF VISTEON CORPORATION AS OF DECEMBER 31, 2024*
Organization
Jurisdiction
Aeropuerto Sistemas Automotrices S.de R.L de C.V.
Mexico
Allgo Systems, Inc.
Delaware, U.S.A.
Altec Electronica Chihuahua, S.A. de C.V.
Mexico
ARS, Inc.
Delaware, U.S.A.
Autronic S.A.
Tunisia
Brasil Holdings Ltda.
Brazil
Carplastic S.A. de C.V.
Mexico
Changchun Visteon FAWAY Automotive Electronics Co., Ltd*.
China
Fairlane Holdings, Inc.
Delaware, U.S.A.
Grupo Visteon, S.de R.L. de C.V.
Mexico
Inntot Technologies Private Limited
India
Jember Engineering Solutions, SL
Spain
Jember GmbH
Germany
Shanghai Visteon Automotive Electronics Co. Ltd.*
China
Shanghai Visteon Electronics Technology Co. Ltd.*
China
SunGlas, LLC
Delaware, U.S.A.
Taiwan Visteon Automotive Electronics LLC
Taiwan
VEHC, LLC
Delaware, U.S.A.
VIHI, LLC
Delaware, U.S.A.
Visteon AC Holdings Corp.
Delaware, U.S.A.
Visteon Adminisztracios Hungary Kft
Hungary
Visteon Amazonas Ltda.
Brazil
Visteon Asia Holdings, LLC
Delaware, U.S.A.
Visteon Asia Pacific, Inc.
China
Visteon Automotive (India) Private Ltd.
India
Visteon Automotive Electronics (Chongqing) Co., Ltd.
China
Visteon Automotive Electronics (Thailand) Limited
Thailand
Visteon Automotive Holdings, LLC
Delaware, U.S.A.
Visteon Brasil Trading Company Ltd.
Bermuda
Visteon Canada Inc.
Canada
Visteon Caribbean, Inc.
Puerto Rico
Visteon Climate Control Systems Limited
Delaware, U.S.A.
Visteon Climate Holdings (Hong Kong), Ltd.
Hong Kong
Visteon Climate Holdings 1, LLC
Delaware, U.S.A.
Visteon de Mexico S. de R.L.
Mexico
Visteon Domestic Holdings, LLC
Delaware, U.S.A.
Visteon Electronics Bulgaria EOOD
Bulgaria
Visteon Electronics Corporation
Delaware, U.S.A.
Visteon Electronics France SAS
France
Visteon Electronics Germany GmbH
Germany
Visteon Electronics India Private Limited
India
Visteon Electronics Korea Ltd.
S. Korea
Visteon Electronics Romania S.R.L.
Romania
Visteon Electronics Slovakia, s.r.o.
Slovakia
Visteon Electronics Tunisia Sarl
Tunisia
Visteon Engineering Services Limited
United Kingdom
Visteon Engineering Services Pension Trustees Ltd
United Kingdom
Visteon EU Holdings, LLC
Delaware, U.S.A.
Visteon European Electronics, Inc.
Delaware, U.S.A.
Visteon European Holdings, LLC
Delaware, U.S.A.
Visteon Finance Limited
United Kingdom
Visteon Financial, LLC
Delaware, U.S.A.
Visteon German Holdings, LLC
Delaware, U.S.A.
Visteon Global Electronics, Inc.
Delaware, U.S.A.
Visteon Global Technologies, Inc.
Michigan, U.S.A.
Visteon Global Treasury, Inc.
Delaware, U.S.A.
Visteon Holdings France SAS
France
Visteon Holdings GmbH
Germany
Visteon Holdings Hungary Kft
Hungary
Visteon Holdings, LLC
Delaware, U.S.A.
Visteon Innovation & Technology GmbH
Germany
Visteon International Business Development, Inc.
Delaware, U.S.A.
Visteon International Holdings (Hong Kong), Ltd.
Hong Kong
Visteon International Holdings, Inc.
Delaware, U.S.A.
Visteon Japan, Ltd.
Japan
Visteon LA Holdings Corp.
Delaware, U.S.A.
Visteon Netherland Holdings Cooperatief I U.A.
Netherlands
Visteon Portuguesa, Ltd.
Bermuda
Visteon S.A.
Argentina
Visteon Sistemas Automotivos Ltda.
Brazil
Visteon Software Technologies SAS
France
Visteon Systems, LLC
Delaware, U.S.A.
Visteon Technical & Services Centre Private Limited
India
Visteon Trading (Chongqing) Co. Ltd.
China
Yanfeng Visteon Automotive Electronics Co., Ltd.*
China
*Entity is a joint venture
_____________
Subsidiaries not shown by name in the above list, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary.
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-240184 and No. 333-281005 on Form S-8 of our report dated
February 18, 2025, relating to the financial statements of Visteon Corporation and the effectiveness of Visteon Corporation's internal control
over financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2024.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 18, 2025
Exhibit 24.1
VISTEON CORPORATION
Certificate of Secretary
The undersigned, Heidi A. Sepanik, Secretary of VISTEON CORPORATION, a Delaware corporation (the "Company"), DOES
HEREBY CERTIFY that the following resolutions were adopted by the Board of Directors of the Company on February 6, 2025, and
that the same are in full force and effect:
BE IT HEREBY RESOLVED, that preparation of the Annual Report on Form 10-K of the Company for the year ended December
31, 2024 (the "10-K Report"), including exhibits and other documents, to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Exchange Act of 1934, as amended, be and hereby is in all respects authorized and approved;
that the draft 10-K Report be and hereby is approved in all respects; that the directors and appropriate officers of the Company, and
each of them, be and hereby are authorized to sign and execute in their own behalf, or in the name and on behalf of the Company,
or both, as the case may be, the 10-K Report, and any and all amendments thereto, with such changes therein as such directors
and officers may deem necessary, appropriate or desirable, as conclusively evidenced by their execution thereof; and that the
appropriate officers of the Company, and each of them, be and hereby are authorized to cause the 10-K Report and any such
amendments, so executed, to be filed with the Commission.
FURTHER RESOLVED, that each officer and director who may be required to sign and execute the 10-K Report or any
amendment thereto or document in connection therewith (whether in the name and on behalf of the Company, or as an officer or
director of the Company, or otherwise), be and hereby is authorized to execute a power of attorney appointing J. J. Rouquet, B. D.
Pynnonen and C. E. Myers, and each of them, severally, his or her true and lawful attorney or attorneys to sign in his or her name,
place and stead, in any such capacity, the 10-K Report and any and all amendments thereto and documents in connection
therewith, and to file the same with the Commission, each of said attorneys to have power to act with or without the other, and to
have full power and authority to do and perform in the name and on behalf of each of said officers and directors who shall have
executed such power of attorney, every act whatsoever which such attorneys, or any of them, may deem necessary, appropriate or
desirable to be done in connection therewith as fully and to all intents and purposes as such officers or directors might or could do
in person.
WITNESS my hand as of this 18 day of February, 2025.
/s/ Heidi A. Sepanik
Heidi A. Sepanik
Secretary
(SEAL)
th
POWER OF ATTORNEY WITH RESPECT TO
ANNUAL REPORT ON FORM 10-K OF
VISTEON CORPORATION FOR
THE YEAR ENDED DECEMBER 31, 2024
Each of the undersigned, a director or officer of VISTEON CORPORATION, appoints each of J. J. Rouquet, B. D. Pynnonen and
C. E. Myers as his or her true and lawful attorney and agent to do any and all acts and things and execute any and all instruments
which the attorney and agent may deem necessary or advisable in order to enable VISTEON CORPORATION to comply with the
Securities Exchange Act of 1934, and any requirements of the Securities and Exchange Commission, in connection with the Annual
Report on Form 10-K of VISTEON CORPORATION for the year ended December 31, 2024, and any and all amendments thereto,
including, but not limited to, power and authority to sign his or her name (whether on behalf of VISTEON CORPORATION, or as a
director or officer of VISTEON CORPORATION, or by attesting the seal of VISTEON CORPORATION, or otherwise) to such
instruments and to such Annual Report and any amendments thereto, and to file them with the Securities and Exchange
Commission. The undersigned ratifies and confirms all that any of the attorneys and agents shall do or cause to be done by virtue
hereof. Any one of the attorneys and agents shall have, and may exercise, all the powers conferred by this instrument.
Each of the undersigned has signed his or her name as of the 18 day of February, 2025
Signature/Name
Position
/s/Sachin S. Lawande
Sachin S. Lawande
Director, President and Chief Executive Officer
(Principal Executive Officer)
/s/Jerome J. Rouquet
Jerome J. Rouquet
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/Colleen E. Myers
Colleen E. Myers
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
/s/James J. Barrese
James J. Barrese
Director
/s/Naomi M. Bergman
Naomi M. Bergman
Director
/s/Jeffrey D. Jones
Jeffrey D. Jones
Director
/s/ Bunsei Kure
Bunsei Kure
Director
/s/Joanne M. Maguire
Joanne M. Maguire
Director
/s/Robert J. Manzo
Robert J. Manzo
Director
/s/Francis M. Scricco
Francis M. Scricco
Director
/s/David L. Treadwell
David L. Treadwell
Director
th
Exhibit 31.1
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)
I, Sachin S. Lawande, certify that:
1. I have reviewed this Annual Report on Form 10-K of Visteon Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Exhibit 31.1
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 18, 2025
/s/ Sachin S. Lawande
Sachin S. Lawande
President and Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)
I, Jerome J. Rouquet, certify that:
1. I have reviewed this Annual Report on Form 10-K of Visteon Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f))for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
EXHIBIT 31.2
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 18, 2025
/s/ Jerome J. Rouquet
Jerome J. Rouquet
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SS.1350
AND EXCHANGE ACT RULE 13a-14(b)
Solely for the purposes of complying with 18 U.S.C. ss.1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), I, the undersigned President and Chief Executive Officer of Visteon Corporation (the "Company"),
hereby certify, based on my knowledge, that the Annual Report on Form 10-K of the Company for the year ended December 31,
2024 (the "Report") fully complies with the requirements of Section 13(a) of the Exchange Act and that information contained in the
Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
_/s/Sachin S. Lawande__
Sachin S. Lawande
February 18, 2025
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SS.1350
AND EXCHANGE ACT RULE 13a-14(b)
Solely for the purposes of complying with 18 U.S.C. ss.1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), I, the undersigned Chief Financial Officer of Visteon Corporation (the "Company"), hereby certify,
based on my knowledge, that the Annual Report on Form 10-K of the Company for the year ended December 31, 2024 (the
"Report") fully complies with the requirements of Section 13(a) of the Exchange Act and that information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/Jerome J. Rouquet
Jerome J. Rouquet
February 18, 2025