Visteon Announces Second-Quarter 2015 Results

VISTEON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ¹ (Dollars in Millions) (Unaudited)
	Three Months Ended				Six Months Ended
	June 30				June 30
	2015		2014		2015		2014
OPERATING
Net income (loss)	$	2,224	$	(141)	$	2,294	$	(93)
Adjustments to reconcile net income to net cash provided from operating activities:
Gain on Climate Transaction	(2,332)		—		(2,332)		—
Gain on sale of non-consolidated affiliates	(62)		(2)		(62)		(2)
Asset impairments and losses on divestitures	2		173		16		173
Depreciation and amortization	59		64		127		130
Loss on debt extinguishment	5		23		5		23
Equity in net income of non-consolidated affiliates, net of dividends remitted	—		7		(2)		5
Non-cash stock-based compensation	3		3		6		6
Other non-cash items	3		7		3		7
Changes in assets and liabilities:
Accounts receivable	44		12		(18)		(78)
Inventories	(3)		—		(32)		(18)
Accounts payable	(78)		(110)		32		21
Accrued income taxes	141		10		142		12
Other assets and other liabilities	25		(15)		25		(59)
Net cash provided from operating activities	31		31		204		127
INVESTING
Capital expenditures	(67)		(75)		(122)		(127)
Loan to non-consolidated affiliate	—		—		(10)		—
Proceeds from Climate Transaction	2,664		—		2,664		—
Proceeds from sale of non-consolidated affiliates	91		25		91		58
Other business divestitures and acquisitions	(16)		(7)		(24)		(7)
Other	2		6		5		5
Net cash provided from (used by) investing activities	2,674		(51)		2,604		(71)
FINANCING
Short-term debt, net	4		39		(6)		35
Proceeds from issuance of debt, net of issuance costs	—		590		—		590
Principal payments on debt	(247)		(3)		(250)		(4)
Repurchase of long-term notes	—		(419)		—		(419)
Repurchase of common stock	(500)		(500)		(500)		(500)
Dividends paid to non-controlling interests	(28)		(29)		(31)		(45)
Exercised warrants and stock options	9		8		19		9
Other	(1)		(2)		(1)		(2)
Net cash used by financing activities	(763)		(316)		(769)		(336)
Effect of exchange rate changes on cash and equivalents	8		7		(9)		2
Net increase (decrease) in cash and equivalents	1,950		(329)		2,030		(278)
Cash and equivalents at beginning of period	907		1,728		827		1,677
Cash and equivalents at end of period	$	2,857	$	1,399	$	2,857	$	1,399

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

VISTEON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited, Dollars in Millions)

Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the Company's performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. The Company defines Adjusted EBITDA as net income attributable to the Company, plus net interest expense, provision for income taxes and depreciation and amortization, as further adjusted to eliminate the impact of discontinued operations, equity in net income of non-consolidated affiliates, net income attributable to non-controlling interests, asset impairments, gains or losses on divestitures, net restructuring expenses and other reimbursable costs, non-cash stock-based compensation expense, certain employee charges and benefits, reorganization items and other non-operating gains and losses. Because not all companies use identical calculations, this presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

									Electronics &
	Three Months Ended				Six Months Ended				Corp Only
	June 30				June 30				Estimated
	2015		2014		2015		2014		Full Year 2015 *
Electronics	$	75	$	50	$	170	$	107
Other	—		(3)		(6)		(4)
Corporate	(15)		(18)		(26)		(31)
Adjusted EBITDA	60		29		138		72		$245 - $265
Interest expense, net	6		5		11		11		15
Provision (benefit) for income taxes	24		(2)		33		11		55
Depreciation and amortization	21		16		42		29		85
Restructuring expense	12		13		15		14		20
Gain on sale of non-consolidated affiliates	(62)		(2)		(62)		(2)		0
Loss on debt extinguishment	5		23		5		23		5
Non-cash, stock-based compensation expense	2		3		5		6		11
Equity in net income of non-consolidated affiliates	(12)		(7)		(11)		(7)		0
Net income attributable to non-controlling interests	16		14		36		43		20
Other (income) expense, net	(4)		16		8		22		50
Other	3		1		3		1		3
(Income) loss from discontinued operations, net of tax	(2,159)		104		(2,205)		57		0
Net income (loss) attributable to Visteon	$	2,208	$	(155)	$	2,258	$	(136)	$(19) - $1

* Guidance excludes the other product group and discontinued operations.

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

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

									Electronics &
	Three Months Ended				Six Months Ended				Corp Only
	June 30				June 30				Estimated
	2015		2014		2015		2014		Full Year 2015 *
Cash provided from operating activities	$	31	$	31	$	204	$	127	$60 - $100
Capital expenditures	(67)		(75)		(122)		(127)		100
Free cash flow	$	(36)	$	(44)	$	82	$	—	$(40) - $0
Restructuring/transformation-related payments	69		26		90		46		80
Adjusted free cash flow	$	33	$	(18)	$	172	$	46	$40 - $80

* Guidance excludes the other product group and discontinued operations.

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

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

	Three Months Ended				Six Months Ended
	June 30				June 30
	2015		2014		2015		2014
Diluted earnings (loss) per share:
Net income (loss) attributable to Visteon	$	2,208	$	(155)	$	2,258	$	(136)
Average shares outstanding, diluted (in millions)	44.4		46.2		44.9		47.1
Diluted earnings (loss) per share	$	49.73	$	(3.35)	$	50.29	$	(2.89)

Adjusted earnings (loss) per share:
Net income (loss) attributable to Visteon	$	2,208	$	(155)	$	2,258	$	(136)
Restructuring expense	12		13		15		14
Loss on debt extinguishment	5		23		5		23
Gain on sale of non-consolidated affiliates	62		2		62		2
Other (income) expense, net	(4)		16		8		22
Other	17		14		32		34
Income (loss) from discontinued operations, net of tax	2,159		(104)		2,205		(57)
Adjusted net income	$	17	$	13	$	51	$	12
Average shares outstanding, diluted (in millions)	44.4		46.2		44.9		47.1
Adjusted earnings per share	$	0.38	$	0.28	$	1.14	$	0.25

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

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SOURCE Visteon Corporation

Contact:

Visteon Corporation
Media: Jim Fisher, 734-710-5557, 734-417-6184 - mobile
Email Contact Investors: Bob Krakowiak, 734-710-5793
Email Contact
Web: http://www.visteon.com

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