Visteon Announces Fourth Quarter and Fiscal Year 2000
Results
DEARBORN, Mich., Jan. 19 Visteon Corporation
today announced that it earned $270 million, or $2.08 per share in 2000. This
compares with earnings of $735 million in 1999. Full year revenue in 2000 was
$19.5 billion, up 1 percent compared with 1999; after-tax return on sales was
1.5 percent.
The earnings decline compared with 1999 was more than accounted for by the
effects of a one-time price realignment of 5 percent that resulted from
Visteon's separation from Ford Motor Company, other independence-related
costs, and a non-cash impairment charge related to Visteon's Glass business.
Visteon's full year 2000 earnings, excluding the Glass impairment charge, were
up $127 million from 1999 pro forma results, which are adjusted for the
one-time price realignment and independence costs.
In fourth quarter 2000, Visteon incurred a loss of $87 million. This
included the Glass impairment charge of $138 million, and a gain of about
$20 million on the sale of Visteon's interest in Conix. In the fourth quarter
of 1999, Visteon earned $95 million. Revenue for fourth quarter 2000 was
$4.5 billion.
Despite deteriorating industry volume in the second half of 2000, Visteon
ended the year in a strong financial position. Cash and marketable securities
totaled almost $1.5 billion at year-end and the company met the operating
milestones it established in January 2000 with respect to earnings, new
business, cost reduction, operating cash flow, and quality.
"We've achieved all our milestones and ended the year with a very strong
balance sheet," said Visteon Chairman and Chief Executive Officer Peter J.
Pestillo. "We have instituted structure and cost initiatives that should
significantly increase our ability to win new business and strengthen
profitability going forward."
Milestones Visteon achieved in 2000 included:
Earnings
Excluding the one-time Glass impairment charge, Visteon's 2000 earnings
were $408 million, up 45 percent compared with 1999 pro forma levels.
Visteon's milestone was to improve by 35 percent before any major unusual
factors.
New Business
Visteon exceeded its milestone of securing $2.5 billion in new business in
2000. The company won a record $2.6 billion in annual new business from
customers including Ford, General Motors, PSA, Hyundai, Volkswagen,
DaimlerChrysler, Renault, Honda, and Fiat. Of that new business,
37 percent was non-Ford and 31 percent was outside of North America.
Cost Reduction
Visteon ended the year with total cost savings of $590 million in 2000,
which exceeded the milestone by $140 million. This performance reflected a
strong year-to-year improvement in the fourth quarter.
Operating Cash Flow
Visteon's operating cash flow adjusted for acquisitions, dividends, and
independence actions totaled $225 million last year. This exceeded Visteon's
milestone, which was to achieve a positive cash flow in 2000.
Quality
Data through October 2000 indicates Visteon has improved year-to-date
quality by 63 percent. Based on this, the company is confident it will exceed
its milestone of 30 percent improvement when year-end data becomes available.
To accelerate further progress, the company already has more than 100
employees working toward certification as Six-Sigma Black Belts to work on
projects that will help increase customer satisfaction and reduce defects and
costs.
New products included Visteon's in-car computing platform (ICES), Driver
Vision at Night, Reconfigurable Projected Image Display (RPID), MACH(R) MP3
music system, the next generation NavMate(R) with enhancements in mobile route
guidance technology, and the first factory-installed DVD Rear Seat
Entertainment system, which will be featured on three new GM mid-sized SUVs.
Visteon has more than two-dozen partnerships, teaming with some of the world's
leading consumer and technology companies. Recently announced partnerships
include Microsoft, Agere, Raytheon, and Kayaba.
Visteon Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
For the Years Ended
December 31,
2000 1999 1998
(in millions, except
per share amounts)
Sales
Ford and affiliates $16,448 $17,105 $16,350
Other customers 3,019 2,261 1,412
Total sales 19,467 19,366 17,762
Costs and expenses
Costs of sales 18,025 17,503 15,969
Selling, administrative and other expenses 781 674 659
Asset impairment charge 220 - -
Total costs and expenses 19,026 18,177 16,628
Operating income 441 1,189 1,134
Interest income 109 79 38
Interest expense 167 143 82
Net interest expense (58) (64) (44)
Equity in net income of affiliated companies 56 47 26
Income before income taxes 439 1,172 1,116
Provision for income taxes 143 422 416
Income before minority interests 296 750 700
Minority interests in net income/(loss) of
subsidiaries 26 15 (3)
Net income $270 $735 $703
Average number of shares of Common Stock
outstanding 130 130 130
Earnings and dividends per share
Basic and diluted $2.08 $5.65 $5.41
Cash dividends $0.12 $- $-
Visteon Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEET
December 31,
2000 1999
(in millions)
Assets
Cash and cash equivalents $1,412 $1,849
Marketable securities 65 -
Total cash and marketable securities 1,477 1,849
Accounts and notes receivable - Ford and affiliates 1,333 1,578
Accounts receivable - other customers 857 613
Total receivables 2,190 2,191
Inventories 948 751
Deferred income taxes 192 110
Prepaid expenses and other current assets 198 295
Total current assets 5,005 5,196
Equity in net assets of affiliated companies 142 205
Net property 5,497 5,789
Deferred income taxes 100 362
Other assets 581 897
Total assets $11,325 $12,449
Liabilities and Stockholders' Equity
Trade payables $1,949 $3,150
Accrued liabilities 1,086 1,211
Income taxes payable 147 153
Debt payable within one year 622 961
Total current liabilities 3,804 5,475
Long-term debt 1,397 1,358
Other liabilities 2,601 3,964
Deferred income taxes 18 153
Total liabilities 7,820 10,950
Stockholders' equity
Capital stock
Preferred Stock, par value $1.00, 50 million shares
authorized, none outstanding - -
Common Stock, par value $1.00, 500 million shares
authorized, 131 million shares issued and outstanding 131 -
Capital in excess of par value of stock 3,311 -
Prior owner's net investment - 1,566
Accumulated other comprehensive income (179) (67)
Other (12) -
Earnings retained for use in business 254 -
Total stockholders' equity 3,505 1,499
Total liabilities and stockholders' equity $11,325 $12,449
Visteon Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Years Ended
December 31,
2000 1999 1998
(in millions)
Cash and cash equivalents at January 1 $1,849 $542 $344
Cash flows (used in)/provided by operating
activities (526) 2,482 1,376
Cash flows from investing activities
Capital expenditures (793) (876) (861)
Acquisitions and investments in joint ventures,
net (28) (579) (108)
Purchases of securities (126) - -
Sales and maturities of securities 61 - -
Other 44 2 29
Net cash used in investing activities (842) (1,453) (940)
Cash flows from financing activities
Cash distributions from/(to) prior owner 85 (558) (267)
Commercial paper issuances, net 352 - -
Changes in short-term debt (1,775) - -
Proceeds from issuance of short-term debt 1,374 493 34
Proceeds from issuance of other debt 1,279 816 96
Principal payments on other debt (290) (361) (149)
Cash dividends (16) - -
Other (85) (100) 52
Net cash provided by/(used in) financing
activities 924 290 (234)
Effect of exchange rates changes on cash 7 (12) (4)
Net (decrease)/increase in cash and cash
equivalents (437) 1,307 198
Cash and cash equivalents at December 31 $1,412 $1,849 $542
