Visteon Posts Big Loss In Q4 and 2001
DEARBORN, Mich., Jan. 18 Visteon Corporation today announced a Fourth Quarter loss of $14 million or $0.11 per share -- in line with consensus expectations. In the Fourth Quarter 2000, Visteon incurred a loss of $87 million or $0.67 per share. The Fourth Quarter 2000 results included a non-cash impairment charge related to our Glass business of $138 million or $1.06 per share, and a gain of about $20 million or $0.16 per share on the sale of Visteon's interest in Conixshare. Excluding previously disclosed restructuring charges of $121 million or $0.93 per share, Visteon posted earnings of $3 million or $0.02 per share for full year 2001. In 2000, the company earned $270 million or $2.08 per share. Excluding the effect of the Glass impairment charge, the company earned $408 million or $3.14 per share in 2000.
``2001 was a tough year. We had solid operating performance in the First Half, but major production cuts and erratic production schedules by our largest customers led to weaker financial performance in the Second Half,'' said Peter J. Pestillo, Visteon Chairman and Chief Executive Officer. ``Restructuring and other actions taken early in the year helped offset the impact of a weaker economic environment and allowed us to maintain a solid financial position. I'm also pleased that we've put a strong management team in place that will help drive breakeven down and position us for growth when the economy recovers.''
Fourth Quarter 2001 sales were $4.5 billion, down $36 million compared with the same period last year, as business with non-Ford customers partially offset the decline in Ford revenue associated with lower North American production. Non-Ford sales during the quarter increased to $822 million or 18 percent of total sales.
Full year 2001 sales were $17.8 billion, down more than $1.6 billion compared with 2000. Lower North American production at Ford more than accounted for the decline -- sales to Ford were down $1.8 billion or 11 percent during the year. Sales to non-Ford customers increased $168 million or 6 percent to $3.2 billion. For the year, sales to non-Ford customers represented 18 percent of total sales, an increase of 2 percentage points.
Visteon ended the year with $1.2 billion in cash and marketable securities, down $296 million from the end of 2000, but up $203 million from the end of the Third Quarter. The improvement during the quarter was driven largely by lower inventory levels, which reflected the company's stepped-up focus on cash management.
For 2001, Visteon won $1.5 billion in net new business from 13 global automakers in every region of the world. More than 75 percent of the wins were with customers other than Ford and 40 percent were outside North America.
Recent announcements include new business wins with DaimlerChrysler on Mercedes-Benz trucks and substantial systems on new vehicles including the Renault Clio, Ford Thunderbird and Ford Fiesta.
Visteon filled out its Operations Executive Team with the addition of two regional presidents in North America/Asia and Europe/South America; a vice president of materials management and quality; a vice president of treasury; and a vice president and general manager of Asia. The company also implemented a customer-facing organization and took restructuring actions that resulted in the elimination of more than 2,000 salaried positions and the voluntary separation of 245 master agreement UAW employees. During the year, Visteon also reduced its master agreement UAW work force by an additional 1,133 employees, resulting in a total reduction of 5.7 percent during the year. The company continued its strong record of cost reductions and announced new measures to consolidate its supply base and improve operating margins.
Visteon Corporation is a leading full-service supplier that delivers consumer-driven technology solutions to automotive manufacturers worldwide and through multiple channels within the global automotive aftermarket. Visteon has about 80,000 employees and a global delivery system of more than 160 technical, manufacturing, sales, and service facilities located in 25 countries.
This press release contains forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as ``estimated'' and ``potentially'' signify forward-looking statements. Forward- looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in our Current Reports on Form 8-K filed with the Securities and Exchange Commission on February 27, 2001 and January 8, 2002. Should any risks and uncertainties develop into actual events, these developments could have material adverse effects on Visteon's business, financial condition and results of operations.
Additional financial detail is available at www.visteon.com
VISTEON CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL DATA
(in millions, except per share amounts, percentages and as noted)
2001
over/(under)
2001 2000
Fourth Full Fourth Full
Quarter Year Quarter Year
Sales
Ford and affiliates $3,671 $14,656 $(55) $(1,792)
Other customers 822 3,187 19 168
Total sales $4,493 $17,843 $(36) $(1,624)
Depreciation and amortization
Depreciation* $138 $562 $(1) $(23)
Amortization 26 104 2 13
Total depreciation and
amortization $164 $666 $1 $(10)
Selling, administrative and
other expenses**
Amount $186 $731 $(43) $(50)
Percent of revenue 4.1% 4.1% (1.0) pts 0.1 pts
Income (loss) before income taxes
As reported $(21) $(169) $125 $(608)
Excluding restructuring
costs** (21) 23 (95) (636)
Net income (loss)
As reported $(14) $(118) $73 $(388)
Excluding restructuring
costs** (14) 3 (65) (405)
Earnings (loss) per share
(basic and diluted)
As reported $(0.11) $(0.91) $0.56 $(2.99)
Excluding restructuring
costs** (0.11) 0.02 (0.50) (3.12)
Cash dividends per share $0.06 $0.24 $ - $0.12
Effective tax rate 38% 37% 1 pts - pts
EBITDA, as adjusted* **
Amount $152 $741 $(58) $(596)
Percent of revenue 3.4% 4.2% (1.2) pts (2.7) pts
After tax returns**
On sales (0.2)% 0.1% (1.5) pts (2.1) pts
On assets (0.4) 0.2 (2.5) (3.5)
On equity (1.7) 0.1 (7.5) (16.2)
Capital expenditures
Amount $236 $752 $(54) $(41)
Percent of revenue 5.3% 4.2% (1.1) pts 0.1 pts
Operating cash flow*** $162 $(222) $56 $(447)
Cash and borrowing
(at end of period)
Cash and marketable
securities $1,181 $(296)
Borrowing 1,922 (97)
- - - - -
- Full year 2001 depreciation and EBITDA amounts reflect a reclassification of $8 million made to the third quarter of 2001 depreciation and EBITDA amounts previously reported, which did not impact reported net income.
- Full year 2001 amounts exclude costs related to restructuring items of $192 million ($121 million after-tax), of which $81 million was recorded as selling, administrative and other expense. Fourth quarter of 2000 and year- to-date 2000 comparative amounts have been adjusted to exclude an asset impairment charge of $220 million ($138 million after-tax).
- Includes capital expenditures and excludes restructuring/independence actions.
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share amounts)
For the Years Ended
December 31, Fourth Quarter
2001 2000 1999 2001 2000
Sales
Ford and affiliates $14,656 $16,448 $17,105 $3,671 $3,726
Other customers 3,187 3,019 2,261 822 803
Total sales 17,843 19,467 19,366 4,493 4,529
Costs and expenses
Costs of sales 17,148 18,025 17,503 4,319 4,253
Selling,
administrative and
other expenses 812 781 674 186 229
Asset impairment charge - 220 - - 220
Total costs and
expenses 17,960 19,026 18,177 4,505 4,702
Operating income (loss) (117) 441 1,189 (12) (173)
Interest income 55 109 79 9 36
Interest expense 131 167 143 26 40
Net interest expense (76) (58) (64) (17) (4)
Equity in net income of
affiliated companies 24 56 47 8 31
Income (loss) before
income taxes (169) 439 1,172 (21) (146)
Provision (benefit) for
income taxes (72) 143 422 (11) (66)
Income (loss) before
minority interests (97) 296 750 (10) (80)
Minority interests in
net income of subsidiaries 21 26 15 4 7
Net income (loss) $(118) $270 $735 $(14) $(87)
Average number of shares
of Common Stock
outstanding 131 130 130 130 130
Earnings (loss) and dividends per share
Basic and diluted $(0.91) $2.08 $5.65 $(0.11) $(0.67)
Cash dividends $0.24 $0.12 $ - $0.06 $0.06
As previously disclosed in our Form 8-K dated January 8, 2002, Visteon has been working with Ford to resolve a number of outstanding commercial issues. Visteon's supply agreement and related pricing letter with Ford Motor Company require Visteon to provide Ford with productivity price adjustments for 2001, 2002 and 2003. Ford is requesting an adjustment that exceeds Visteon's reserves by approximately $125 million before taxes. Visteon's position is that its competitors generally are not giving Ford productivity price adjustments for 2001 at levels commensurate with Ford's request of Visteon. As provided by the supply agreement, an audit will be conducted to confirm that the productivity price adjustment finally paid to Ford is consistent with amounts given by Visteon competitors. There also remains a significant difference of opinion between Visteon and Ford under the supply agreement and related pricing letter with respect to the pricing and sourcing of products supplied to Ford of Europe. The amount in dispute in this regard for 2001 is approximately $50 million before taxes, representing a unilateral reduction in prices assessed by Ford of Europe. Visteon intends to pursue resolution of this dispute through mediation and arbitration, if necessary, as specified in the supply agreement.
Although the outcome of these matters is not fully predictable, we believe our established reserves are adequate. The final amounts, however, could differ materially from the recorded estimates. Our reported results of operations and financial position as of and for the year ended December 31, 2001, as presented, may be adjusted to the extent these matters reach resolution prior to our filing of our 2001 Annual Report on Form 10-K.
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
December 31,
2001 2000
Assets
Cash and cash equivalents $1,024 $1,412
Marketable securities 157 65
Total cash and marketable securities 1,181 1,477
Accounts receivable - Ford and affiliates 1,560 1,333
Accounts receivable - other customers 834 857
Total receivables 2,394 2,190
Inventories 858 948
Deferred income taxes 167 192
Prepaid expenses and other current assets 153 198
Total current assets 4,753 5,005
Equity in net assets of affiliated companies 158 142
Net property 5,329 5,497
Deferred income taxes 322 100
Other assets 516 581
Total assets $11,078 $11,325
Liabilities and Stockholders' Equity
Trade payables $1,831 $1,949
Accrued liabilities 945 1,086
Income taxes payable 30 65
Debt payable within one year 629 622
Total current liabilities 3,435 3,722
Long-term debt 1,293 1,397
Other liabilities 3,046 2,683
Deferred income taxes 13 18
Total liabilities 7,787 7,820
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, 130 million
and 131 million shares outstanding,
respectively 131 131
Capital in excess of par value of stock 3,311 3,311
Accumulated other comprehensive income (231) (179)
Other (25) (12)
Earnings retained for use in business 105 254
Total stockholders' equity 3,291 3,505
Total liabilities and stockholders' equity $11,078 $11,325
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
For the Years Ended
December 31,
2001 2000 1999
Cash and cash equivalents at January 1 $1,412 $1,849 $542
Cash flows provided by (used in)
operating activities 436 (526) 2,482
Cash flows from investing activities
Capital expenditures (752) (793) (876)
Acquisitions and investments in
joint ventures, net (7) (28) (579)
Purchases of securities (346) (126) -
Sales and maturities of securities 260 61 -
Other 102 44 2
Net cash used in investing activities (743) (842) (1,453)
Cash flows from financing activities
Cash distributions from (to) prior owner - 85 (558)
Commercial paper issuances, net 8 352 -
Payments on short-term debt (1) (1,775) -
Proceeds from issuance of short-term debt 1 1,374 493
Proceeds from issuance of other debt 114 1,279 816
Principal payments on other debt (144) (290) (361)
Purchase of treasury stock (25) - -
Cash dividends (31) (16) -
Other 3 (85) (100)
Net cash (used in) provided by
financing activities (75) 924 290
Effect of exchange rate changes on cash (6) 7 (12)
Net (decrease) increase in cash
and cash equivalents (388) (437) 1,307
Cash and cash equivalents at December 31 $1,024 $1,412 $1,849