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What changed in VISTEON CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of VISTEON CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+197 added−186 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-20)

Top changes in VISTEON CORP's 2024 10-K

197 paragraphs added · 186 removed · 154 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeBattery electric vehicles can have increased digital content with all-digital cockpit electronics and require a battery management system to manage the rechargeable battery pack. • Advanced driver assistance systems and autonomous driving - The industry continues to advance toward semi-autonomous and autonomous vehicles.
Biggest changeConsumer 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.
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 4 inputs to deliver a set of advance driver assistance features.
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.
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 Company that its business would be materially affected by the expiration or termination thereof.
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 7 Company that its business would be materially affected by the expiration or termination thereof.
As stated in one of the Company's four core beliefs and values, “We treat each other with respect and embrace our differences.” 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.
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.
The Company’s Product Research and Development 7 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 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.
As vehicles become more connected and cockpits more digitized, suppliers that can deliver modular hardware 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.
As vehicles become more connected and cockpits more digitized, suppliers that can deliver modular hardware 3 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 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. Battery Management Systems (“BMS”) The Company offers configurable battery management systems that support both wired and wireless battery sensing and control.
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. 4 Battery Management Systems (“BMS”) The Company offers configurable battery management systems that support both wired and wireless battery sensing and control.
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. The Company’s Competition The automotive sector remains highly competitive resulting from the ongoing industry consolidation.
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.
Suppliers that can provide fully 3 engineered systems and pre-assembled combinations of component parts are positioned to leverage the trend toward system sourcing.
Suppliers that can provide fully engineered systems and pre-assembled combinations of component parts are positioned to leverage the trend toward system sourcing.
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.
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.
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 helps it to better serve its customers and the communities in which it operates.
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.
Because retention of the employee base is significant to its business strategy, executive management discusses it with the Board of Directors on a regular basis. Workforce Visteon’s strength comes from a workforce of approximately 10,000 employees operating in approximately 17 countries globally.
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.
In light of the continued importance of these matters, the Board of Directors and management have developed a multi-year road map to enhance the Company’s sustainability and social responsibility programs and disclosures, including assessment of the potential risks associated with climate change.
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.
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, 2023 2022 2021 Ford 22 % 22 % 22 % General Motors 12 % 9 % 7 % The Company typically supplies products to OEM customers through purchase orders, which are usually governed by general terms and conditions established by each OEM.
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.
This road map 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 2 emissions through the use of renewable energy.
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 2 emissions through the use of renewable energy.
The Electronics segment provides vehicle cockpit electronics products to customers, including digital instrument clusters, domain controllers with integrated advanced driver assistance systems ("ADAS") 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 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 workforce is globally distributed with 28% of employees located in the Americas, 30% in Europe, 14% in China, and 28% in the Asia Pacific region. Visteon believes that all employees are leaders and expects leaders to drive operational and financial results and build strong teams.
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.
The Company’s International Operations Financial information about sales and net property by major geographic region can be found in Note 19, "Revenue recognition and Geographical Information" to the Company's consolidated financial statements included in Part II, Item 8 of this Form 10-K.
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.
Further details are provided in Part II, Item 8 of this Form 10-K in Note 18, "Commitments and Contingencies," of the notes to consolidated financial statements.
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.
Visteon products align with key industry trends and include digital instrument clusters, domain controllers with integrated advanced driver assistance systems ("ADAS"), displays, Android-based infotainment systems, and battery management systems.
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.
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 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.
The Company’s longer term greenhouse gas (GHG) emission reduction target for 2030 which includes scope 3 CO 2 emissions, has been validated by the Science Based Targets initiative (SBTi) and the Company is working to be carbon neutral by 2040.
The Company’s longer term greenhouse gas ("GHG") emission reduction target for 2030 which includes scope 3 CO 2 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.
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. 5 The price related to these products are typically initially negotiated on an annual basis over the vehicle platform's life cycle.
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.
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.
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.
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.
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.
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. 8 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.
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.
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, 2023, the percentage of Visteon's global workforce represented by females was approximately 39%.
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.
Management provides regular reports and presentations to the Corporate Sustainability and Governance Committee regarding progress toward achieving these targets, and the full Board of Directors has oversight of the Company’s environmental and social initiatives as part of its strategic review of the Company’s operations, products and technologies.
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 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 - The electronic content of vehicles continues to increase due to various regulatory requirements and consumer demand for increased vehicle performance and functionality.
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.
Consequently, 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. • Electric vehicles – The trend towards electrification continues, driven by government incentives and standards, announced restrictions of internal combustion engine vehicles in multiple cities and countries, and the significant investments in electrification by Original Equipment Manufacturers ("OEMs").
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.
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. • 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.
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.
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The use of electronic components can reduce weight, expedite assembly, enhance fuel economy, improve emissions, increase safety, and enhance vehicle performance. These benefits coincide with vehicles becoming more electric, connected, and automated. Additionally, digital and portable technologies have dramatically influenced the lifestyle of today’s consumers, who expect products that enable such a lifestyle.
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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.
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Level three includes features such as highway pilot and parking assist technology, for which an increased market penetration rate is expected over the next several years. • Safety and security - Governments continue to focus regulatory efforts on safer transportation. Accordingly, OEMs are working to improve occupant and pedestrian safety by incorporating more safety-oriented technology in their vehicles.
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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.
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Telematics Solutions The Company provides a cost-optimized, high-speed telematics control unit to enable secure connected car services, software updates, and data. The Company’s telematics solution uses a single hardware and flexible software architecture to support regional telematics service providers and mobile networks. The Company’s wireless gateway platform is designed to meet future connectivity requirements.
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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.
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Body Domain Controller The Company offers a range of body domain modules which integrate several functions such as central gateway, body controls, comfort, and vehicle access solutions into one device. This computing module allows Visteon's customers to implement in-house applications software into body controls for brand and market differentiation.
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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.
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The Company constantly works to establish and maintain positive, cooperative relations with its unions and work representatives around the world. 6 Diversity and Inclusion Diversity represents an environment where the contributions of all employees are encouraged and valued.
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The Company, along with automotive companies around the world, has in recent years experienced a shortage in semiconductors as a result of the inability of semiconductor suppliers to rapidly reallocate production to serve the automotive industry during a time of increased demand.
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The Company's semiconductor suppliers, along with most automotive component supply companies that use semiconductors, were unable to fully meet the vehicle production demands of its customers due to events which were outside the Company's control. While the supply situation has improved, the Company continues to work closely with suppliers and customers to minimize potential adverse impacts of these events.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

30 edited+12 added−5 removed70 unchanged
Biggest changeHowever, given the uncertainty regarding the negotiations, including the potential for additional tariffs or trade barriers by or between the U.S., China (including but not limited to the Uyghur Forced Labor Prevention Act), or other countries, the Company can provide no assurance that any strategies we implement to mitigate the impact of any trade actions will be successful.
Biggest changeDespite 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.
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 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.
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.
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 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.
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.
Price pressures from customers may adversely affect the Company’s business 11 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.
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.
Work stoppages and similar events could significantly disrupt the Company’s business 10 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.
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.
If the Company were to have a change of ownership within the meaning of IRC Sections 382 and 383, its NOLs 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.
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.
Industry and Competition Related Risk Factors The Company may not realize sales represented by awarded business 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.
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.
Developments or assertions by or against the Company relating to intellectual property rights could materially impact its business 12 The Company owns significant intellectual property, including a number of patents, trademarks, copyrights, and trade secrets and is involved in numerous licensing arrangements.
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.
Privacy and security concerns (including cyber security) 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).
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).
A breach that impacts any of these third-parties' systems could result in unauthorized access to the Company’s or 14 its customers' or suppliers' sensitive data or the Company’s own information technology systems.
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.
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 The Company is involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant.
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.
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 United States statutory rate.
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.
Furthermore, these new technologies 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.
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 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, 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.
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.
Advances in AI 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.
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.
Although those disputes were resolved, 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 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.
For more information on sensitivities to changing assumptions, please see “Critical Accounting Estimates” in Item 7 and Note 11, “Employee Benefit Plans” in Part II, Item 8 of this Form 10-K.
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.
However, the Company may experience difficulties that delay or prevent the development, introduction, or market acceptance of its new or enhanced products.
In addition, the Company may experience difficulties that delay or prevent the development, introduction, or market acceptance of its new or enhanced products.
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.
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.
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. No assurances can be given that such proceedings and claims will not have a material adverse impact on the Company’s profitability and financial position.
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.
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.
(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.
The Company's primary exposures are to the euro, Chinese renminbi, Brazilian real, Mexican peso, Thai bhat, Indian rupee, and Japanese yen. Volatility in certain exchange rates could adversely impact Visteon financial results and comparability of results from period to period.
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.
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.
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.
While the Company believes that such licenses generally can be obtained by the Company, or supplier if a supplied component, there is no assurance that the necessary licenses can be obtained on commercially acceptable terms or at all.
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.
The Company believes it has a number of legal defenses to such claims and intends to defend any potential claims vigorously. Should the company be unsuccessful in their defense, these losses and expenses could be significant, and may include consequential losses such as lost 9 profits.
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.
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.
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 is highly dependent on Ford Motor Company and decreases in this customer’s vehicle production volumes would adversely affect the Company Ford is one of the Company’s largest ultimate customers and accounted for 22% of sales for each of the years 2023, 2022 and 2021, respectively.
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.
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. These events have occurred with more frequency within our industry and are expected to continue (and possibly increase) moving forward.
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.
In particular, the OECD's Pillar Two initiative introduces a 15% global minimum tax applied on a country-by-country basis and for which many jurisdictions have now committed to an effective enactment date starting January 1, 2024.
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.
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.
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.
Removed
Trade negotiations are ongoing, notably between the U.S. and Chinese governments.
Added
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.
Removed
For example, as previously disclosed, during the second quarter of 2022, the Company recorded a settlement charge related to a contract dispute with a joint venture partner in China and during the fourth quarter of 2022 the Company incurred approximately $19 million of program management costs and other charges with that joint venture partner.
Added
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.
Removed
Accordingly, any change in Ford's vehicle production volumes may have a significant impact on the Company’s sales volume and profitability.
Added
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.
Removed
For example, the Organization for Economic Cooperation and Development (the "OECD"), the European Union and other countries (including countries in which the Company operates) have committed to enacting 13 substantial changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed.
Added
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.
Removed
The impact of these potential new rules as well as any other changes in domestic and international tax rules and regulations could have a material effect on the Company’s overall effective tax rate.
Added
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.
Added
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).
Added
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.
Added
See Note 18, "Financial Instruments" in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Added
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.
Added
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.
Added
These types of events have occurred with more frequency within our industry and are expected to continue (and possibly increase) moving forward.
Added
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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−1 removed5 unchanged
Biggest changeRisk Management, Strategy and Testing 15 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.
Biggest changeThe 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.
Item 1C. Cybersecurity Governance Responsibility for assessing cybersecurity risk includes, but is not limited to, input from our Board of Directors (the "Board"), 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).
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).
Visteon’s internal cyber information technology (“IT”) 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.
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.
If a third-party vendor is not able to provide a SOC 1 report, the Company takes additional steps to assess their cybersecurity preparedness and assess our relationship on that basis.
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.
Our cyber IT 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.
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.
Visteon engages a managed security service provider to augment its cyber IT security team and to provide additional monitoring capabilities. Visteon’s cyber IT 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.
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.
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 and computer virus attacks.
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.
In addition, we have a set of Company-wide policies and procedures concerning cybersecurity matters, which include an IT 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, multifactor authentication, confidential information and the use of the internet, social media, email and wireless devices.
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 regularly tests defenses by performing simulations and drills at both a technical level (including through penetration tests) and by reviewing its operational policies and procedures with third-party experts. At the management level, our cyber IT security team regularly monitors alerts and meets to discuss threat levels, trends and remediation.
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.
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 cyber security oversight. The Cyber IT security team has multiple years of experience and/or are security certified (e.g., CISSP).
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.
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.
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.
Removed
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.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeAt December 31, 2023, the Company and its consolidated subsidiaries owned or leased: • 27 corporate offices, technical and engineering centers and customer service centers in 13 countries around the world, all of which were leased. • 14 manufacturing and/or assembly facilities in Brazil, China, India, Japan, Mexico, Portugal, Slovakia, Tunisia, and Thailand, of which 11 were leased and 3 were owned. 16 In addition, the Company's non-consolidated affiliates operate 6 manufacturing and/or assembly locations, primarily in the Asia Pacific region.
Biggest changeAt 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.
The Company considers its facilities to be adequate for its current uses.
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. 16

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeCertain legal proceedings in which the Company is involved are discussed in Note 18, “Commitments and Contingencies” to the Company's consolidated financial statements included in Part II, Item 8 of this 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 17
Biggest changeCertain 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed2 unchanged
Biggest changePeriod 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, 2023 76,515 132.76 76,515 214 November 1 to November 31, 2023 — — — 214 December 1 to December 31, 2023 161,238 124.04 161,238 194 Total 237,753 126.85 237,753 194 (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.
Biggest changePeriod 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.
No dividends were paid by the Company on its common stock during the years ended December 31, 2023 and 2022. 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.
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 2023.
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.
Auto Parts Index. The graph below assumes that $100 was invested on December 31, 2018 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.
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.
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 (“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, 2018 through December 31, 2023, for Visteon's existing common stock, the S&P 500 Index and the Dow Jones U.S.
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.
As of December 31, 2023, the Company has $194 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 2023.
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.
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 8, 2024, the Company had 2,725 s hareholders of record.
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 s hareholders of record.
Auto Parts Index $100.00 $121.42 $145.84 $166.84 $123.06 $125.33 S&P 500 $100.00 $128.88 $149.83 $190.13 $153.16 $190.27 The above comparisons are required by the Securities and Exchange Commission 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. Selected Financial Data None 21
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
December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Visteon Corporation $100.00 $143.65 $208.23 $184.37 $217.04 $207.20 Dow Jones U.S.
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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

65 edited+26 added−19 removed24 unchanged
Biggest changeVisteon continued to work with its customers to pass along the elevated costs caused by semiconductor shortages. * Adjusted EBITDA is a Non-GAAP financial measure, as defined below. 23 Results of Operations Year ended December 31, 2023 Compared to Year ended December 31, 2022 The Company's consolidated results of operations for the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, (In millions) 2023 2022 Change Net sales $ 3,954 $ 3,756 $ 198 Cost of sales (3,467) (3,388) (79) Gross margin 487 368 119 Selling, general and administrative expenses (207) (188) (19) Restructuring and impairment (5) (14) 9 Interest expense, net (7) (10) 3 Equity in net (loss) income of non-consolidated affiliates (10) (1) (9) Other income, net (1) 20 (21) Income (loss) before income taxes 257 175 82 Benefit from (provision for) income taxes 248 (45) 293 Net income (loss) 505 130 375 Less: Net (income) loss attributable to non-controlling interests (19) (6) (13) Net income (loss) attributable to Visteon Corporation $ 486 $ 124 $ 362 Adjusted EBITDA $ 434 $ 348 $ 86 2023 includes a non-cash tax benefit of $313 million related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Biggest changeWins 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.
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 Form 10-K. Accordingly, undue reliance should not be placed on these 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.
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: • 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. • Continued and future impacts related to the conflict between Russia and the Ukraine including supply chain disruptions, reduction in customer demand, and the imposition of sanctions on Russia. • Failure of the Company’s joint venture partners to comply with contractual obligations or to exert undue influence in China. 31 • 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. • 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, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, 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. 32 • 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.
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
The primary assumptions affecting the Company’s accounting for employee benefits, as of December 31, 2023, 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 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 following table illustrates the sensitivity to a change in certain assumptions for Company sponsored U.S. and non-U.S. pension plans on its 2023 funded status and 2024 pretax pension expense. Impact on U.S. 2024 Pretax Pension Expense Impact on U.S. Plan 2023 Funded Status Impact on Non-U.S. 2024 Pretax Pension Expense Impact on Non-U.S.
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.
Assumptions, including the discount rate, expected long-term rate of return on plan assets, and rate of increase in compensation, are described in Note 11, “Employee Benefit Plans” to the Company’s consolidated financial statements included in Item 8 of this 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.
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.
Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this 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.
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.
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 3, “Restructuring and Impairments” in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
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.
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 Form 10-K.
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.
See Note 18, "Commitments and Contingencies" in the Company's consolidated financial statements included in Item 8 of this 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.
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.
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, 2023, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $17 million.
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.
See Note 1, "Summary of Significant Accounting Policies” in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
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.
During the fourth quarter of 2023, the Company released $313 million of its deferred tax valuation allowance related to its U.S. federal and certain state deferred tax assets.
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.
Cash balances totaling $383 million were located in jurisdictions outside of the United States, of which approximately $85 million is considered permanently reinvested for funding ongoing operations outside of the U.S.
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.
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.
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.
Debt and Capital Structure See "Liquidity" above and also see Note 10, "Debt" and Note 14, "Stockholders' Equity and Non-controlling Interests" to the Company's consolidated financial statements included in Item 8 of this Form 10-K for further information.
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.
Other Items Affecting Liquidity During the year ended December 31, 2023, cash contributions to the Company's non-U.S. employee retirement plans were approximately $7 million. Additionally, the Company expects to make contributions to its US and non-US defined benefit pension plans of $9 and $7 million, respectively, during 2024.
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.
The Company has committed to make investments totaling $15 million in two entities principally focused on the automotive sector pursuant to limited partnership agreements. As of December 31, 2023, the Company has contributed $12 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.
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.
See Note 10, "Debt" in the Company's consolidated financial statements included in Item 8 of this 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.
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.
Leases The Company has operating leases primarily for corporate offices, technical and engineering centers, vehicles, and certain equipment with future lease obligations ranging from 2024 to 2033. Additional discussion regarding the Company's leasing 27 activities is provided in Note 8, "Leases" in the Company's consolidated financial statements included in Item 8 of this Form 10-K.
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.
During the year ended December 31, 2023, the Company paid $8 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is provided in Note 3, "Restructuring and Impairments" in the Company's consolidated financial statements included in Item 8 of this Form 10-K.
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.
Plans 2023 2022 2023 2022 Expected Rate of Return 6.87% 6.23% 2.00% - 9.45% 2.00% - 8.90% Long-Term Rates of Return 7.23% 6.90% 2.00% - 9.60% 2.00% - 9.45% Actual Rates of Return 3.22% (17.10)% 4.78% (31.10)% The Company has set the long-term rates of return assumptions for its 2024 pension expense which range from 2.00% to 9.60% outside the U.S. and 7.23% in the 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.
Fair Value Measurements See Note 16, "Fair Value Measurements" to the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional 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.
Affiliate working capital lines had availability of $151 million and the Company had $400 million of available credit under the revolving credit facility as of December 31, 2023. Cash Balances As of December 31, 2023, the Company had total cash and equivalents of $518 million, including $3 million of restricted cash.
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.
Plan 2023 Funded Status 25 basis point decrease in discount rate (a)(b) Less than -$1 million -$17 million Less than -$1 million -$7 million 25 basis point increase in discount rate (a)(b) Less than +$1 million +$16 million Less than +$1 million +$6 million 25 basis point decrease in expected return on assets (a) +$1.6 million Less than +$1 million 25 basis point increase in expected return on assets (a) -$1.6 million Less than -$1 million (a) Assumes all other assumptions are held constant.
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.
Pension Plans Certain Company employees participate in defined benefit pension plans or retirement/termination indemnity plans. The Company has approximately $142 million in unfunded net pension liabilities as of December 31, 2023, of which approximately $113 million and $29 million are attributable to U.S. and non-U.S. pension plans, respectively.
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 magnitude of the impact on the financial statements, results of operations, and cash flows will depend on the evolution of the semiconductor supply, plant production schedules, supply chain impacts, and global economic impacts. Company Highlights Visteon continued to focus on execution throughout 2023, building a foundation of sustainable growth, margin expansion, and cash flow generation.
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.
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.
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.
Plans 2023 2022 2023 2022 Weighted Average Discount Rates 5.40% 2.48% 5.33% 2.23% Discount Rates 5.40% 2.48% 1.20% - 11.50% 0.55% to 9.55% 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.
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.
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. Impairment of Long-lived Assets 28 The Company monitors long-lived assets for impairment indicators on an ongoing basis.
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.
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 2022, which was filed with the Securities and Exchange Commission on February 16, 2023.
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.
See Note 16, "Fair Value Measurements" and Note 6, "Property and Equipment" in the Company's consolidated financial statements included in Item 8 of this 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 Form 10-K for a discussion of recent accounting pronouncements.
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.
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 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.
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, 2023, the Company’s corporate credit rating is BB- by Standard & Poor’s.
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.
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.
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.
Visteon's broad portfolio of cockpit electronics technology, the industry's first wireless battery management system, and the development of safety technology integrated into its domain controllers 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. • Enhance Shareholder Returns While Maintaining a Strong Balance Sheet - The Company has continued to maintain a strong balance sheet to withstand industry volatility while providing a foundation for future growth and shareholder returns.
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.
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 Form 10-K “Financial Statements and Supplementary Data”. For discussion related to changes in financial condition and the results of operations for fiscal year 2022-related items, refer to Part II, Item 7.
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”.
During the year ended December 31, 2023, the Company has purchased 783,290 shares at an average price of $135.22 related to this program. Purchase Obligations As of December 31, 2023, the Company has contractual purchase obligations of approximately $22 million through 2028.
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.
Equity in Net Income of Non-Consolidated Affiliates Equity in net income of non-consolidated affiliates was a loss of $10 million and $1 million for the years ended December 31, 2023 and 2022, respectively. The decrease is primarily due to various operational and non-operational charges incurred at an affiliate.
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.
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 United States.
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.
The reconciliation of Adjusted EBITDA to net income attributable to Visteon for the years ended December 31, 2023 and 2022 is as follows: Year Ended December 31, (In millions) 2023 2022 Change Net income (loss) attributable to Visteon Corporation $ 486 $ 124 $ 362 Depreciation and amortization 104 108 (4) Restructuring and impairment 5 14 (9) (Benefit from) provision for income tax (248) 45 (293) Non-cash, stock-based compensation expense 34 26 8 Interest expense, net 7 10 (3) Net income (loss) attributable to non-controlling interests 19 6 13 Equity in net loss (income) of non-consolidated affiliates 10 1 9 Other, net 17 14 3 Adjusted EBITDA $ 434 $ 348 $ 86 2023 includes a non-cash tax benefit of $313 million related to a reduction in the valuation allowance against the U.S. deferred tax assets.
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.
The increase in cash from operations in 2023 when compared to the prior period is primarily attributable to higher Adjusted EBITDA of $86 million and improved working capital usage of $50 million, primarily related to customer collections and improved inventory management, offset by decreased payables.
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.
The Company repurchased $106 million of Company common stock during 2023 as part of this program. 22 Financial Results The pie charts below highlight the sales breakdown for Visteon for the year ended December 31, 2023. *Regional sales are based on the geographic region where sale originates and not where customer is located (excludes inter-regional eliminations).
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).
Selling, General, and Administrative Expenses Selling, general, and administrative expenses were $207 million, or 5.2% of net sales, and $188 million, or 5.0% of net sales, during the years ended December 31, 2023 and 2022, respectively. The increase is primarily due to increased personnel costs and reserves for bad debt.
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.
Net engineering costs of $210 million for the year ended December 31, 2023, including the impacts of currency, were $14 million higher than the same period of 2022. This increase is primarily related to lower recoveries, higher personnel cost, and inflation; partially offset by the timing of project expense.
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.
Volumes and net new business increased net sales by $500 million due to increases in customer production and continued market outperformance as a result of recent product launches. Customer pricing decreased net sales by $256 million primarily as a result of lower customer recoveries due to improving supply chain dynamics related to the worldwide semiconductor supply shortage.
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.
Net Sales and Cost of Sales (In millions) Net Sales Cost of Sales Gross Margin December 31, 2022 $ 3,756 $ (3,388) $ 368 Volume, mix, and net new business 500 (386) 114 Customer pricing, net (256) — (256) Currency (44) 19 (25) Engineering costs, net — (14) (14) Cost performance, design changes, and other (2) 302 300 December 31, 2023 $ 3,954 $ (3,467) $ 487 Net sales for the year ended December 31, 2023 totaled $3,954 million, which represents an increase of $198 million compared with 2022.
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.
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 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.
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.
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 13, “Income Taxes,” to the consolidated financial statements included in this Report.
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.
Other Income, Net Other income, net consists of the following: Year Ended December 31, (In millions) 2023 2022 Pension financing benefits, net $ 11 $ 20 Gain on sale of investment — 3 Foreign currency translation charge — (3) Township settlement (12) — $ (1) $ 20 25 Income Taxes The Company's benefit from income taxes was $248 million for year ended December 31, 2023, an increased benefit of $293 million when compared with income tax expense in 2022.
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.
(b) Excludes impact of assets used to hedge discount rate volatility. 30 Income Taxes The Company is subject to income taxes in the U.S. and numerous non-U.S. jurisdictions. Significant judgment is required in determining the Company’s worldwide provision for income taxes, deferred tax assets and liabilities, and valuation allowances recorded against the Company’s net deferred tax assets.
(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.
Adjusted EBITDA was $434 million for the year ended December 31, 2023, representing an increase of $86 million when compared with Adjusted EBITDA of $348 million for 2022. Favorable volumes and mix increased Adjusted EBITDA by $114 million. Foreign currency decreased Adjusted EBITDA by $24 million, primarily attributable to the Japanese yen and Mexican peso.
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.
Favorable cost performance, design changes and other decreased cost of sales by $302 million primarily due to improved supply chain dynamics related to the worldwide semiconductor supply shortage as well as manufacturing efficiencies. 24 A summary of net engineering costs is shown below: Year Ended December 31, (In millions) 2023 2022 Gross engineering costs $ (330) $ (341) Engineering recoveries 120 145 Engineering costs, net $ (210) $ (196) Gross engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs.
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.
Volume, mix and net new business increased cost of sales by $386 million. Foreign currency decreased cost of sales by $19 million, primarily attributable to the Chinese renminbi and India rupee, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased cost of sales by $14 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.
Cash Flows Operating Activities The Company generated $267 million of cash from operating activities during the year ended December 31, 2023, as compared to $167 million during 2022 representing a $100 million increase.
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.
Visteon reported sales of $3,954 million, a year-over-year increase of 5%, which represents continued out-performance compared to customer production. When excluding the impact of pricing from supply chain recoveries, Visteon’s base sales grew 12% from the prior year.
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.
Restructuring and Impairment The Company recorded $5 million and $9 million of net restructuring expense for the years ended December 31, 2023 and 2022, respectively, primarily related to employee severance.
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.
This increase in cash used by investing activities is primarily due to increased capital expenditures of $44 million. Financing Activities Net cash used by financing activities during the year ended December 31, 2023 totaled $156 million, as compared to a use of $9 million for 2022, representing increased usage of $147 million.
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.
Unfavorable currency decreased net sales by $44 million, primarily attributable to the Chinese renminbi, Japanese yen, and Indian rupee, partially offset by the euro. Other cost performance, primarily related to design changes, decreased sales by $2 million. Cost of sales increased $79 million for the year ended December 31, 2023, when compared with 2022.
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.
Adjusted EBITDA* was $434 million, or 11% of sales as a result of operational leverage from higher volumes as well as commercial and cost discipline. Visteon continued to build the foundation for sustainable growth launching 129 new products during 2023. Visteon's next-generation products continue to be featured on its customer's key vehicles and platforms.
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.
This increase is primarily attributable to repurchases of common stock of $106 million and dividends paid to non-controlling interest of $29 million during the year ended December 31, 2023. The Company also repaid $13 million of principal on the term debt facility.
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.
Net engineering costs, excluding currency, decreased Adjusted EBITDA by $12 million. Customer pricing decreased Adjusted EBITDA by $256 million primarily as a result of lower semiconductor open market purchases and the associated customer recoveries due to improving supply chain dynamics related to the worldwide semiconductor supply shortage.
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.
In March 2023, the Company announced a $300 million share repurchase program maturing at the end of 2026.
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.
However, industry production volumes of approximately 90 million units in 2023 remained below recent industry production levels that peaked in 2017 and risks related to vehicle affordability, economic uncertainty, potential geopolitical challenges, and customer market share changes create ongoing uncertainties.
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.
Interest Expense, Net Net interest expense for the year ended December 31, 2023, was $7 million, representing a decrease of $3 million as compared to 2022. Interest expense for these periods is primarily related to the Company's term debt facility partially offset by cash balances invested at higher interest rates.
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.
Removed
Global Automotive Market Conditions and Production Levels For the last few years, the industry has been negatively impacted by the COVID-19 pandemic, worldwide semiconductor and other supply related shortages, a UAW strike, and increased geopolitical challenges. Industry vehicle volumes increased in 2022 and again in 2023 as the worldwide semiconductor and other supply related shortages have eased.
Added
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.
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Additionally, Visteon was awarded $7.2 billion in new business wins with strong representation in all product categories.
Added
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.
Removed
Wins included cluster wins of approximately $1.6 billion, driven primarily by digital clusters, multiple SmartCore™ wins with lifetime revenue in excess of $1.3 billion, multiple large multi-display wins bringing total displays wins in excess of $0.8 billion for the year, momentum in connected services with the Company's first App Store win, first power electronics win for an integrated battery junction box, and incremental battery management system wins that extend the scope of previous customer wins.
Added
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.
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To address the near-term challenges created from the worldwide semiconductor and supply chain shortages, Visteon continued the proactive initiatives aimed at increasing product availability for its customers while minimizing the impact of incremental costs to the business.
Added
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.
Removed
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 .
Added
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.
Removed
Excluding this item, the $20 million year-over-year increase in income tax expense is primarily attributable to the overall increase in pre-tax income, including changes in the mix of earnings and differing tax rates between jurisdictions as well as withholding taxes.
Added
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.
Removed
Other cost performance increased Adjusted EBITDA by $261 million primarily related to design changes and improved supply chain dynamics related to the worldwide semiconductor supply shortage as well as manufacturing efficiencies. 26 Liquidity Overview The Company's primary sources of liquidity are cash flows from operations, existing cash balances, and borrowings under available credit facilities.
Added
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.
Removed
The increases are partially offset by an increase of $39 million of cash paid for taxes. Investing Activities Net cash used by investing activities during the year ended December 31, 2023 totaled $123 million, as compared to cash used of $68 million in 2022, representing increased usage of $55 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe hypothetical pretax gain or loss in fair value from a 10% favorable or adverse change in quoted currency exchange rates would be approximately $21 million for foreign currency derivative financial instruments as of December 31, 2023 and 2022.
Biggest changeThe 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.
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. 33
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
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 customer receipts, supplier payments, debt and other payables, subsidiary dividends, investments in subsidiaries, and anticipated foreign currency denominated transaction proceeds.
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.
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 foreign exchange contracts to mitigate this exposure.
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.
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 17, "Financial Instruments" to the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
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.

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