Visteon(VC) - 2020 Q2 - Quarterly Report

Part I - Financial Information Item 1 - Consolidated Financial Statements This section presents Visteon Corporation's unaudited consolidated financial statements, including the Statements of Comprehensive Income (Loss), Balance Sheets, Statements of Cash Flows, and Statements of Changes in Equity, along with detailed notes explaining significant accounting policies, revenue recognition, segment information, earnings per share, restructuring activities, non-consolidated affiliates, inventories, long-lived assets, other assets, debt, other liabilities, employee benefit plans, income taxes, stockholders' equity, and fair value measurements Consolidated Statements of Comprehensive Income (Loss) Presents the company's unaudited comprehensive income and loss, including net sales, gross margin, and earnings per share Consolidated Statements of Comprehensive Income (Loss) (in millions) | Metric (in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net sales | $371 | $733 | $1,014 | $1,470 | | Gross margin | $4 | $70 | $57 | $136 | | Income (loss) before income taxes | $(40) | $16 | $(71) | $27 | | Net income (loss) attributable to Visteon Corporation | $(45) | $7 | $(80) | $21 | | Basic earnings (loss) per share | $(1.62) | $0.25 | $(2.87) | $0.75 | | Diluted earnings (loss) per share | $(1.62) | $0.25 | $(2.87) | $0.74 | - Net sales decreased by $362 million (49.4%) for the three months ended June 30, 2020, and by $456 million (31.0%) for the six months ended June 30, 2020, compared to the same periods in 2019, primarily due to COVID-19 impacts[9] - The company reported a net loss attributable to Visteon Corporation of $45 million for the three months and $80 million for the six months ended June 30, 2020, a significant decline from net income of $7 million and $21 million, respectively, in the prior year[9] Consolidated Balance Sheets Details the company's financial position, including assets, liabilities, and equity at specific dates Consolidated Balance Sheets (in millions) | Metric (in millions) | June 30, 2020 | December 31, 2019 | | :------------------- | :------------ | :---------------- | | Cash and equivalents | $755 | $466 | | Total current assets | $1,426 | $1,345 | | Total assets | $2,320 | $2,271 | | Total current liabilities | $598 | $798 | | Long-term debt, net | $748 | $348 | | Total equity | $468 | $595 | | Total liabilities and equity | $2,320 | $2,271 | - Cash and equivalents increased significantly to $755 million as of June 30, 2020, from $466 million at December 31, 2019[11] - Long-term debt, net, more than doubled to $748 million as of June 30, 2020, from $348 million at December 31, 2019, primarily due to drawing down the revolving credit facility[11][56] - Total current liabilities decreased from $798 million to $598 million, while total equity decreased from $595 million to $468 million[11] Consolidated Statements of Cash Flows Outlines cash movements from operating, investing, and financing activities over specific periods Consolidated Statements of Cash Flows (in millions) | Metric (in millions) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided from (used by) operating activities | $(13) | $61 | | Net cash used by investing activities | $(57) | $(67) | | Net cash provided from (used by) financing activities | $363 | $(23) | | Net increase (decrease) in cash | $290 | $(29) | | Cash and restricted cash at end of the period | $759 | $438 | - Operating activities used $13 million cash in the first six months of 2020, a significant decrease from $61 million generated in the same period of 2019[13][156] - Financing activities provided $363 million cash in the first six months of 2020, primarily due to $400 million borrowings on the revolving credit facility, compared to a use of $23 million in 2019[13][159] Consolidated Statements of Changes in Equity Shows changes in stockholders' equity and non-controlling interests over time Consolidated Statements of Changes in Equity (in millions) | Metric (in millions) | December 31, 2019 | June 30, 2020 | | :------------------- | :---------------- | :------------ | | Total Visteon Corporation Stockholders' Equity | $480 | $358 | | Non-controlling Interests | $115 | $110 | | Total Equity | $595 | $468 | - Total Visteon Corporation stockholders' equity decreased by $122 million from $480 million at December 31, 2019, to $358 million at June 30, 2020, primarily due to net losses and other comprehensive losses[16] - Accumulated other comprehensive loss increased from $(267) million to $(299) million during the six months ended June 30, 2020[16] Notes to Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements NOTE 1. Summary of Significant Accounting Policies Describes the key accounting principles and policies applied in preparing the financial statements - The company adopted ASU 2016-13 (Credit Losses) and ASU 2019-12 (Income Taxes) effective January 1, 2020, with no material impact on consolidated financial statements[22][23] - The company is evaluating ASU 2020-04 (Reference Rate Reform) and does not expect ASU 2018-14 (Defined Benefit Plans) to have a material impact[25][26] NOTE 2. Revenue Recognition Details the company's policies and breakdown of revenue by geographical markets and product lines Geographical Markets (in millions) | Geographical Markets (in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Europe | $132 | $243 | $386 | $505 | | Americas | $62 | $206 | $254 | $396 | | China Domestic | $126 | $121 | $183 | $229 | | China Export | $23 | $65 | $87 | $134 | | Other Asia-Pacific | $38 | $142 | $154 | $299 | | Total Net Sales | $371 | $733 | $1,014 | $1,470 | Product Lines (in millions) | Product Lines (in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Instrument clusters | $201 | $323 | $513 | $637 | | Audio and infotainment | $54 | $184 | $199 | $380 | | Information displays | $54 | $122 | $163 | $245 | | Telematics | $17 | $11 | $29 | $22 | | Other | $45 | $114 | $110 | $186 | | Total Net Sales | $371 | $733 | $1,014 | $1,470 | - Revenue from Europe, Americas, China Export, and Other Asia-Pacific significantly decreased in both three and six-month periods ended June 30, 2020, compared to 2019, while China Domestic saw a slight increase in the three-month period[27] NOTE 3. Segment Information Provides financial data and analysis for the company's reportable operating segments - Visteon operates with one reportable segment, Electronics, which provides vehicle cockpit electronics products[29] Adjusted EBITDA (in millions) | Adjusted EBITDA (in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :---------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to Visteon Corporation | $(45) | $7 | $(80) | $21 | | Adjusted EBITDA | $(3) | $46 | $30 | $87 | - Adjusted EBITDA decreased significantly, reporting a loss of $3 million for the three months and $30 million for the six months ended June 30, 2020, down from $46 million and $87 million respectively in 2019[32] NOTE 4. Earnings Per Share Explains the calculation of basic and diluted earnings per share, including relevant adjustments EPS (in millions, except per share amounts) | EPS (in millions, except per share amounts) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to Visteon | $(45) | $7 | $(80) | $21 | | Average common stock outstanding - basic | 27.8 | 28.1 | 27.9 | 28.1 | | Basic earnings (loss) per share | $(1.62) | $0.25 | $(2.87) | $0.75 | | Diluted earnings (loss) per share | $(1.62) | $0.25 | $(2.87) | $0.74 | - Basic and diluted EPS both declined to a loss of $1.62 for the three months and $2.87 for the six months ended June 30, 2020, from positive EPS in the prior year, reflecting the net loss[35] - Performance-based share units were excluded from diluted EPS calculation for 2020 as their inclusion would have been anti-dilutive[35] NOTE 5. Restructuring Activities Details the nature and financial impact of the company's restructuring programs and related reserves - The company recorded $4 million and $37 million in net restructuring expense for the three and six months ended June 30, 2020, respectively, compared to $0 and $1 million in 2019[36] - New restructuring programs were approved in January and March 2020, impacting European engineering/administrative functions and global facilities, with $21 million and $15 million recorded respectively for the six months ended June 30, 2020[37][38] Restructuring Reserves (in millions) | Restructuring Reserves (in millions) | Amount | | :----------------------------------- | :----- | | December 31, 2019 | $10 | | Expense | $33 | | Utilization | $(6) | | Foreign currency | $(1) | | March 31, 2020 | $36 | | Expense | $1 | | Change in estimate | $3 | | Utilization | $(9) | | Foreign currency | $1 | | June 30, 2020 | $32 | NOTE 6. Non-Consolidated Affiliates Describes investments in and financial exposure to non-consolidated entities, such as joint ventures - Visteon holds a 50% interest in Yanfeng Visteon Investment Co., Ltd. (YFVIC), which is determined to be a Variable Interest Entity (VIE) but not consolidated as Visteon is not the primary beneficiary[45][47] Exposure to loss in YFVIC (in millions) | Exposure to loss in YFVIC (in millions) | June 30, 2020 | December 31, 2019 | | :-------------------------------------- | :------------ | :---------------- | | Investment in YFVIC | $43 | $43 | | Receivables due from YFVIC | $39 | $41 | | Subordinated loan receivable from YFVIC | $6 | $8 | | Maximum exposure to loss in YFVIC | $88 | $92 | NOTE 7. Inventories Presents the composition and valuation of the company's inventory balances Inventories, net (in millions) | Inventories, net (in millions) | June 30, 2020 | December 31, 2019 | | :----------------------------- | :------------ | :---------------- | | Raw materials | $111 | $100 | | Work-in-process | $24 | $28 | | Finished products | $35 | $41 | | Total | $170 | $169 | - Total inventories remained stable at $170 million as of June 30, 2020, compared to $169 million at December 31, 2019, with a slight increase in raw materials[48] NOTE 8. Long-Lived Assets Details the company's property, plant, equipment, and intangible assets, including impairment considerations Intangible assets, net (in millions) | Intangible assets, net (in millions) | June 30, 2020 | December 31, 2019 | | :----------------------------------- | :------------ | :---------------- | | Definite-Lived | $80 | $81 | | Indefinite-Lived (Goodwill) | $45 | $46 | | Total | $125 | $127 | - Total intangible assets, net, decreased slightly to $125 million as of June 30, 2020, from $127 million at December 31, 2019[49] - The company performed an impairment analysis due to COVID-19 but concluded there was no impairment of long-lived assets as of June 30, 2020[51] NOTE 9. Other Assets Outlines the components of other current and non-current assets, such as recoverable taxes and joint venture receivables Other Current Assets (in millions) | Other Current Assets (in millions) | June 30, 2020 | December 31, 2019 | | :--------------------------------- | :------------ | :---------------- | | Recoverable taxes | $51 | $61 | | Joint venture receivables | $39 | $41 | | Contractually reimbursable engineering costs | $35 | $29 | | Total | $163 | $193 | Other Non-Current Assets (in millions) | Other Non-Current Assets (in millions) | June 30, 2020 | December 31, 2019 | | :------------------------------------- | :------------ | :---------------- | | Deferred tax assets | $57 | $59 | | Contractually reimbursable engineering costs | $33 | $24 | | Recoverable taxes | $19 | $28 | | Total | $146 | $150 | - The company sold $73 million of China bank notes during the six months ended June 30, 2020, compared to $36 million in 2019[52] NOTE 10. Debt Provides comprehensive information on the company's short-term and long-term debt, including terms and covenants Debt (in millions) | Debt (in millions) | June 30, 2020 | December 31, 2019 | | :----------------- | :------------ | :---------------- | | Short-term debt | $22 | $37 | | Long-term debt, net | $748 | $348 | | Total Debt | $770 | $385 | - Long-term debt significantly increased to $748 million as of June 30, 2020, from $348 million at December 31, 2019, primarily due to borrowing the full $400 million from the revolving credit facility to enhance liquidity amidst COVID-19 uncertainty[54][56] - The company was in compliance with all debt covenants as of June 30, 2020, with Term Facility and Revolving Credit Facility loans accruing interest at 2.79% and 2.99% respectively[57][58] NOTE 11. Other Liabilities Details the composition of other current and non-current liabilities, including warranty accruals and restructuring reserves Other Current Liabilities (in millions) | Other Current Liabilities (in millions) | June 30, 2020 | December 31, 2019 | | :------------------------------------ | :------------ | :---------------- | | Product warranty and recall accruals | $37 | $34 | | Restructuring reserves | $32 | $10 | | Deferred income | $20 | $22 | | Total | $156 | $147 | Other Non-Current Liabilities (in millions) | Other Non-Current Liabilities (in millions) | June 30, 2020 | December 31, 2019 | | :---------------------------------------- | :------------ | :---------------- | | Derivative financial instruments | $17 | $14 | | Product warranty and recall accruals | $12 | $15 | | Deferred income | $8 | $9 | | Total | $62 | $72 | - Restructuring reserves within current liabilities increased significantly to $32 million as of June 30, 2020, from $10 million at December 31, 2019[62] NOTE 12. Employee Benefit Plans Describes the company's pension and other post-employment benefit plans, including costs and contributions Net Pension Benefit (Cost) (in millions) | Net Pension Benefit (Cost) (in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | U.S. Plans | $2 | $3 | $5 | $5 | | Non-U.S. Plans | $(2) | $(1) | $(2) | $(1) | - Required 2020 contributions to defined benefit plans are approximately $20 million, with $2 million already contributed to non-U.S. plans. The company is evaluating deferral opportunities due to COVID-19 relief measures[66] NOTE 13. Income Taxes Explains the company's income tax provision, effective tax rate, and deferred tax assets and liabilities - The provision for income tax on continuing operations was $2 million and $7 million for the three and six months ended June 30, 2020, respectively, reflecting profitability in certain countries and valuation allowances in others[67] - Pretax losses in jurisdictions with valuation allowances totaled $101 million for the six months ended June 30, 2020, significantly increasing the effective tax rate[67] - The company maintains a full valuation allowance against U.S. net deferred tax assets due to prevailing uncertainty from COVID-19 and softening production volumes, but a partial release is possible within 12-24 months if U.S. operating results improve[70] NOTE 14. Stockholders' Equity and Non-controlling Interests Details changes in equity, including stock repurchases, and the breakdown of non-controlling interests - The company purchased 233,769 shares of common stock for $16 million in Q1 2020. As of June 30, 2020, $364 million remains available for repurchases, but the company does not intend to repurchase additional shares[77] Non-Controlling Interests (in millions) | Non-Controlling Interests (in millions) | June 30, 2020 | December 31, 2019 | | :-------------------------------------- | :------------ | :---------------- | | Yanfeng Visteon Automotive Electronics Co., Ltd. | $49 | $56 | | Shanghai Visteon Automotive Electronics, Co., Ltd. | $42 | $41 | | Changchun Visteon FAWAY Electronics, Co., Ltd. | $18 | $17 | | Other | $1 | $1 | | Total | $110 | $115 | Accumulated Other Comprehensive Income (Loss) (in millions) | Accumulated Other Comprehensive Income (Loss) (in millions) | June 30, 2020 | December 31, 2019 | | :-------------------------------------------------------- | :------------ | :---------------- | | Beginning balance | $(267) | $(216) | | Ending balance | $(299) | $(215) | NOTE 15. Fair Value Measurements and Financial Instruments Describes the company's use of derivative instruments and fair value hierarchy for financial assets and liabilities - The company uses derivative financial instruments (forward contracts, cross-currency swaps, interest rate swaps) to manage exposure to currency exchange rates and interest rates, classifying them as Level 2 in the fair value hierarchy[81][82][84][86][88] - As of June 30, 2020, the company had foreign currency derivative instruments with gross notional values of $46 million, cross-currency swaps of $250 million, and interest rate swaps of $300 million[85][87][89] - The fair value of debt was $759 million as of June 30, 2020, up from $390 million at December 31, 2019, classified as Level 2[91] NOTE 16. Commitments and Contingencies Outlines the company's legal proceedings, warranty obligations, and other significant commitments and contingent liabilities - The company is involved in litigation with Van Buren Township for $28 million related to bond payment obligations and is defending the matter vigorously[95] - OFAC is reviewing voluntary self-disclosures regarding sales into Iran totaling $12 million, which could result in civil penalties[96] Product Warranty and Recall Claims Liability (in millions) | Product Warranty and Recall Claims Liability (in millions) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :------------------------------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $49 | $48 | | Accruals for products shipped | $7 | $10 | | Settlements | $(10) | $(9) | | Ending balance | $49 | $54 | Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Visteon's financial condition, results of operations, and cash flows, highlighting strategic priorities, COVID-19 impacts, and response actions Executive Summary Provides an overview of Visteon's strategic priorities, business focus, and response to the COVID-19 pandemic - Visteon is a global automotive supplier focused on cockpit electronics and connected car solutions, anticipating growth as the cockpit transitions to digital, connected, and advanced safety features[106] - Strategic Priorities: Technology Innovation (DriveCore™ platform), Long-Term Growth and Margin Expansion (winning elevated business), Enhance Shareholder Returns (returned $3.3 billion since 2015) - COVID-19 Response: Enhanced liquidity by drawing $400 million from revolving credit facility, announced restructuring programs, implemented temporary global compensation reductions (CEO 40%, executive committee 30%, other employees 20%), and produced protective face shields[107] Global Automotive Market Conditions and Production Levels Analyzes global light vehicle production trends and market conditions, particularly impacted by COVID-19 - Second quarter 2020 global light vehicle production decreased 45% year-over-year due to COVID-19, with significant declines across all regions except China, which saw a 7.1% increase in Q2 2020[111][112] Light Vehicle Production (Units in millions) | Light Vehicle Production (Units in millions) | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change (%) | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change (%) | | :----------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :------------------------------- | :------------------------------- | :--------- | | China | 6.0 | 5.6 | 7.1% | 9.3 | 11.7 | (20.9)% | | Other Asia Pacific | 2.4 | 5.5 | (55.7)% | 7.4 | 11.1 | (33.3)% | | Europe | 2.1 | 5.6 | (62.3)% | 6.8 | 11.2 | (39.3)% | | Americas | 1.5 | 5.1 | (71.3)% | 5.9 | 10.2 | (42.1)% | | Global | 12.3 | 22.3 | (44.9)% | 30.1 | 45.2 | (33.4)% | Results of Operations - Three Months Ended June 30, 2020 and 2019 Compares the company's financial performance for the three-month periods, focusing on sales, margins, and profitability Results of Operations - Three Months Ended June 30 (in millions) | Metric (in millions) | 2020 | 2019 | Change | | :------------------- | :--- | :--- | :----- | | Net sales | $371 | $733 | $(362) | | Gross margin | $4 | $70 | $(66) | | Net income (loss) attributable to Visteon Corporation | $(45) | $7 | $(52) | | Adjusted EBITDA | $(3) | $46 | $(49) | - Net sales decreased by $362 million, primarily due to $350 million from lower volumes and net new business driven by COVID-19 impacts[115] - Gross margin declined by $66 million, from $70 million (9.5% of sales) in 2019 to $4 million (1.1% of sales) in 2020, mainly due to unfavorable volumes and product mix ($127 million impact)[118] - Net loss attributable to Visteon was $45 million, a $52 million decrease from prior year's net income, driven by lower gross margin and higher restructuring expense, partially offset by reduced SG&A and income taxes[125] Results of Operations - Six Months Ended June 30, 2020 and 2019 Compares the company's financial performance for the six-month periods, focusing on sales, margins, and profitability Results of Operations - Six Months Ended June 30 (in millions) | Metric (in millions) | 2020 | 2019 | Change | | :------------------- | :--- | :--- | :----- | | Net sales | $1,014 | $1,470 | $(456) | | Gross margin | $57 | $136 | $(79) | | Net income (loss) attributable to Visteon Corporation | $(80) | $21 | $(101) | | Adjusted EBITDA | $30 | $87 | $(57) | - Net sales decreased by $456 million, primarily due to $421 million from unfavorable volumes and net new business driven by COVID-19[131] - Gross margin declined by $79 million, from $136 million (9.3% of sales) in 2019 to $57 million (5.6% of sales) in 2020, mainly due to unfavorable volumes and product mix ($162 million impact)[134] - Net loss attributable to Visteon was $80 million, a $101 million decrease from prior year's net income, primarily due to higher restructuring expense ($36 million), decreased gross margin ($79 million), and higher income tax provision ($4 million)[143] Liquidity Discusses the company's sources and uses of cash, including cash balances, credit facilities, and capital allocation - The company's primary liquidity sources are cash flows from operations, existing cash balances, and available credit facilities, which are believed to be sufficient despite COVID-19 challenges[147] - As of June 30, 2020, total cash was $759 million (including $4 million restricted cash), with $342 million located outside the U.S., of which $145 million is considered permanently reinvested[151] - The company has $350 million in term loan debt and $400 million outstanding from its revolving credit facility, fully drawn on March 19, 2020[149] - The company does not intend to repurchase additional shares, despite $364 million remaining under Board authorization[152] Cash Flows Analyzes cash generated from or used in operating, investing, and financing activities - Operating activities used $13 million cash during the six months ended June 30, 2020, a $74 million decrease from the prior year, primarily due to lower adjusted EBITDA and reduced cash from trade working capital[156] - Investing activities used $57 million, including $65 million in capital expenditures, a slight decrease from $67 million used in 2019[157][158] - Financing activities generated $363 million, primarily from $400 million in revolving credit facility borrowings, offsetting share repurchases and dividends[159] Debt and Capital Structure Refers to detailed information on the company's debt facilities and capital structure - Refer to Note 10, 'Debt' for detailed information on the company's debt facilities[161] Significant Accounting Policies and Critical Accounting Estimates Refers to detailed information on the company's key accounting policies and estimates - Refer to Note 1, 'Summary of Significant Accounting Policies' for detailed information[162] Fair Value Measurements Refers to detailed information on the company's fair value measurements and financial instruments - Refer to Note 15, 'Fair Value Measurements and Financial Instruments' for detailed information[163] Recent Accounting Pronouncements Refers to detailed information on recently adopted and evaluated accounting standards - Refer to Note 1, 'Summary of Significant Accounting Policies' for detailed information[164] Item 3 - Quantitative and Qualitative Disclosures about Market Risk This section outlines the company's exposure to market risks, including changes in currency exchange rates, interest rates, and commodity prices, and how these risks are managed - Visteon is exposed to foreign currency risk (Euro, Japanese Yen, Thai Baht, Mexican Peso), interest rate risk, and commodity price risk[169][170] - Derivative financial instruments are used for hedging, not speculation, to mitigate market risks, with counterparties being major financial institutions[169] - A hypothetical 10% change in currency exchange rates would result in a pre-tax gain or loss of $33 million for currency derivative financial instruments as of June 30, 2020[172] Item 4 - Controls and Procedures This section confirms the effectiveness of Visteon's disclosure controls and procedures and reports no material changes in internal control over financial reporting - The company's disclosure controls and procedures were effective as of June 30, 2020[176] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2020[177] Part II - Other Information Item 1 - Legal Proceedings This section refers to Note 16, 'Commitments and Contingencies,' for details on legal proceedings, which include litigation with Van Buren Township and an ongoing OFAC review - Legal proceedings information is incorporated by reference from Note 16, 'Commitments and Contingencies'[180] Item 1A - Risk Factors This section supplements the risk factors from the Annual Report on Form 10-K, highlighting the adverse impacts of the COVID-19 pandemic on the company's business and financial condition - The COVID-19 pandemic has adversely affected and may continue to affect the company's business, operations, and financial condition[182] - Disruptions or delays in the supply chain, potentially leading to higher costs - Significant decline in demand from customers due to containment efforts - Potential delays or abandonment of customer projects[182][183] - The extent of future COVID-19 impacts is highly uncertain and could significantly heighten other business risks, including liquidity and indebtedness[184] Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds This section states that there were no unregistered sales of equity securities or purchases of the company's common stock during the second quarter of 2020 - No purchases of the company's common stock were made by or on behalf of the company during the second quarter of 2020[185] Item 6 - Exhibits This section lists the exhibits filed with the report, including certifications from the CEO and CFO, and XBRL instance and taxonomy documents - The exhibit index is located on page 40 and includes certifications (Rule 13a-14(a) and Section 1350) from the Chief Executive Officer and Senior Vice President, Chief Financial Officer, dated July 30, 2020[187][188] - XBRL Instance and Taxonomy Extension Documents are included as Exhibit 101[188]