Visteon(US:VC)2026-02-19 12:14Financial Performance - Visteon reported net sales of $3,768 million for the year ended December 31, 2025, a decrease of 3% year-over-year from $3,866 million in 2024[138]. - The company's net income attributable to Visteon was $201 million in 2025, down from $296 million in 2024, primarily due to a higher income tax provision[140]. - Adjusted EBITDA for 2025 was $492 million, reflecting an increase of 4% from $474 million in 2024, demonstrating effective cost management[143]. - The Company reported a net income attributable to Visteon Corporation of $296 million for the year ended December 31, 2024, a decrease of $272 million compared to $568 million in 2023[161]. - Adjusted EBITDA for the year ended December 31, 2024, was $474 million, representing an increase of $40 million from $434 million in 2023[164]. - The Company's net sales for 2024 were $3.866 billion, down $88 million from $3.954 billion in 2023[161]. - The gross margin increased to $531 million in 2024, up $44 million from $487 million in 2023[161]. Business Development - Visteon secured $7.4 billion in new business awards in 2025, including $3.6 billion in new display wins across 17 OEM customers[139]. Shareholder Returns - The company maintained a strong balance sheet, returning approximately $70 million to shareholders through share repurchases and dividends in 2025[140]. - The Company repurchased 555,997 shares at an average price of $101.70, totaling $57 million during 2025[170]. - The Company authorized a share repurchase program of $300 million, with $74 million remaining as of December 31, 2025, after repurchasing 555,997 shares at an average price of $101.70 totaling $57 million[174]. Cash Flow and Investments - Visteon generated strong cash flow from operations in 2025, reflecting disciplined working capital management and capital efficiency[140]. - The Company had total cash and equivalents of $773 million as of December 31, 2025, including $2 million of restricted cash[168]. - Cash contributions to the Company's defined benefit plans were $17 million for U.S. plans and $7 million for non-U.S. plans during 2025[171]. - The Company has committed to invest $20 million in multiple entities focused on the automotive sector, with $15 million contributed as of December 31, 2025[173]. - The Company generated $410 million in cash from operating activities in 2025, a decrease from $427 million in 2024, primarily due to higher cash tax payments of $25 million and increased incentive compensation of $13 million[179]. - Net cash used by investing activities was $181 million in 2025, down from $189 million in 2024, attributed to decreased capital expenditures and lower business acquisitions[180]. - Net cash used by financing activities increased to $116 million in 2025 from $100 million in 2024, mainly due to $15 million paid in dividends[181]. Tax and Liabilities - The Company had unrecognized tax benefits expected to result in a cash outlay of $23 million as of December 31, 2025, with potential payments to the India Tax Authority ranging from $10 to $15 million by the end of 2026[177]. - The Company has approximately $50 million in unfunded net pension liabilities as of December 31, 2025, with $38 million attributable to U.S. plans and $12 million to non-U.S. plans[194]. - The expected long-term rate of return for U.S. pension assets is 7.06% for 2025, while non-U.S. plans range from 2.00% to 10.60%[196]. Accounting and Tax Strategy - The Company changed its accounting method for assessing the realizability of U.S. deferred tax assets to the tax-law-ordering approach effective December 31, 2025, enhancing transparency regarding tax attribute utilization[203]. - The Company released a portion of its valuation allowance against U.S. deferred tax assets as of December 31, 2023, based on projected future taxable income supported by historical earnings[204]. - As of December 31, 2025, deferred tax assets not expected to be realized primarily relate to foreign tax credit carryforwards, U.S. research credit carryforwards, and state net operating loss carryforwards[205]. - Management believes it is more likely than not that the Company will realize the benefits of its deferred tax assets, net of existing valuation allowances, based on historical and projected future taxable income[206]. Market Risks - The Company is exposed to market risks including changes in currency exchange rates, interest rates, and commodity prices, managed through fixed price contracts and derivative instruments[211]. - A hypothetical 10% favorable or adverse change in quoted currency exchange rates would result in a pretax gain or loss of approximately $22 million and $20 million for foreign currency derivative financial instruments as of December 31, 2025 and 2024, respectively[214]. - The Company manages commodity price risks primarily through negotiations with suppliers and customers, with potential future use of derivatives to hedge select commodity risks[216]. - The Company does not enter into currency exchange rate contracts to mitigate the translation exposure of foreign operating income into U.S. dollars[213]. - The Company’s ability to utilize derivatives for market risk management is dependent on credit conditions, market conditions, and the prevailing economic environment[211]. Operational Challenges - The Company faces uncertainties related to trade agreements, tariffs, and supply chain disruptions, which could materially affect future results[209]. - Legal and administrative proceedings, including product liability and warranty claims, may impact the Company's financial performance[210]. - The cyclical nature of the automotive industry poses risks to the Company's operations and financial results[210].