<PAGE> 1
[NEWS RELEASE]
EXHIBIT 20
Contacts: Media Inquiries:
Liane Smyth Visteon Corporation
313-755-2916 Public Affairs
[email protected] 5500 Auto Club Drive
Dearborn MI 48126
Investor Inquiries: Facsimile 313-755-7983
Kent Niederhofer
313-755-3699
[email protected]
VISTEON CORPORATION EARNS $48 MILLION IN THIRD QUARTER - 37 CENTS PER SHARE
DEARBORN, Mich., Oct. 19, 2000 - Visteon Corporation (NYSE: VC) today
announced that it earned $48 million or $0.37 cents per share during the
Third Quarter of 2000. This compares with record third quarter earnings of
$155 million a year ago. This is Visteon's first full quarterly results
announcement since becoming an independent, publicly traded company in June.
Adjusting 1999 for the effects of a one-time price realignment of 5 percent
that resulted from Visteon's separation from Ford Motor Company, and other
independence-related costs, third quarter 2000 earnings would have been up
$2 million versus 1999 on a pro forma basis.
Third quarter revenue was $4.4 billion in 2000, down 4.3 percent compared
with 1999, and the after-tax return on sales was 1.2 percent.
Visteon's net income for the first nine months of 2000 totaled $357 million.
Revenue for the first three quarters was $14.9 billion and after-tax return
on sales was 2.5 percent.
Visteon has secured $2.3 billion in annual, incremental new business through
the first nine months of 2000. The new business comes from customers such as
the VW Group, General Motors, DaimlerChrysler, PSA Peugeot Citroen, Renault,
Nissan, Honda, Fiat, Kia and Ford.
"We had a solid third quarter as a newly independent company," said Visteon
Executive Vice President and Chief Financial Officer Dan Coulson. "We have
strong cash flow, good operating results and continued business growth
despite the weakness of the Euro and production cutbacks from Ford Motor
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[NEWS RELEASE]
Company. We will continue to focus on these areas in order to deliver solid
fourth quarter results and achieve all of our milestones."
Visteon also focused on several key initiatives in the third quarter
including:
- Through the first nine months of 2000, Visteon continued to make
progress toward its goal of achieving 20 percent of non-Ford business
by 2002. Thirty-three percent of the new business contracts won in the
first three quarters of 2000 were with non-Ford customers and
one-quarter of those were with customers outside of North America.
- Visteon reduced costs by about $170 million dollars, which brings
total cost savings to $320 million through the first nine months of the
year. Visteon's milestone for cost reductions in 2000 is $450 million.
- Visteon has run more than $200 million in goods and services through
on-line auctions and intends to increase that to $400 million for the
full year. Visteon also has joined Covisint, the global online
automotive purchasing exchange formed by Ford, General Motors,
DaimlerChrysler, Nissan and Renault.
- During the third quarter, Visteon's operating cash flow before
acquisitions and dividends was $471 million positive.
- Visteon appointed Mike Johnston as President and Chief Operating
Officer. Johnston has extensive experience in the automotive supplier
and aerospace industries.
- Visteon formed a new Telematics/Multimedia business system dedicated to
developing and delivering mobile wireless information, entertainment,
audio, safety, security and convenience products for the rapidly
evolving worldwide market.
- Visteon sold $1.2 billion in global notes offered in five and 10-year
maturities. The proceeds of the sale were used to repay outstanding
debt incurred as the result of Visteon's recent separation from Ford
Motor Company.
- Visteon formed a number of strategic partnerships and alliances
including: a joint venture with The Budd Company to provide chassis
systems to General Motors; an alliance with iBiquity Digital
Corporation to develop radio broadcast technology; and a relationship
with
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[NEWS RELEASE]
Raytheon Company to develop radar-based sensor technology for vehicle
"cocoon" safety products.
- Products introduced include: a totally-integrated plastic fuel tank
that will help manufacturers meet Zero Emission standards; Driver
Vision at Night that uses near-infrared technology to enhance the
driver's view of the road; and the MACH(R) multimedia brand of products
to deliver the best in technology and innovation in multimedia systems.
- Later this month, the U.S. Environmental Protection Agency (EPA) will
present Visteon its 2000 Climate Protection Award for
Superintegration(TM). Superintegration(TM) is Visteon's systems
approach that combines components into modules that result in improved
packaging, reduced weight and lower cost.
Visteon Corporation is a leading full-service supplier that delivers
consumer-driven technology solutions to automotive manufacturers worldwide
and through multiple channels within the global automotive aftermarket.
Visteon has a global delivery system of more than 130 technical,
manufacturing, sales, and service facilities located in 23 countries. It has
81,000 employees working in three business segments: Dynamics and Energy
Conversion; Comfort, Communication and Safety; and Glass.
This press release may contain forward-looking statements made pursuant to
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are not guarantees of future results and conditions but rather
are subject to various risks and uncertainties, some of which are and will
be identified as "the Risk Factors" in Visteon's SEC filings. See "Risk
Factors" section of Visteon's prospectus dated June 13, 2000 as filed with
the SEC on June 14, 2000. Should any risks and uncertainties develop into
actual events, these developments could have material adverse effects on
Visteon's business, financial condition and results of operations.
###
Visteon news releases, photographs and product specification details
are available at www.visteon.com
3.
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VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
For the Periods Ended September 30, 2000 and 1999
(in millions, except per share amounts)
<TABLE>
<CAPTION>
Third Quarter First Nine Months
-------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
SALES
Ford and affiliates $3,675 $3,840 $12,722 $12,809
Other customers 729 760 2,216 1,626
------ ------ ------- -------
Total sales 4,404 4,600 14,938 14,435
COSTS AND EXPENSES (Note 2)
Costs of sales 4,128 4,146 13,772 12,917
Selling, administrative and other expenses 183 174 552 479
------ ------ ------- -------
Total costs and expenses 4,311 4,320 14,324 13,396
OPERATING INCOME 93 280 614 1,039
Interest income 21 26 73 50
Interest expense 40 50 127 99
------ ------ -------- -------
Net interest expense (19) (24) (54) (49)
Equity in net income of affiliated companies 8 4 25 32
------ ------ ------- -------
INCOME BEFORE INCOME TAXES 82 260 585 1,022
Provision for income taxes 27 96 209 372
------ ------ ------- -------
INCOME BEFORE MINORITY INTERESTS 55 164 376 650
Minority interests in net income of subsidiaries 7 9 19 10
------ ------ ------- -------
NET INCOME $ 48 $ 155 $ 357 $ 640
====== ====== ======= =======
Average number of shares of Common Stock
outstanding (Note 5) 131 130 130 130
EARNINGS AND DIVIDENDS PER SHARE (NOTE 5)
Basic and diluted $ 0.37 $ 1.19 $ 2.75 $ 4.92
Cash dividends $ 0.06 $ - $ 0.06 $ -
</TABLE>
The accompanying notes are part of the financial statements.
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VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------- ---------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,190 $ 1,849
Marketable securities 126 -
------- -------
Total cash and marketable securities 1,316 1,849
Accounts and notes receivable -- Ford and affiliates 1,661 1,578
Accounts receivable -- other customers 801 613
------- -------
Total receivables 2,462 2,191
Inventories (Note 6) 838 751
Deferred income taxes 34 110
Prepaid expenses and other current assets 164 295
------- -------
Total current assets 4,814 5,196
Equity in net assets of affiliated companies 212 205
Net property 5,638 5,789
Deferred income taxes 39 362
Other assets 524 897
------- -------
Total assets $11,227 $12,449
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade payables $ 1,879 $ 3,150
Accrued liabilities 1,304 1,211
Income taxes payable 43 153
Debt payable within one year (Note 3) 642 961
------- -------
Total current liabilities 3,868 5,475
Long-term debt (Note 3) 1,364 1,358
Other liabilities (Note 4) 2,407 3,964
Deferred income taxes 19 153
------- -------
Total liabilities 7,658 10,950
STOCKHOLDERS' EQUITY (NOTES 7,8 AND 10)
Capital stock
Preferred Stock, par value $1.00, 50 million shares
authorized, none outstanding - -
Common Stock, par value $1.00, 500 million shares authorized,
131 million shares issued and outstanding 131 -
Capital in excess of par value of stock 3,311 -
Prior owner's net investment - 1,566
Accumulated other comprehensive income (210) (67)
Other (12) -
Earnings retained for use in business 349 -
------- -------
Total stockholders' equity 3,569 1,499
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,227 $12,449
======= =======
</TABLE>
The accompanying notes are part of the financial statements.
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VISTEON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Periods Ended September 30, 2000 and 1999
(in millions)
<TABLE>
<CAPTION>
First Nine First Nine
Months 2000 Months 1999
---------------- --------------
(unaudited)
<S> <C> <C>
CASH AND CASH EQUIVALENTS AT JANUARY 1 $ 1,849 $ 542
Cash flows (used in)/provided by operating activities (922) 1,782
Cash flows from investing activities
Capital expenditures (503) (503)
Acquisitions and investments in joint ventures, net (30) (534)
Purchases of securities (126) -
Other (14) (28)
------- -------
Net cash used in investing activities (673) (1,065)
Cash flows from financing activities
Cash distributions from/(to) prior owner 85 (291)
Commercial paper issuances, net 302 -
Payments of short-term debt (1,775) (17)
Proceeds from issuance of short-term debt 1,374 -
Proceeds from issuance of other debt 1,212 1,297
Principal payments on other debt (185) (261)
Dividends paid (8) -
Other (86) 3
------- -------
Net cash provided by financing activities 919 731
Effect of exchange rate changes on cash 17 (8)
------- -------
Net (decrease)/increase in cash and cash equivalents (659) 1,440
------- -------
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30 $ 1,190 $ 1,982
======= =======
</TABLE>
The accompanying notes are part of the financial statements.
F-3
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VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Financial Statements - The financial data presented herein are unaudited,
but in the opinion of management reflect those adjustments necessary for a
fair presentation of such information. Results for interim periods should
not be considered indicative of results for a full year. Reference should
be made to the financial statements contained in the registrant's
prospectus dated June 13, 2000 as filed with the Securities and Exchange
Commission on June 14, 2000. For purposes of Notes to Financial Statements,
"Visteon" or the "Company" means Visteon Corporation and its majority owned
subsidiaries unless the context requires otherwise.
Visteon is the world's second largest supplier of automotive systems,
modules and components to global vehicle manufacturers. Ford Motor Company
("Ford") established Visteon as a wholly-owned subsidiary in January 2000,
and subsequently contributed or otherwise transferred to Visteon the assets
and liabilities comprising Ford's automotive components and systems
business. Visteon became an independent company when Ford distributed all
shares of Visteon common stock then outstanding to the holders of record of
Ford common and Class B stock on June 28, 2000 (the "spin-off").
2. Selected costs and expenses are summarized as follows (in millions):
<TABLE>
<CAPTION>
First Nine
Third Quarter Months
------------------ -------------------
2000 1999 2000 1999
------- ------- -------- --------
<S> <C> <C> <C> <C>
Depreciation $147 $160 $446 $423
Amortization 24 26 67 63
</TABLE>
Visteon recorded a pre-tax charge of approximately $13 million ($8
million after-tax) and $5 million ($3 million after-tax) in the second and
third quarters of 2000, respectively, for Visteon-designated employees that
are part of special voluntary retirement and separation programs announced
previously by Visteon.
3. Debt - On August 3, 2000, Visteon completed a public offering of unsecured
term debt securities totaling $1.2 billion with maturities of five years
and ten years. The offering included $500 million of securities maturing on
August 1, 2005 bearing interest at a rate of 7.95% per annum and $700
million of securities maturing on August 1, 2010 bearing interest at a rate
of 8.25% per annum. The proceeds of the offering were used to refinance
$1.2 billion previously outstanding under an unsecured financing
arrangement with a third-party lender.
In the second quarter of 2000, Visteon established a commercial paper
program under which, at September 30, 2000, $302 million was outstanding
with a weighted average maturity of 23 days and a weighted average interest
rate of about 6.8%. In addition, Visteon entered into financing
arrangements in the second quarter with third-party lenders to provide up
to $2.0 billion of contractually committed, unsecured revolving credit
facilities. The revolving credit facilities are evenly split between
364-day and 5-year commitments, maturing in June 2001 and June 2005,
respectively. Borrowings under the revolving credit facilities bear
interest based on a variable interest rate option selected at the time of
borrowing. As of September 30, 2000, there were no amounts outstanding
under the revolving credit facilities.
4. Pension and Other Postretirement Benefits - Under the terms of Visteon's
separation from Ford, Ford has retained the pension, postretirement health
care and postretirement retiree life insurance obligations for most
Visteon-designated employees of Ford who retired prior to the spin-off.
Ford also retained the related Voluntary Employees' Beneficiary Association
assets. The asset and liability transfers between Ford and Visteon pension
and other postretirement benefit plans reduced Visteon's net pension and
other postretirement related liabilities by about $1.5 billion. Demographic
and actuarial assumptions were used in estimating liability transfers at
separation.
F-4
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VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(unaudited)
5. Income Per Share of Common Stock - Basic income per share of common stock
is calculated by dividing the income attributable to common stock by the
average number of shares of common stock outstanding during the applicable
period, adjusted for restricted stock. For purposes of the earnings per
share calculations, 130 million shares of common stock are treated as
outstanding for periods prior to our spin-off from Ford. The calculation of
diluted income per share of common stock takes into account the effect of
dilutive potential common stock, such as stock options and other
stock-based awards.
Income per share of common stock was as follows (in millions, except per
share amounts):
<TABLE>
<CAPTION>
Third Quarter 2000 Third Quarter 1999
----------------------- -----------------------
Income Shares Income Shares
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Net income $ 48 130 $ 155 130
Basic income per share $0.37 $1.19
----------------------
Basic income and shares $ 48 130 $ 155 130
Net dilutive effect of options - - - -
----- --- ----- ---
Diluted income and shares $ 48 130 $ 155 130
Diluted income per share $0.37 $1.19
------------------------
<CAPTION>
First Nine Months 2000 First Nine Months 1999
------------------------ -----------------------
Income Shares Income Shares
------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 357 130 $ 640 130
Basic income per share $2.75 $4.92
----------------------
Basic income and shares $ 357 130 $ 640 130
Net dilutive effect of options - - - -
----- --- ----- ---
Diluted income and shares $ 357 130 $ 640 130
Diluted income per share $2.75 $4.92
------------------------
</TABLE>
Visteon sponsors a stock-based incentive plan ("Long-Term Incentive
Plan" or "LTIP"). Effective at the date of the spin-off and subject to
stockholder approval, Visteon granted to employees about 800,000 shares of
restricted stock and about 2 million stock options with an exercise price
equal to the average of the highest and lowest prices at which Visteon
common stock was traded on the New York Stock Exchange on that date. Net
issuances of restricted stock during the third quarter of 2000 were about
133,000 shares. Restricted stock awards will vest on the fifth anniversary
of the date of grant. Stock options will become exercisable 33% after one
year from the date of grant, an additional 33% after two years and in full
after three years, and expire after 10 years from the date of grant.
6. Inventories are summarized as follows (in millions):
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------- ------------
<S> <C> <C>
Raw materials, work in process and supplies $731 $653
Finished products 107 98
---- ----
Total inventories $838 $751
==== ====
U.S. inventories $513 $434
</TABLE>
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VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(unaudited)
7. Comprehensive Income - Other comprehensive income includes foreign currency
translation adjustments. Total comprehensive income is summarized as
follows (in millions):
<TABLE>
<CAPTION>
First Nine
Third Quarter Months
--------------------- --------------------
2000 1999 2000 1999
-------- -------- ------- ---------
<S> <C> <C> <C> <C>
Net income $ 48 $155 $357 $640
Other comprehensive income/(loss) (85) 45 (143) (15)
---- ---- ---- ----
Total comprehensive income/(loss) $(37) $200 $214 $625
==== ==== ==== ====
</TABLE>
8. Stockholders' Equity - Changes in stockholders' equity for the first nine
months of 2000 are summarized as follows (in millions):
<TABLE>
<CAPTION>
Capital Earnings
in Retained Accumulated Prior
Excess for Use Other Owner's
Common Stock of Par in Comprehensive Net
Shares Amount Value Business Other Income Investment Total
------ ------ ----- -------- ----- ------ ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at
January 1, 2000 $ (67) $ 1,566 $1,499
Net transfers and
settlements of
balances with
prior owner 1,864 1,864
Capitalization/
reclassification
of prior owner's
net investment 130 $130 $3,300 (3,430) 0
Issuance of
restricted stock 1 1 11 $(12) 0
Net income $357 357
Dividends (8) (8)
Foreign currency
translation
adjustments (143) (143)
--- ---- ------ ---- ---- ----- ------- ------
Balances at
September 30, 2000 131 $131 $3,311 $349 $(12) $(210) $ 0 $3,569
=== ==== ====== ==== ==== ===== ======= ======
</TABLE>
Net transfers and settlements of balances are primarily related to
Ford converting $1,120 million of debt owed to it by Visteon under an
intracompany revolving loan arrangement into an equity investment in
Visteon, Ford retaining about $573 million of prepaid health care amounts
related to active employees, and asset and liability transfers between Ford
and Visteon postretirement benefit plans, net of related deferred taxes.
F-6
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VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(unaudited)
9. Segment Information - Visteon's reportable operating segments are Dynamics
& Energy Conversion; Comfort, Communication & Safety; and Glass. Financial
information for the reportable operating segments is summarized as follows
(in millions):
<TABLE>
<CAPTION>
DYNAMICS & COMFORT,
ENERGY COMMUNICATION & TOTAL
CONVERSION SAFETY GLASS VISTEON
--------------- ----------------- ------------- ------------
<S> <C> <C> <C> <C>
Third Quarter
2000
----
Sales $2,032 $2,192 $180 $ 4,404
Income before taxes 7 90 2 82
Net income 5 52 2 48
Average assets 5,053 5,834 574 11,461
1999
----
Sales $2,074 $2,344 $182 $ 4,600
Income/(loss) before taxes 97 181 (1) 260
Net income/(loss) 61 105 (1) 155
Average assets 5,357 5,520 703 11,580
First Nine Months
2000
----
Sales $6,912 $7,445 $581 $14,938
Income/(loss) before taxes 208 441 (18) 585
Net income/(loss) 132 265 (10) 357
Average assets 5,182 5,987 668 11,837
1999
----
Sales $6,899 $6,952 $584 $14,435
Income before taxes 391 657 16 1,022
Net income 246 408 12 640
Average assets 5,148 4,819 690 10,657
</TABLE>
Total income before taxes in the table above includes $17 million, $46
million, $17 million and $42 million of net interest expense not allocated
to the reportable operating segments for the third quarter 2000, first nine
months of 2000, third quarter 1999 and first nine months of 1999,
respectively. Total net income in the table above includes $11 million, $30
million, $10 million and $26 million of expense related to net interest
expense not allocated to the reportable operating segments for the third
quarter 2000, first nine months 2000, third quarter 1999 and first nine
months 1999, respectively. Segment financial information for the first nine
months of 2000 reflects a revised allocation within the reportable
operating segments of certain costs incurred during the first half of 2000.
10. Other - On October 11, 2000, the Board of Directors of Visteon declared a
quarterly dividend of $0.06 per share on the Company's common stock. The
dividend is payable on December 1, 2000 to shareholders of record as of
November 1, 2000.
On June 2, 2000, Visteon and Ford signed a non-binding letter of
intent with Pilkington plc, relating to Visteon's Glass business. The
parties have agreed to negotiate the terms of a joint venture, to be owned
80.1% by Pilkington and 19.9% by Visteon, which would acquire Visteon's
Glass business for cash consideration and assumption of certain liabilities
and would assume operational management of that business.
For the year ended December 31, 1999, the Glass segment represented
about 6% of Visteon's average assets, 4% of Visteon's total sales and less
than one half of one percent of Visteon's net income. Visteon's Carlite(R)
aftermarket operations would be included in the business to be transferred
to the joint venture. In connection with the transaction, Ford would enter
into a separate supply agreement with the joint venture, which would
supersede Ford's supply agreement with Visteon as it relates to the Glass
segment. If a definitive agreement is reached, then, depending upon its
terms, this transaction would likely result in Visteon incurring a
significant charge to earnings. There can be no assurance, however, that a
definitive agreement will be reached at any particular time, or at all, or
that it will not differ materially from the description above.
F-7
