Visteon Corporation
02/19/2026 | Press release | Distributed by Public on 02/19/2026 06:15
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis ("MD&A") is intended to help the reader understand the results of operations, financial condition, and cash flows of the Company. 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".
Executive Summary
Strategic Priorities
Visteon is a global automotive technology company serving the mobility industry, dedicated to creating more enjoyable, connected, and safe driving experiences. The Company's platforms leverage proven, scalable hardware and software solutions that enable the digital, electric, and autonomous evolution of its global automotive customers. The automotive mobility market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital, incorporates increased connectivity through onboard computing, software and cloud-enabled features, and includes more advanced safety features.
The Company has laid out the following strategic priorities:
•Technology Innovation - The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, and voice enabled. The Company'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. The Company is primarily focused on allocating capital to high-returning organic initiatives that increase internal capabilities, attractive inorganic growth 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 $226 million of Company common stock under this program. During the year ended December 31, 2025, the Company paid a total of $15 million of quarterly cash dividends. During the year ended December 31, 2025, Visteon paid a net cash outlay of $50 million on inorganic growth to acquire a user experience electronics engineering consulting and consumer research company.
Financial Results
The pie charts below highlight the sales breakdown for Visteon for the year ended December 31, 2025.
*Regional sales are based on the geographic region where sale originates and not where customer is located (excludes inter-regional eliminations).
Global Automotive Market Conditions and Production Levels
Global light-vehicle production rose approximately 4% in 2025, based on January 2026 S&P Global data, while production volumes for the Company's key customers decreased around 1%. In North America, retail demand remained resilient with U.S. seasonally adjusted retail sales above 16 million units in 2025, although electric-vehicle ("EV") purchases softened in the fourth quarter following accelerated buying activity ahead of expiring tax credits. Industry production declined slightly, and production at the Company's major customers declined at a slightly higher rate. In Europe, industry production decreased slightly compared to the prior year, while production at the Company's top customers declined at a higher rate. Jaguar Land Rover ("JLR") production was down significantly as operations were temporarily suspended during September and the company slowly ramped up production in the fourth quarter. In China, production increased by 10%, supported by continued share gains of domestic OEMs, and production at the Company's key customers increased year over year but continued to lag the broader market due to ongoing shifts in OEM mix.
For the full year 2026, S&P Global expects global light-vehicle production to decrease slightly compared to 2025, and production volumes for the Company's key customers are anticipated to decline by a low-single-digit percentage. Market conditions remain mixed across regions, with retail demand in the U.S. remaining stable, though sales of EVs are expected to decline due to the recent expiration of certain tax credits. Retail demand in Europe is forecasted to increase slightly, while retail demand in China is forecasted to decline marginally due to recent changes in government incentives. In 2026, memory chip market conditions may create cost pressures and have the potential to affect industry production volumes, as memory supplier capacity is increasingly allocated to support growth in data center infrastructure. The impact of tariffs on the automotive industry remains uncertain, with the potential to increase production costs and weigh on future vehicle volumes; however, the effects have been minimal to date.
The industry continues to face ongoing risks related to tariffs, vehicle affordability, economic uncertainty, geopolitical developments, production disruptions, and changes in customer market share. The potential impact on future periods' financial statements, results of operations, and cash flows will depend on the evolution of tariff policies, plant production schedules, supply-chain conditions, and the pace of EV adoption.
Company Highlights
In 2025, Visteon continued to progress on its long-term growth strategy, making meaningful progress across product development, customer expansion, operational execution, and capital allocation, despite a challenging and uneven automotive environment.
Sales were $3,768 million, down 3% year over year, reflecting lower customer commodity price recoveries, continued market weakness in China and lower demand for its battery management system. Despite these headwinds, Visteon continued to outperform underlying customer production trends, supported by new product launches, strong performance in displays, and disciplined commercial execution. Net income attributable to Visteon was $201 million, reflecting a decline from the prior year due largely to a higher income tax provision driven primarily by changes in the Company's valuation allowance assessments, offset in part by lower restructuring costs and higher earnings from non-consolidated affiliates. Adjusted EBITDA1was $492 million reflecting continued operational discipline and effective cost management despite lower reported sales.
Strategic execution in 2025 was highlighted by strong new business momentum including next-generation cockpit technologies. During the year, Visteon secured $7.4 billion of new business awards across its product portfolio, reflecting broad-based customer demand for digital cockpits and advanced displays. Notably, the Company secured two SmartCore™ high-performance computing ("HPC") program awards, reinforcing customer confidence in the scalability of its cockpit domain controller architecture and its ability to support increased software content and advanced in-cabin functionality. The 2025 business wins of $7.4 billion included $3.6 billion of new display wins across 17 OEM customers. The Company also launched 18 new display products and expanded beyond its core markets, securing $1.1 billion of new business in two-wheeler and commercial vehicle applications.
Operationally, in 2025 Visteon delivered its fifth consecutive year of positive net income attributable to Visteon, by generating $201 million. While net income attributable to Visteon declined year-over-year driven primarily by changes in the Company's valuation allowance assessments, underlying profitability remained solid, supported by strong operational performance. Solid gross margin performance, disciplined cost actions, and continued commercial execution enabled the Company to maintain strong net income despite lower sales and industry volatility. The Company delivered its fifth consecutive year of Adjusted EBITDA1margin expansion, reflecting strong cost performance and disciplined commercial management.
In parallel with these commercial and operational achievements, Visteon generated strong cash flow from operations during the year, reflecting the strength of its earnings profile, disciplined working capital management, and capital efficiency. The Company also maintained a balanced approach to capital allocation, returning approximately $70 million to shareholders through share repurchases and dividends while also completing a second engineering services acquisition to further strengthen its capabilities.
Taken together, these achievements demonstrate Visteon's ability to execute across its strategic priorities, deliver measurable financial and operational results, and position the Company for sustained long-term growth.
1Adjusted EBITDA is a Non-GAAP financial measure, as defined below.
Results of Operations
Year ended December 31, 2025 Compared to Year ended December 31, 2024
The Company's consolidated results of operations for the years ended December 31, 2025 and 2024 were as follows:
| Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | Change | ||||||||||||||
| Net sales | $ | 3,768 | $ | 3,866 | $ | (98) | |||||||||||
| Cost of sales | (3,236) | (3,335) | 99 | ||||||||||||||
| Gross margin | 532 | 531 | 1 | ||||||||||||||
| Selling, general and administrative expenses | (202) | (207) | 5 | ||||||||||||||
| Restructuring, net | (8) | (32) | 24 | ||||||||||||||
| Interest income (expense), net | 9 | 2 | 7 | ||||||||||||||
| Equity in net (loss) income of non-consolidated affiliates | 8 | (3) | 11 | ||||||||||||||
| Other income (expense), net | (1) | 7 | (8) | ||||||||||||||
| Income (loss) before income taxes | 338 | 298 | 40 | ||||||||||||||
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Benefit from (provision for) income taxes2
|
(125) | 8 | (133) | ||||||||||||||
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Net income (loss)2
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213 | 306 | (93) | ||||||||||||||
| Less: Net (income) loss attributable to non-controlling interests | (12) | (10) | (2) | ||||||||||||||
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Net income (loss) attributable to Visteon Corporation2
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$ | 201 | $ | 296 | $ | (95) | |||||||||||
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Adjusted EBITDA1
|
$ | 492 | $ | 474 | $ | 18 | |||||||||||
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1Adjusted EBITDA is a Non-GAAP financial measure, as defined below.
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2Amounts shown reflect the change in accounting principle related to the method for assessing the realizability of U.S. deferred tax assets described in Note 1. "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data."
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Net Sales and Cost of Sales
| (In millions) | Net Sales | Cost of Sales | Gross Margin | ||||||||||||||
| December 31, 2024 | $ | 3,866 | $ | (3,335) | $ | 531 | |||||||||||
|
Volume, mix, and net new business
|
(106) | 85 | (21) | ||||||||||||||
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Customer pricing, net
|
(141) | - | (141) | ||||||||||||||
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Currency
|
1 | - | 1 | ||||||||||||||
| Engineering costs, net | - | (35) | (35) | ||||||||||||||
| Cost performance, design changes, and other | 148 | 49 | 197 | ||||||||||||||
| December 31, 2025 | $ | 3,768 | $ | (3,236) | $ | 532 | |||||||||||
Net sales for the year ended December 31, 2025 totaled $3,768 million, which represents a decrease of $98 million compared with 2024. Volumes and net new business decreased net sales by $106 million. Customer pricing decreased net sales by $141 million as a result of annual price reductions and lower customer recoveries due to improving supply chain dynamics. Currency increased sales by $1 million due to increases in the euro and Thai baht which were partially offset by decreases in the Indian rupee and Brazilian real. Other cost performance, design changes and other increased net sales by $148 million primarily due to one-time items and sales from the recently acquired engineering services companies.
Cost of sales decreased $99 million for the year ended December 31, 2025, when compared with 2024. Volume, mix and net new business decreased cost of sales by $85 million. Net engineering costs, excluding currency, increased cost of sales by $35 million primarily driven by recently acquired engineering services companies. Currency impacts were flat due to increases in the Mexican peso and euro which were offset by a decrease in the Brazilian real. Cost performance, design changes and other items decreased cost of sales by $49 million primarily due to operational efficiencies.
A summary of net engineering costs is shown below:
| Year Ended December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Gross engineering costs | $ | (364) | $ | (334) | |||||||
| Engineering recoveries | 144 | 143 | |||||||||
| Engineering costs, net | $ | (220) | $ | (191) | |||||||
Gross engineering costs relate to forward model program development and advanced engineering activities and services. Net engineering costs of $364 million for the year ended December 31, 2025, including the impacts of currency, were $29 million higher than the same period of 2024. The increase is primarily due to recent engineering services acquisitions, partially offset by lower personnel cost and favorable impacts from currency.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses were $202 million, 5.4% of net sales, and $207 million, 5.4% of net sales, for the years ended December 31, 2025 and 2024, respectively. Expenses decreased during 2025 due to lower bad debt expense, partially offset by the impact of currency due to increases in the euro.
Restructuring, net
The Company recorded $8 million and $32 million of net restructuring expense for the years ended December 31, 2025 and 2024, respectively. These expenses are primarily related to employee severance. The decrease is primarily related to the non-recurrence of the third quarter 2024 restructuring program.
Interest, Net
Net interest income for the year ended December 31, 2025, was $9 million, compared to interest income of $2 million in the same period 2024. The increase in interest income, net of expense, during 2025 is due to interest income on increased cash balances and decreased interest expense due to a lower principal debt balance and lower interest rates on debt.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net income of non-consolidated affiliates was income of $8 million and a loss of $3 million for the years ended December 31, 2025 and 2024, respectively. The increased income is due to increased net operating profits at affiliates.
Other Income (Loss), Net
Other income (loss), net consists of the following:
| Year Ended December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Pension financing benefits, net | $ | 8 | $ | 11 | |||||||
| Pension settlement and curtailment | (7) | (4) | |||||||||
| Other gains (costs) | (2) | - | |||||||||
| $ | (1) | $ | 7 | ||||||||
Pension financing benefits, net decreased due to lower expected return on assets related to employee benefit plans.
During the year ended December 31, 2025, the Company entered into an annuity contract to transfer a portion of its U.S. defined benefit pension obligations to a third-party insurer, resulting in a settlement loss of $7 million.
During the year ended December 31, 2024 the Company incurred settlement and curtailment losses of $4 million related to an early buyout of individuals in the U.S. defined benefit plan.
Income Taxes
The Company recorded an income tax provision of $125 million for the year ended December 31, 2025, compared to a $8 million income tax benefit in 2024. The year-over-year change of $133 million was driven primarily by changes in the Company's valuation allowance assessments.
During the fourth quarter of 2025, the Company updated its forward-looking profitability projections and reassessed the expected utilization of its deferred tax carryforward attributes using the tax law ordering approach, consistent with the change in accounting principle described in Note 1, "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data." This reassessment reflected the estimated impacts of the One Big Beautiful Bill Act (the "Act") and refinements to state-level valuation allowance estimates. As a result, the Company recognized a combined $55 million of discrete income tax expense during 2025. Also in the fourth quarter of 2025, the Company concluded that certain deferred tax assets in Germany and Brazil were more likely than not to be realized, resulting in a $20 million non-cash tax benefit.
In 2024, the Company determined that additional deferred tax assets in the U.S. and Germany were more likely than not to be realized, resulting in non-cash tax benefits of $71 million and $7 million, respectively. The net year-over-year change in valuation allowance adjustments contributed $113 million to the increase in income tax expense. The remaining $20 million increase is primarily attributable to the overall increase in pretax income, including changes in the mix of earnings and differing tax rates between jurisdictions, withholding taxes, and uncertain tax positions.
For additional information regarding the Company's valuation allowances, see Note 14, "Income Taxes" within Part II, Item 8, "Financial Statements and Supplementary Data."
Adjusted EBITDA1
The Company defines Adjusted EBITDA1as 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.
Adjusted EBITDA1is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA1may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA1is 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. Adjusted EBITDA1has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The Company uses Adjusted EBITDA1as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA1to measure compliance with certain covenants.
The reconciliation of Adjusted EBITDA1to net income attributable to Visteon for the years ended December 31, 2025 and 2024 is as follows:
| Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | Change | ||||||||||||||
|
Net income (loss) attributable to Visteon Corporation2
|
$ | 201 | $ | 296 | $ | (95) | |||||||||||
| Depreciation and amortization | 109 | 96 | 13 | ||||||||||||||
| Restructuring, net | 8 | 32 | (24) | ||||||||||||||
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Provision for (benefit from) income tax2
|
125 | (8) | 133 | ||||||||||||||
| Non-cash, stock-based compensation expense | 45 | 41 | 4 | ||||||||||||||
| Interest (income) expense, net | (9) | (2) | (7) | ||||||||||||||
| Net income (loss) attributable to non-controlling interests | 12 | 10 | 2 | ||||||||||||||
| Equity in net loss (income) of non-consolidated affiliates | (8) | 3 | (11) | ||||||||||||||
| Other, net | 9 | 6 | 3 | ||||||||||||||
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Adjusted EBITDA1
|
$ | 492 | $ | 474 | $ | 18 | |||||||||||
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1Adjusted EBITDA is a Non-GAAP financial measure, as defined above.
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2Amounts shown reflect the change in accounting principle related to the method for assessing the realizability of U.S. deferred tax assets described in Note 1, "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data."
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Adjusted EBITDA1was $492 million for the year ended December 31, 2025, an increase of $18 million compared to 2024. Strong cost performance, disciplined commercial actions, and favorable one-time items, partially offset by higher warranty expense and the negative effects of volume and net new business, resulted in a net benefit of approximately $195 million. This improvement was offset by a $141 million reduction from customer pricing and lower recoveries as supply-chain conditions normalized. Adjusted EBITDA1was further impacted by $35 million of higher net engineering costs and $1 million unfavorable foreign currency effect, primarily from movements in the euro and Thai baht, partially offset by the Indian rupee.
Results of Operations
Year ended December 31, 2024 Compared to Year ended December 31, 2023
During the fourth quarter of 2025, the Company elected to change its accounting method for assessing the realizability of U.S. deferred tax assets from the incremental cash tax savings method to the tax-law-ordering method. This change is further described in Note 1, "Summary of Significant Accounting Policies", to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
For a complete analysis of our financial condition and results of operations for fiscal year 2024, including the comparison to fiscal year 2023, refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 18, 2025. The discussion presented below addresses only those sections with relevant updates resulting from the change in accounting principle.
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, net | (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 | ||||||||||||||
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Benefit from (provision for) income taxes2
|
8 | 330 | (322) | ||||||||||||||
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Net income (loss)2
|
306 | 587 | (281) | ||||||||||||||
| Less: Net (income) loss attributable to non-controlling interests | (10) | (19) | 9 | ||||||||||||||
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Net income (loss) attributable to Visteon Corporation2
|
$ | 296 | $ | 568 | $ | (272) | |||||||||||
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Adjusted EBITDA1
|
$ | 474 | $ | 434 | $ | 40 | |||||||||||
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1Adjusted EBITDA is a Non-GAAP financial measure, as defined above.
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2Amounts shown reflect the change in accounting principle related to the method for assessing the realizability of U.S. deferred tax assets described in Note 1, "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data."
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Income Taxes
The Company's benefit from income taxes was $8 million for year ended December 31, 2024, reflecting a $322 million increase compared to the $330 million benefit from income taxes in 2023. In the fourth quarter of 2023, the Company released $395 million from its deferred tax valuation allowance related to U.S. federal and certain state deferred tax assets. In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $71 million non-cash tax benefit.
Adjusted EBITDA1
The Company defines Adjusted EBITDA1as 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.
Adjusted EBITDA1is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA1may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA1is 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. Adjusted EBITDA1has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The Company uses Adjusted EBITDA1as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA1to measure compliance with certain covenants.
The reconciliation of Adjusted EBITDA1to 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 | ||||||||||||||
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Net income (loss) attributable to Visteon Corporation2
|
$ | 296 | $ | 568 | $ | (272) | |||||||||||
| Depreciation and amortization | 96 | 104 | (8) | ||||||||||||||
| Restructuring, net | 32 | 5 | 27 | ||||||||||||||
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Provision for (benefit from) income tax2
|
(8) | (330) | 322 | ||||||||||||||
| 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) | ||||||||||||||
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Adjusted EBITDA1
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$ | 474 | $ | 434 | $ | 40 | |||||||||||
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1Adjusted EBITDA is a Non-GAAP financial measure, as defined above.
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2Amounts shown reflect the change in accounting principle related to the method for assessing the realizability of U.S. deferred tax assets described in Note 1, "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data."
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Adjusted EBITDA1was $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 EBITDA1by $37 million. Foreign currency decreased Adjusted EBITDA1by $12 million, primarily attributable to the Brazilian real and Japanese yen, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased Adjusted EBITDA1by $15 million from favorable timing of recoveries.
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.
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. 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. 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, 2025, the Company's corporate credit rating has been upgraded from BB to BB+ by Standard & Poor's and from Ba2 to Ba1 by Moody's. See Note 11, "Debt" in the Company's consolidated financial statements included in Part II, 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. 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, 2025.
Cash Balances
As of December 31, 2025, the Company had total cash and equivalents of $773 million, including $2 million of restricted cash and $104 million of cash attributable to the Company's joint venture partners should the Company elect to issue cash dividends.
Cash balances totaling $573 million were located in jurisdictions outside of the U.S., of which approximately $235 million is considered permanently reinvested for funding ongoing operations outside of the U.S. If such permanently reinvested funds were repatriated to the U.S., no U.S. federal taxes would be imposed on the distribution of such foreign earnings due to U.S. tax reform enacted in December 2017. However, the Company would be required to accrue additional tax expense primarily related to foreign withholding taxes.
Other Items Affecting Liquidity
During 2025, the Company returned capital to shareholders through both dividends and share repurchases, paying $15 million in quarterly cash dividends and repurchasing 555,997 shares at an average price of $101.70, totaling $57 million. Decisions regarding future dividends remain at the sole discretion of the Board of Directors and will depend on a range of factors, including general economic conditions, the Company's financial performance, available liquidity, capital requirements, regulatory considerations, and other relevant matters. These actions reflect the Company's ongoing commitment to shareholder returns and form an integral part of its broader capital allocation strategy.
During the year ended December 31, 2025, cash contributions to the Company's defined benefit plans were $17 million related to its U.S. plans and $7 million related to its non-U.S. plans. Additionally, the Company expects to make contributions to its U.S. and Non-US defined benefit pension plans of $3 million and $8 million, respectively during 2026.
During the year ended December 31, 2025, the Company paid $15 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is provided in Note 4, "Restructuring" in the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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, 2025, the Company has contributed $15 million toward the aggregate investment commitments. As a limited partner in each entity, the Company will periodically make capital contributions toward the total commitment amount.
On March 2, 2023 the Company's board of directors authorized a share repurchase program of $300 million of common stock through December 31, 2026. Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. During the year ended December 31, 2025, the Company purchased 555,997 shares at an average price of $101.70 related to this program totaling $57 million. As of December 31, 2025, the Company has $74 million of authorized purchases of common stock remaining.
Purchase Obligations
As of December 31, 2025, the Company has contractual purchase obligations of approximately $44 million through 2029.
Leases
The Company has operating leases primarily for corporate offices, technical and engineering centers, vehicles, and certain equipment with future lease obligations ranging from 2026 to 2037. Additional discussion regarding the Company's leasing activities is provided in Note 9, "Leases" in the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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, 2025, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $23 million. The Company further expects that it is reasonably possible that the anticipated settlement of an ongoing bilateral Advance Pricing Agreement ("APA") with the U.S. Internal Revenue Service and the India Tax Authority ("ITA") could result in payment to the ITA in the range of $10 to $15 million (including interest) by the end of 2026. Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the timing of cash settlement, if any, for its remaining unrecognized tax benefits with the respective taxing authorities.
For further information related to the Company's unrecognized tax benefits, see Note 14, "Income Taxes" within Part II, Item 8, "Financial Statements and Supplementary Data." to the consolidated financial statements included in this Report.
Cash Flows
Operating Activities
The Company generated $410 million of cash from operating activities during 2025, compared with $427 million in 2024. Cash from operations benefited from strong operating performance including solid profitability and working capital management. The year-over-year change was driven primarily by higher cash tax payments of $25 million and increased incentive compensation of $13 million.
Investing Activities
Net cash used by investing activities was $181 million and $189 million during the years ended December 31, 2025 and 2024, respectively. The $8 million decrease in cash used by investing activities compared to the prior year is primarily due to decreased capital expenditures of $4 million and the decrease in acquisition of businesses, net of cash acquired, of $5 million.
Financing Activities
Net cash used by financing activities was $116 million and $100 million for during the years ended December 31, 2025 and 2024, respectively. This $16 million increase compared to the prior year is primarily attributable to cash paid for dividends to shareholders of $15 million.
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.
Fair Value Measurements
See Note 17, "Fair Value Measurements" to the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Change in Accounting Principle
Assessing Realizability of U.S. Deferred Tax Assets Accounting Method Change
During the fourth quarter of 2025, the Company changed its accounting method for assessing the realizability of its deferred tax assets and resulting valuation allowance from the incremental cash tax savings method to the tax-law-ordering methodology. The Company has determined that the tax-law-ordering methodology is preferable because it provides greater transparency regarding utilization of existing attributes and prioritizes existing attributes over future attributes. Refer to Note 1, "Summary of Significant Accounting Policies" to the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on 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 Part II, Item 8 of this Annual Report on Form 10-K. Certain policies relate to estimates that involve matters that are highly uncertain at the time the accounting estimate is made and different estimates or changes to an estimate could have a material impact on the reported financial position, changes in financial condition or results of operations. Such critical estimates are discussed below. 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.
Business Combinations
We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and any noncontrolling interest based on their fair values at the acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.
Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available. The fair value of contingent consideration arrangements is remeasured annually until settlement, with changes in fair value recognized as Other income (loss). This remeasurement requires the use of significant estimates and assumptions, which vary based on the specific criteria of underlying each arrangement.
Acquisition costs are expensed as incurred and recorded in Other income (loss) on the income statement.
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. Some of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be entitled based on historical experience and input from customer negotiations. See Note 1, "Summary of Significant Accounting Policies" in the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Product Warranty and Recall
The Company accrues for warranty obligations for products sold based on management estimates, with support from the Company's sales, engineering, quality, and legal functions, of the amount that eventually will be required to settle such obligations. These estimates consider several factors including contractual arrangements, past experience, current claims, production changes, industry developments, dealership repair practices, repair time and other relevant information available at the time the estimate is made. Management applies a consistent estimation approach that reflects the most supportable amount within the range of potential outcomes based on the information evaluated.
The Company accrues for product recall claims related to potential financial participation in customer actions to provide remedies associated with actual or threatened regulatory or court actions or the Company's determination of the potential for such actions. These accruals are based on the specific facts and circumstances underlying each matter, with support from the Company's engineering, quality, and legal functions and reflect management's best estimate of the obligations that will ultimately be incurred. See Note 19, "Commitments and Contingencies" in the Company's consolidated financial statements included in Part II, 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. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are recognized when approved. See Note 4, "Restructuring" in the Company's consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.
Pension Plans
Certain Company employees participate in defined benefit pension plans or retirement/termination indemnity plans. The Company has approximately $50 million in unfunded net pension liabilities as of December 31, 2025, of which approximately $38 million and $12 million are attributable to U.S. and non-U.S. pension plans, respectively. The determination of the Company's obligations and expense for its pension plans is dependent on assumptions set by the Company used by actuaries in calculating such amounts. 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 Part II, Item 8 of this Annual Report on Form 10-K, which are incorporated herein by reference.
Actual results that differ from assumptions used are accumulated and amortized over future periods and, accordingly, generally affect recognized expense in future periods. Therefore, assumptions used to calculate benefit obligations as of the annual measurement date directly impact the expense to be recognized in future periods. The primary assumptions affecting the Company's accounting for employee benefits, as of December 31, 2025, 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 required use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year. Over time the expected long-term rate of return on plan assets is designed to approximate actual returns. The expected long-term rate of return for pension assets has been estimated based on various inputs, including historical returns for the different asset classes held by the Company's trusts and its asset allocation, as well as inputs from internal and external sources regarding expected capital market returns, inflation, and other variables.
| U.S. Plans | Non-U.S. Plans | ||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||
|
Expected Rate of Return
|
7.06% | 7.23% | 2.00% - 10.60% | 2.00% - 9.60% | |||||||||||||
|
Long-Term Rates of Return
|
7.97% | 7.06% | 2.00% - 11.35% | 2.00% - 10.60% | |||||||||||||
| Actual Rates of Return | 12.81% | 3.79% | 5.36% | (3.33)% | |||||||||||||
The Company has set the long-term rates of return assumptions for its 2026 pension expense which range from 2.00% to 10.60% outside the U.S. and 7.06% in the U.S.
Discount rate
The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected benefit payments for each plan at its annual measurement date.
| U.S. Plans | Non-U.S. Plans | ||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||
| Weighted Average Discount Rates | 5.37% | 5.09% | 5.69% | 5.06% | |||||||||||||
| Discount Rates | 5.37% | 5.09% | 1.60-11.60% | 1.75 - 10.65% | |||||||||||||
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. 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 2025 funded status and 2026 pretax pension expense.
| Impact on U.S. 2026 Pretax Pension Expense |
Impact on U.S. Plan 2025 Funded Status |
Impact on Non-U.S. 2026 Pretax Pension Expense |
Impact on Non-U.S. Plan 2025 Funded Status |
||||||||||||||||||||
|
25 basis point decrease in discount rate (a)(b)
|
Less than -$1 million | -$11 million | Less than -$1 million | -$5 million | |||||||||||||||||||
|
25 basis point increase in discount rate (a)(b)
|
Less than +$1 million | +$11 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. | |||||||||||||||||||||||
| (b) Excludes impact of assets used to hedge discount rate volatility. | |||||||||||||||||||||||
Income Taxes
The Company's income tax expense, deferred tax assets and liabilities, and liabilities for uncertain tax positions reflect management's estimates of current and future tax obligations. Because the Company is subject to income taxation in the United States and numerous foreign jurisdictions, the determination of consolidated income tax expense requires significant judgment.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their carrying amounts in the financial statements. In assessing the realizability of deferred tax assets in each jurisdiction, the Company evaluates all available positive and negative evidence, including historical and projected future taxable income, the expected timing of reversals of temporary differences, anticipated utilization of tax attribute carryforwards such as net operating losses and foreign tax credits, and available tax planning strategies.
Management's estimates of future taxable income incorporate historical operating results, adjusted for non-recurring items, together with forecasts of federal, state, and foreign pretax operating income. These projections require significant judgment and are consistent with the assumptions used to manage the Company's operations. When the weight of available evidence indicates that it is more likely than not that a deferred tax asset will not be realized, the Company records a valuation allowance.
Effective December 31, 2025, the Company changed its method for assessing the realizability of U.S. deferred tax assets from an incremental cash-tax-savings approach to the tax-law-ordering approach. Management determined that the tax-law-ordering approach is preferable because it provides greater transparency regarding the expected utilization of existing tax attributes, prioritizes existing attributes over future attributes, aligns with prevailing practice, and is consistent with approaches publicly disclosed by peer companies. Under this approach, the Company evaluates whether existing U.S. tax carryforward deferred tax assets are expected to reduce future tax liabilities when utilized, rather than assessing realizability solely based on incremental cash-tax savings. This change in accounting principle has been applied retrospectively. See Note 1, "Summary of Significant Accounting Policies" within Part II, Item 8, "Financial Statements and Supplementary Data" for additional information.
Prior to December 31, 2023, the Company maintained a full valuation allowance against its U.S. deferred tax assets due primarily to historical cumulative losses. As of December 31, 2023, after evaluating both positive and negative evidence, including projected future taxable income supported by objective and verifiable earnings history, the Company concluded that it was more likely than not that a substantial portion of its U.S. deferred tax assets would be realized, and accordingly released a portion of the valuation allowance.
As of December 31, 2025, deferred tax assets not expected to be realized primarily relate to (i) foreign tax credit carryforwards, as the Company has generated and expects to continue generating excess credits that are not expected to be utilized prior to expiration; (ii) certain U.S. research credit carryforwards expected to expire unused; and (iii) certain state net operating loss carryforwards expected to expire prior to utilization. The ultimate realization of deferred tax assets depends on the generation of sufficient taxable income during the periods in which deductible temporary differences reverse. In making this assessment, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies.
Based on historical taxable income and projected future taxable income over the periods in which deferred tax assets are expected to be realized, 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.
See Note 14, "Income Taxes" in the Company's consolidated financial statements included in Part II, 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 Part II, Item 8 of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
Forward-Looking Statements
Certain statements contained or incorporated in this Annual Report on Form 10-K which are not statements of historical fact constitute "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Forward-looking statements give current expectations or forecasts of future events. Words such as "anticipate", "expect", "intend", "plan", "believe", "seek", "estimate" and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify 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. 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.
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. or foreign 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 (including DRAM) 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.
•Visteon's ability to grow its business with Chinese domestics OEMs and to compete with Chinese domestic suppliers as they expand their market-share outside of China.
•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, including export controls of certain parts or materials 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 or its suppliers' 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.
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