Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition, and cash flows of Visteon Corporation (“Visteon” or the “Company”). MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission on February 19, 2026 and the financial statements and accompanying notes to the financial statements included elsewhere herein.
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 technology 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 and Artificial Intelligence ("AI") 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, AI 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. Since 2023, the Company has returned nearly $300 million to shareholders through a combination of share repurchases and cash dividends. In June 2026, the Company reinforced its commitment to shareholder returns by authorizing a new $800 million share repurchase program extending through 2029.
Financial Results
The pie charts below highlight the net sales breakdown for Visteon for the three and six months ended June 30, 2026.
Three Months Ended June 30, 2026
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Six Months Ended June 30, 2026
*Regional net sales are based on the geographic region where sales originate and not where customer is located (excludes inter-regional eliminations).
Global Automotive Market Conditions and Production Levels
Global light‑vehicle production was flat in the second quarter of 2026 compared to 2025, based on July 2026 Mobility Global, Inc. data, with production volumes for the Company’s key customers declining by approximately 5%. In the Americas, industry production increased by approximately 1%, while production volumes at the Company’s major customers declined by an estimated 4%. Retail demand remained relatively resilient, with U.S. seasonally adjusted retail sales remaining above 16 million units. This reflected continued consumer demand for internal‑combustion and hybrid vehicles, partially offset by a decline in electric‑vehicle (“EV”) purchases following the expiration of federal EV tax credits. In Europe, industry production decreased approximately 1% compared to the prior year, while production volumes at the Company’s largest European customers declined by approximately 3%. In China, production volumes declined by approximately 3%, with production at the Company’s key customers declining by approximately 13%.
Looking ahead, Mobility Global, Inc. expects global light-vehicle production to decrease by 2% compared to 2025, with production volumes for the Company’s key customers anticipated to decline by approximately 4%. The ongoing conflict in the Middle East may further decrease production, though the magnitude of the decrease is uncertain. Memory chip market conditions are creating 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 extent to which these factors affect future financial performance will depend on the evolution of tariff policies, customer production schedules, supply chain conditions, customer market share shifts, and the pace of EV adoption.
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Results of Operations - Three Months Ended June 30, 2026 and 2025
The Company's consolidated results of operations for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30,
(In millions) 2026 2025 Change
Net sales $ 960 $ 969 $ (9)
Cost of sales (842) (828) (14)
Gross margin 118 141 (23)
Selling, general and administrative expenses (46) (48) 2
Restructuring, net 1 (1) 2
Interest income, net 3 2 1
Equity in net income (loss) of non-consolidated affiliates 2 2 —
Other income (expense), net (2) 1 (3)
Provision for income taxes2 (26) (22) (4)
Net income (loss)2 50 75 (25)
Less: Net (income) loss attributable to non-controlling interests (1) (4) 3
Net income (loss) attributable to Visteon Corporation2 $ 49 $ 71 $ (22)
Adjusted EBITDA1 $ 116 $ 134 $ (18)
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed below.
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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
Net Sales, Cost of Sales and Gross Margin
(In millions) Net Sales Cost of Sales Gross Margin
Three months ended June 30, 2025 969 $ (828) $ 141
Volume, mix, and net new business (17) 13 (4)
Currency 4 (11) (7)
Customer pricing (1) — (1)
Engineering costs, net * — (12) (12)
Cost performance, design changes and other 5 (4) 1
Three months ended June 30, 2026 960 (842) $ 118
*Excludes the impact of currency.
Net sales for the three months ended June 30, 2026 totaled $960 million, representing a decrease of $9 million compared with the same period of 2025. Volumes and net new business decreased net sales by $17 million. Customer pricing decreased net sales by $1 million as a result of annual price reductions and partially offset by higher customer recoveries due to elevated semiconductor cost. Favorable currency increased net sales by $4 million, primarily attributable to the euro, Brazilian real, and Chinese renminbi, partially offset by the Indian rupee and the Japanese yen. Other cost performance, design changes and other net sales increased by $5 million, primarily due to sales from the recently acquired engineering services companies and other commercial items.
Cost of sales increased by $14 million for the three months ended June 30, 2026 compared with the same period in 2025. Volume, mix and net new business decreased cost of sales by $13 million. Net engineering costs, excluding currency, increased cost of sales by $12 million. Foreign currency increased cost of sales by $11 million, primarily attributable to the euro, Chinese renminbi, and Brazilian real, partially offset by the Indian rupee. Cost performance, design changes and other increased cost of sales by $4 million primarily due to higher semiconductor and manufacturing costs, partially offset by ongoing cost discipline.
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A summary of net engineering costs is shown below:
Three Months Ended June 30,
(In millions) 2026 2025
Gross engineering costs $ (97) $ (88)
Engineering recoveries 35 36
Engineering costs, net $ (62) $ (52)
Gross engineering costs relate to forward model program development, advanced engineering activities and services. Net engineering costs were $62 million and $52 million for the three months ended June 30, 2026 and 2025, respectively. The increase is primarily due to recent engineering services acquisitions and timing of project spend, partially offset by lower personnel costs.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses were $46 million and $48 million, during the three months ended June 30, 2026 and 2025, respectively. The decrease in expenses during the second quarter is primarily related to lower bad debt expense.
Restructuring, net
During the three months ended June 30, 2026, the Company recorded a release of $1 million of net restructuring expense primarily due to a change in estimate of the Q1 2026 programs. During the three months ended June 30, 2025, the Company recorded an expense of $1 million of net restructuring expense. These expenses are primarily related to employee severance. The second quarter release reflects an updated assessment of restructuring actions and related costs based on initiatives identified during the quarter.
Interest, Net
Interest, net for the three months ended June 30, 2026 increased by $1 million when compared to the same period in 2025. The increase in interest, net is due to lower interest expense related to the debt amendment executed in April 2026.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net income of non-consolidated affiliates was income of $2 million during the three months ended June 30, 2026 and 2025.
Other Income (Expense), Net
Other income, net was a loss of $2 million and a gain of $1 million for the three months ended June 30, 2026 and 2025, respectively. During the three months ended June 30, 2026, the loss was primarily due to acquisition and debt amendment costs, partially offset by pension financing benefits.
During the three months ended June 30, 2025, the gain consisted primarily of net pension financing benefits, partially offset by acquisition costs.
Income Taxes
The Company's provision for income taxes was $26 million for the three months ended June 30, 2026, compared with $22 million for the same period in 2025. The increase was primarily attributable to net discrete tax expense of $5 million recognized during the second quarter of 2026, consisting principally of a $4 million charge related to the resolution of a tax audit in Tunisia and a $3 million charge associated with the settlement of a bilateral advance pricing arrangement between the United States and India, partially offset by a $2 million tax benefit related to additional research and development credits recognized in Portugal. These items were partially offset by lower pretax income during the current year period.
The effective tax rate for the three months ended June 30, 2026 was 34%, compared with 23% for the three months ended June 30, 2025. The increase in the effective tax rate was primarily due to the net discrete tax expense recognized during the quarter and a less favorable geographic mix of earnings in the current year period. In addition, the effective tax rate was adversely
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affected by withholding taxes incurred on certain intercompany transactions and foreign earnings expected to be repatriated, which represented a larger component of tax expense in the current year period.
Adjusted EBITDA1
The Company defines Adjusted EBITDA1 as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring and impairment expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.
Adjusted EBITDA1 is 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 EBITDA1 may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA1 is not a recognized term under U.S. generally accepted accounting principles ("GAAP") and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA1 has 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 EBITDA1 as 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 EBITDA1 to measure compliance with certain covenants.
The reconciliation of net income (loss) attributable to Visteon to Adjusted EBITDA1 for the three months ended June 30, 2026 and 2025, is as follows:
Three Months Ended June 30,
(In millions) 2026 2025 Change
Net income (loss) attributable to Visteon Corporation2 $ 49 $ 71 $ (22)
Depreciation and amortization 29 27 2
Non-cash, stock-based compensation expense 12 12 —
Provision for (benefit from) income taxes2 26 22 4
Restructuring, net (1) 1 (2)
Interest (income) expense, net (3) (2) (1)
Net income (loss) attributable to non-controlling interests 1 4 (3)
Equity in net (income) loss of non-consolidated affiliates (2) (2) —
Other 5 1 4
Adjusted EBITDA1 $ 116 $ 134 $ (18)
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed above.
2 Amounts 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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
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Adjusted EBITDA1 was $116 million for the three months ended June 30, 2026 representing a decrease of $18 million compared with the same period of 2025. Lower volumes decreased Adjusted EBITDA1 by $4 million. Foreign currency decreased Adjusted EBITDA1 by $8 million, primarily attributable to the Mexican peso, Japanese yen, and Indian rupee, partially offset by the Brazilian real. Net engineering costs, excluding currency, decreased Adjusted EBITDA1 by $12 million. Customer pricing decreased Adjusted EBITDA by $1 million as a result of annual price reductions and customer recoveries. Cost performance and commercial discipline increased Adjusted EBITDA1 by $7 million.
Results of Operations - Three Months Ended June 30, 2025 and 2024
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 the Annual Report on Form 10-K for the year ended December 31, 2025, as filed on February 19, 2026, with the SEC. 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 three months ended June 30, 2025 and 2024 were as follows.
Three Months Ended June 30,
(In millions) 2025 2024 Change
Net sales $ 969 $ 1,014 $ (45)
Cost of sales (828) (867) 39
Gross margin 141 147 (6)
Selling, general and administrative expenses (48) (49) 1
Restructuring, net (1) (1) —
Interest income, net 2 — 2
Equity in net income (loss) of non-consolidated affiliates 2 — 2
Other income (expense), net 1 3 (2)
Provision for income taxes2 (22) (13) (9)
Net income (loss)2 75 87 (12)
Less: Net (income) loss attributable to non-controlling interests (4) (4) —
Net income (loss) attributable to Visteon Corporation2 $ 71 $ 83 $ (12)
Adjusted EBITDA1 $ 134 $ 136 $ (2)
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed above.
2 Amounts 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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
The Company's provision for income taxes of $22 million for the three months ended June 30, 2025 represents an increase of $9 million compared with $13 million in the same period of 2024. The increase in tax expense reflects a higher forecasted effective tax rate, primarily driven by shifts in the geographic mix of earnings, jurisdictional tax rate differences, and increased withholdings taxes due primarily to unfavorable exchange movements.
The reconciliation of net income (loss) attributable to Visteon to Adjusted EBITDA1 for the three months ended June 30, 2025 and 2024, is as follows:
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Three Months Ended June 30,
(In millions) 2025 2024 Change
Net income (loss) attributable to Visteon Corporation2 $ 71 $ 83 $ (12)
Depreciation and amortization 27 24 3
Non-cash, stock-based compensation expense 12 11 1
Provision for income taxes2 22 13 9
Restructuring, net 1 1 —
Interest, net (2) — (2)
Net income attributable to non-controlling interests 4 4 —
Equity in net (income) loss of non-consolidated affiliates (2) — (2)
Other 1 — 1
Adjusted EBITDA1 $ 134 $ 136 $ (2)
1Adjusted EBITDA is a Non-GAAP financial measure, as defined above.
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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Results of Operations - Six Months Ended June 30, 2026 and 2025
The Company's consolidated results of operations for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30,
(In millions) 2026 2025 Change
Net sales $ 1,914 $ 1,903 $ 11
Cost of sales (1,683) (1,624) (59)
Gross margin 231 279 (48)
Selling, general and administrative expenses (100) (95) (5)
Restructuring, net (17) (1) (16)
Interest income, net 5 3 2
Equity in net income (loss) of non-consolidated affiliates 4 4 —
Other income (expense), net 2 2 —
Provision for income taxes2 (42) (48) 6
Net income (loss)2 83 144 (61)
Less: Net (income) loss attributable to non-controlling interests (3) (6) 3
Net income (loss) attributable to Visteon Corporation2 $ 80 $ 138 $ (58)
Adjusted EBITDA1 $ 220 $ 263 $ (43)
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed below.
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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
Net Sales, Cost of Sales and Gross Margin
(In millions) Net Sales Cost of Sales Gross Margin
Six months ended June 30, 2025 1,903 $ (1,624) $ 279
Volume, mix, and net new business (40) 29 (11)
Currency 28 (39) (11)
Customer pricing (6) — (6)
Engineering costs, net * — (14) (14)
Cost performance, design changes and other 29 (35) (6)
Six months ended June 30, 2026 1,914 (1,683) $ 231
*Excludes the impact of currency.
Net sales for the six months ended June 30, 2026 totaled $1,914, representing an increase of $11 million compared with the same period of 2025. Volumes and net new business decreased net sales by $40 million. Customer pricing decreased net sales by $6 million as a result of annual price reductions, partially offset by higher customer recoveries. Favorable currency increased net sales by $28 million, primarily attributable to the euro and Brazilian real, partially offset by the Indian rupee. Other cost performance, design changes and other increased net sales by $29 million primarily due to one-time items and sales from the recently acquired engineering services companies and other commercial items.
Cost of sales increased by $59 million for the six months ended June 30, 2026 compared with the same period in 2025. Volume, mix and net new business decreased cost of sales by $29 million. Net engineering costs, excluding currency, increased cost of sales by $14 million. Foreign currency increased cost of sales by $39 million, primarily attributable to the euro, Chinese renminbi, and Brazilian real. Cost performance, design changes and other increased cost of sales by $35 million primarily due to higher semiconductor and warranty costs, partially offset by ongoing cost discipline.
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A summary of net engineering costs is shown below:
Six Months Ended June 30,
(In millions) 2026 2025
Gross engineering costs $ (191) $ (168)
Engineering recoveries 72 64
Engineering costs, net $ (119) $ (104)
Gross engineering costs relate to forward model program development, advanced engineering activities and services. Net engineering costs were $119 million and $104 million for the six months ended June 30, 2026 and 2025, respectively. The increase is primarily due to recent engineering services acquisitions and timing of project spend, partially offset by higher recoveries.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses were $100 million and $95 million, during the six months ended June 30, 2026 and 2025, respectively. The year-over-year increase was primarily driven by unfavorable foreign currency impacts.
Restructuring, net
During the six months ended June 30, 2026 and 2025, the Company recorded $17 million and $1 million of net restructuring expense, respectively, primarily related to employee severance. The increase is primarily related to a restructuring program approved during the first quarter of 2026.
Interest, Net
Interest income, net for the six months ended June 30, 2026 increased by $2 million when compared to the same period in 2025. The increase in interest, net is due to lower interest expense related to the debt amendment executed in April 2026.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net income of non-consolidated affiliates was income of $4 million during the six months ended June 30, 2026 and 2025.
Other Income (Expense), Net
Other income, net was $2 million for the six months ended June 30, 2026 and 2025. Other income, net for the six months ended June 30, 2026 consisted primarily of net pension financing benefits, partially offset by acquisition costs and debt amendment fees. Other income, net for the six months ended June 30, 2025 consisted primarily of net pension financing benefits, partially offset by acquisition costs.
Income Taxes
The Company's provision for income taxes was $42 million for the six months ended June 30, 2026, compared with $48 million for the same period in 2025. The decrease was primarily driven by lower pretax income and a favorable discrete tax benefit of $2 million related to additional research and development credits recognized in Portugal. These favorable items were partially offset by discrete tax expense of $7 million, consisting primarily of a $4 million expense related to the resolution of a tax audit in Tunisia and a $3 million expense associated with the settlement of a bilateral advance pricing arrangement between the United States and India.
The effective tax rate for the six months ended June 30, 2026 was 34%, compared with 25% for the six months ended June 30, 2025. The increase in the effective tax rate was primarily due to the discrete tax items described above and a less favorable geographic mix of earnings in the current year period. The effective tax rate also continued to be impacted by withholding taxes on certain intercompany transactions and foreign earnings expected to be repatriated, which represented a larger component of tax expense in the current year period.
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Adjusted EBITDA1
The Company defines Adjusted EBITDA1 as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring and impairment expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.
Adjusted EBITDA1 is 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 EBITDA1 may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA1 is not a recognized term under U.S. generally accepted accounting principles ("GAAP") and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA1 has 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 EBITDA1 as 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 EBITDA1 to measure compliance with certain covenants.
The reconciliation of net income (loss) attributable to Visteon to Adjusted EBITDA1 for the six months ended June 30, 2026 and 2025, is as follows:
Six Months Ended June 30,
(In millions) 2026 2025 Change
Net income (loss) attributable to Visteon Corporation2 $ 80 $ 138 $ (58)
Depreciation and amortization 58 52 6
Non-cash, stock-based compensation expense 24 23 1
Provision for (benefit from) income taxes2 42 48 (6)
Restructuring, net 17 1 16
Interest (income) expense, net (5) (3) (2)
Net income (loss) attributable to non-controlling interests 3 6 (3)
Equity in net (income) loss of non-consolidated affiliates (4) (4) —
Other 5 2 3
Adjusted EBITDA1 $ 220 $ 263 $ (43)
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed above.
2 Amounts 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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
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Adjusted EBITDA1 was $220 million for the six months ended June 30, 2026 representing a decrease of $43 million compared with the same period of 2025. Lower volumes decreased Adjusted EBITDA1 by $11 million. Customer pricing decreased Adjusted EBITDA1 by $6 million as a result of annual price reductions, partially offset by customer recoveries. Foreign currency decreased Adjusted EBITDA1 by $14 million, primarily attributable to the Indian rupee, Japanese yen, and Mexican peso, partially offset by the Brazilian real. Net engineering costs, excluding currency, decreased Adjusted EBITDA1 by $14 million. Cost performance, commercial discipline as well as the impact of one-time items, partially offset by higher semiconductor cost, increased Adjusted EBITDA1 by $2 million.
Results of Operations - Six Months Ended June 30, 2025 and 2024
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 the Annual Report on Form 10-K for the year ended December 31, 2025, as filed on February 19, 2026, with the SEC. 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 six months ended June 30, 2025 and 2024 were as follows.
Six Months Ended June 30,
(In millions) 2025 2024 Change
Net sales $ 1,903 $ 1,947 $ (44)
Cost of sales (1,624) (1,681) 57
Gross margin 279 266 13
Selling, general and administrative expenses (95) (101) 6
Restructuring, net (1) (3) 2
Interest income, net 3 — 3
Equity in net income (loss) of non-consolidated affiliates 4 (4) 8
Other income (expense), net 2 5 (3)
Provision for income taxes2 (48) (26) (22)
Net income (loss)2 144 137 7
Less: Net (income) loss attributable to non-controlling interests (6) (6) —
Net income (loss) attributable to Visteon Corporation2 $ 138 $ 131 $ 7
Adjusted EBITDA1 $ 263 $ 238 $ 25
1 Adjusted EBITDA is a Non-GAAP financial measure, as further discussed above.
2 Amounts 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.” of the Annual Report on Form 10-K for the year ended December 31, 2025.
The Company's provision for income taxes of $48 million for the six months ended June 30, 2025 represents an increase of $22 million compared with $26 million in the same period of 2024. The increase in tax expense is primarily attributable to higher pretax income, as well as changes in the geographic mix of earnings and differing tax rates between jurisdictions. Additionally, the increase reflects higher withholding taxes, largely attributable to unfavorable foreign exchange movements.
The reconciliation of net income (loss) attributable to Visteon to Adjusted EBITDA1 for the six months ended June 30, 2025 and 2024, is as follows:
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Six Months Ended June, 30
(In millions) 2025 2024 Change
Net income (loss) attributable to Visteon Corporation2 $ 138 $ 131 $ 7
Depreciation and amortization 52 46 6
Non-cash, stock-based compensation expense 23 21 2
Provision for income taxes2 48 26 22
Restructuring, net 1 3 (2)
Interest, net (3) — (3)
Net income attributable to non-controlling interests 6 6 —
Equity in net (income) loss of non-consolidated affiliates (4) 4 (8)
Other 2 1 1
Adjusted EBITDA1 $ 263 $ 238 $ 25
1Adjusted EBITDA is a Non-GAAP financial measure, as defined above.
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.”
Liquidity
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 United States. 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 June 30, 2026, the Company’s corporate credit ratings were BB+ by Standard & Poor’s and Ba1 by Moody's. See Note 9, "Debt" 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. Affiliate working capital lines, which may be utilized by the Company's local subsidiaries and consolidated joint ventures, had availability of $189 million and the Company had $400 million of available credit under the revolving credit facility, as of June 30, 2026.
Cash Balances
As of June 30, 2026, the Company had total cash and cash equivalents of $650 million, including $2 million of restricted cash and $94 million of cash attributable to the Company's joint venture partners should the Company elect to issue cash dividends.
Cash balances totaling $532 million were located in jurisdictions outside of the United States, of which approximately $210 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 the three and six months ended June 30, 2026, the Company paid $10 million and $20 million, respectively, in quarterly cash dividends.
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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. During the three and six months ended June 30, 2026, the Company purchased a total of $6 million and $36 million, respectively, under this program.
On June 25, 2026, the Company's board of directors authorized an additional share repurchase program of $800 million of common stock through December 31, 2029. No shares were repurchased under this program during the quarter ended June 30, 2026.
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 six months ended June 30, 2026, cash contributions to the Company's defined benefit plans were less than $1 million related to its US plan and $3 million related to its non-U.S. plans. The Company estimates that total cash contributions related to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2026 will be less than $1 million and $3 million, respectively.
During the six months ended June 30, 2026, the Company paid $15 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is included in Note 4, "Restructuring." The Company estimates that total cash restructuring payments through 2026 will approximate $20 million.
The Company has committed to make a $20 million investment in multiple entities principally focused on the automotive sector pursuant to limited partnership agreements. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount. As of June 30, 2026, the Company has contributed a total of approximately $15 million toward the aggregate investment commitments. These limited partnerships are classified as equity method investments.
The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of June 30, 2026, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $9 million. The Company signed a bilateral Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service and the India Tax Authority (“ITA”) that resulted in a cash settlement paid to the ITA of $15 million (including interest) in the second quarter.
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Cash Flows
Operating Activities
Cash provided by operating activities decreased to $43 million for the six months ended June 30, 2026, from $165 million in the prior‑year period. The decrease was primarily attributable to lower net income and higher net working capital outflows of $76 million driven by higher accounts receivable and inventory, partially offset by increased accounts payable.
Investing Activities
Net cash used by investing activities during the six months ended June 30, 2026 totaled $93 million, representing $22 million of decreased usage as compared to the same period in 2025. The decrease primarily reflects the smaller size of the acquisition completed in 2026 relative to the prior-year acquisition.
Financing Activities
Cash used by financing activities during the six months ended June 30, 2026 was $77 million, representing a $39 million increase as compared to the same period in 2025. This increase is primarily attributable to a cash dividend paid to shareholders of $20 million and higher share repurchases as compared to 2025 of $29 million.
Debt and Capital Structure
See Note 9, “Debt” to the condensed consolidated financial statements included in Item 1.
Significant Accounting Policies and Critical Accounting Estimates
See Note 1, “Summary of Significant Accounting Policies” to the accompanying condensed consolidated financial statements in Item 1.
Fair Value Measurements
See Note 14, “Fair Value Measurements and Financial Instruments” to the condensed consolidated financial statements included in Item 1.
Recent Accounting Pronouncements
See Note 1, “Summary of Significant Accounting Policies” to the accompanying condensed consolidated financial statements in Item 1.
Forward-Looking Statements
Certain statements contained or incorporated in this Quarterly Report on Form 10-Q 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. 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 report. 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.
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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 international trade policies and any response to such actions by foreign countries.
•Significant and prolonged shortages of, or unrecoverable price increases in, critical components, including but not limited to semiconductors such as DRAM, particularly where such components are sourced from sole or primary suppliers.
•Failure of the Company’s joint venture partners to comply with contractual obligations or to exert undue influence in China.
•Significant changes in the competitive environment in the major markets where Visteon procures materials, components, or supplies or where its products are manufactured, distributed, or sold.
•Visteon’s ability to satisfy its future capital and liquidity requirements; Visteon’s ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to Visteon; Visteon’s ability to comply with covenants applicable to it; and the continuation of acceptable customer and supplier payment terms.
•Visteon's ability to avoid or continue to operate during a strike, or partial work stoppage or slow down at any of Visteon's principal customers
•Visteon’s ability to access funds generated by its foreign subsidiaries and joint ventures on a timely and cost-effective basis.
•Changes in the operations (including products, product planning, and part sourcing), financial condition, results of operations, or market share of Visteon’s customers.
•Changes in vehicle production volume of Visteon’s customers in the markets where it operates.
•Increases in commodity costs and the Company's ability to offset or recover these costs or disruptions in the supply of commodities, including resins, copper, fuel, and natural gas.
•Visteon’s ability to generate cost savings to offset or exceed agreed-upon price reductions or price reductions to win additional business and, in general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs and capital investments.
•Visteon’s ability to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements.
•Restrictions in labor contracts with unions that restrict Visteon’s ability to close plants, divest unprofitable, noncompetitive businesses, change local work rules and practices at a number of facilities, and implement cost-saving measures.
•The costs and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential asset impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities.
•Legal and administrative proceedings, investigations, and claims, including shareholder class actions, inquiries by regulatory agencies, product liability, warranty, employee-related, environmental and safety claims, and any recalls of products manufactured or sold by Visteon.
•Changes in economic conditions, currency exchange rates, interest rates, changes in foreign laws, regulations or trade policies, or political stability in foreign countries where Visteon procures materials, components, or supplies or where its products are manufactured, distributed, or sold.
•Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages, or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components, or supplies to manufacture its products or where its products are manufactured, distributed, or sold.
•Visteon’s ability to satisfy its pension and other postretirement employee benefit obligations, and to retire outstanding debt and satisfy other contractual commitments, all at the levels and times planned by management.
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•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 supplier's products or assets.
•Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system, changes in fuel prices, and disruptions of supply.
•The cyclical and seasonal nature of the automotive industry.
•Visteon’s ability to comply with environmental, safety, and other regulations applicable to it and any increase in the requirements, responsibilities, and associated expenses and expenditures of these regulations.
•Disruptions in information technology systems including, but not limited to, system failure, cyber-attack, malicious computer software (malware including ransomware), unauthorized physical or electronic access, or other natural or man-made incidents or disasters.
•Visteon’s ability to protect its intellectual property rights and to respond to changes in technology and technological risks and to claims by others that Visteon infringes their intellectual property rights.
•Visteon’s ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting.
•Other factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.
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