visteon 1q 2004 form 10-q a

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A(Amendment No. 1)

(Mark One)

≤ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004, or

n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission Ñle number 1-15827

VISTEON CORPORATION(Exact name of Registrant as speciÑed in its charter)

Delaware 38-3519512(State of incorporation) (I.R.S. employer

IdentiÑcation number)

One Village Center Drive, Van Buren Township, Michigan 48111(Address of principal executive oÇces) (Zip code)

Registrant's telephone number, including area code: (800)-VISTEON

Indicate by check mark whether the Registrant: (1) has Ñled all reports required to be Ñledby Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the Registrant was required to Ñle such reports), and (2) hasbeen subject to such Ñling requirements for the past 90 days.

Yes „ No

Indicate by check mark whether the Registrant is an accelerated Ñler (as deÑned inExchange Act Rule 12b-2).

Yes „ No

As of March 1, 2005, the Registrant had outstanding 128,678,345 shares of common stock,par value $1.00 per share.

Exhibit index located on page number 40.

VISTEON CORPORATION AND SUBSIDIARIES

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A(""Form 10-Q/A'') to our Quarterly Report onForm 10-Q for the quarterly period ended March 31, 2004, initially Ñled with the Securities andExchange Commission (the ""SEC'') on May 3, 2004 (the ""Original Filing''), is being Ñledto reÖect restatements of our consolidated balance sheets at March 31, 2004 andDecember 31, 2003; and our consolidated statement of operations for each of the periodsended March 31, 2004 and March 31, 2003, and the notes related thereto. The restatementsprimarily pertain to the following matters identiÑed during the course of preparing Visteon's 2004Ñnancial statements:

‚ EÅective in January 2002, and again in January 2004, Visteon amended its retiree healthcare beneÑts plans for certain of its U.S. employees. These amendments changed theeligibility requirements for participants in the plans, and, as a result, Visteon changed theexpense attribution periods. We have determined that these changes in eligibilityrequirements were not properly communicated to aÅected employees, and, therefore, therevision to the expense attribution periods, which resulted in expense reductions,should not have been made. The impact of the correction of these errors decreased netincome by approximately $5 million ($0.04 per share) and increased net loss byapproximately $4 million ($0.03 per share) for the quarters ended March 31, 2004 andMarch 31, 2003, respectively.

‚ Visteon is making corrections for certain tooling costs originally recorded as receivables.Costs incurred for Visteon-owned tooling used in production have been adjusted to reÖectsuch costs as long-term assets and to provide related amortization expense. Non-reimbursable costs incurred to develop customer-owned tooling have been expensed inthe periods such costs were incurred. There was no impact of the correction of theseerrors on net income for the quarters ended March 31, 2004 and March 31, 2003.

‚ Visteon is making corrections for certain volume related rebates, received from numerouscapital equipment suppliers for purchases, which were originally recognized as a reductionto expense. Costs incurred for capital equipment have been adjusted to reÖect suchdiscounts as a reduction to long-term assets and to adjust related depreciation andamortization expense. The impact of the correction of these errors increased net loss byapproximately $2 million ($0.01 per share) for the quarter ended March 31, 2004.

‚ During the review of our annual United Kingdom pension valuations, we identiÑedunrecorded pension expenses incurred as a result of special termination beneÑts providedunder Visteon's European Plan for Growth program. The impact of the correction of theseerrors decreased net income by approximately $3 million ($0.02 per share) for the quarterended March 31, 2004.

‚ Visteon also identiÑed unrecorded postretirement health care expenses at one of Visteon'sforeign locations. There was no impact of the correction of these errors on net income forthe quarters ended March 31, 2004 and March 31, 2003.

1

‚ Visteon is correcting the amount and timing of the recognition of certain tax adjustmentsmade during the periods. As Visteon expects to repatriate earnings of foreign subsidiaries,adjustments were made to provide for the tax eÅects of foreign currency movementsagainst the U.S. dollar. These adjustments also impacted the timing of the recognition ofdeferred tax asset valuation allowances in the fourth quarter of 2003 and the third quarterof 2004. Further, Visteon recognized an additional valuation allowance for certain deferredtax assets that had previously been misclassiÑed and not considered in Visteon's 2003deferred tax assessment. There was no impact of the correction of these errors on netincome for the quarters ended March 31, 2004 and March 31, 2003.

For a more detailed description of these restatements, see Note 2, ""Restatement of FinancialStatements'' to the accompanying consolidated Ñnancial statements contained in thisForm 10-Q/A. The decision to restate Visteon's consolidated Ñnancial statements was previouslyannounced in a press release that was Ñled with the SEC as part of a Current Report onForm 8-K of Visteon dated January 31, 2005.

Although this Form 10-Q/A sets forth the Original Filing in its entirety, this Form 10-Q/A onlyamends and restates Items 1, 2 and 4 of Part I, Item 6 of Part II and Exhibit 12.1 of Item 6 ofPart II of the Original Filing, in each case, solely as a result of, and to reÖect, the restatement,and no other information in the Original Filing is amended hereby. The foregoing items have notbeen updated to reÖect other events occurring after the Original Filing or to modify or updatethose disclosures aÅected by subsequent events. In addition, pursuant to the rules of the SEC,Item 6 of Part II of the Original Filing has been amended to contain the consent of ourindependent registered public accounting Ñrm and currently-dated certiÑcations from our ChiefExecutive OÇcer and Chief Financial OÇcer, as required by Sections 302 and 906 of theSarbanes-Oxley Act of 2002. The consent of the independent registered public accounting Ñrmand the certiÑcations of our Chief Executive OÇcer and Chief Financial OÇcer are attached tothis Form 10-Q/A as Exhibits 15.1, 31.1, 31.2, 32.1 and 32.2, respectively.

Except for the foregoing amended information, this Form 10-Q/A continues to describeconditions as of the date of the Original Filing, and we have not updated the disclosurescontained herein to reÖect events that occurred at a later date. Other events occurring after theÑling of the Original Filing or other disclosures necessary to reÖect subsequent events have beenor will be addressed in either our amended Quarterly Reports on Form 10-Q/A for the quarterlyperiods ended June 30, 2004 and/or September 30, 2004, which are being Ñled concurrently withthe Ñling of this Form 10-Q/A, or by our Annual Report on Form 10-K for the year endedDecember 31, 2004, when Ñled, or other reports Ñled with the SEC subsequent to the date of thisÑling.

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONSOLIDATED STATEMENT OF INCOMEFor the Periods Ended March 31, 2004 and 2003

(in millions, except per share amounts)

First Quarter

2004 2003

(Restated) (Restated)(unaudited)

SalesFord and aÇliates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,637 $3,721Other customers ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,335 983

Total salesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,972 4,704Costs and expenses (Notes 3 and 5)

Costs of sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,656 4,481Selling, administrative and other expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 265 244

Total costs and expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,921 4,725Operating income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 51 (21)Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 4Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23 23

Net interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (19) (19)Equity in net income of aÇliated companies (Note 3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11 15

Income (loss) before income taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43 (25)Provision (beneÑt) for income taxes (Note 3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 (14)

Income (loss) before minority interestsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29 (11)Minority interests in net income of subsidiaries ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 8

Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $ (19)

Earnings (loss) per share (Note 9)BasicÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.16 $(0.15)Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.16 (0.15)

Cash dividends per share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.06 $ 0.06

The accompanying notes are part of the Ñnancial statements.

3


CONSOLIDATED BALANCE SHEET(in millions)

March 31, December 31,2004 2003


AssetsCash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,187 $ 953Marketable securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 3

Total cash and marketable securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,188 956Accounts receivable Ì Ford and aÇliates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,476 1,175Accounts receivable Ì other customers (Note 7) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,184 1,185

Total receivables, net (Note 3)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,660 2,360Inventories (Note 12) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 828 761Deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 163 163Prepaid expenses and other current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 186 143

Total current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,025 4,383Equity in net assets of aÇliated companiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 225 215Net property ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,379 5,365Deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 716 700Other assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 277 270

Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $11,622 $10,933

Liabilities and Stockholders' EquityTrade payables ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 2,457 $ 2,270Accrued liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,003 930Income taxes payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39 31Debt payable within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 276 351

Total current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,775 3,582Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,945 1,467Postretirement beneÑts other than pensionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 581 515Postretirement beneÑts payable to FordÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,079 2,090Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,491 1,508

Total liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,871 9,162

Stockholders' equityCapital stock

Preferred Stock, par value $1.00, 50 million shares authorized,none outstanding ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì

Common Stock, par value $1.00, 500 million shares authorized,131 million shares issued, 129 million and 131 million sharesoutstanding, respectivelyÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 131 131

Capital in excess of par value of stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,297 3,288Accumulated other comprehensive (loss) (Note 13) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (80) (54)Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (34) (19)Accumulated deÑcit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,563) (1,575)

Total stockholders' equityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,751 1,771

Total liabilities and stockholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $11,622 $10,933


4


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFor the Periods Ended March 31, 2004 and 2003

(in millions)

First Quarter

2004 2003


Cash and cash equivalents at January 1 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 953 $1,204Cash Öows provided by (used in) operating activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 103 (135)Cash Öows from investing activities

Capital expendituresÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (196) (181)Purchases of securities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (48)Sales and maturities of securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 70Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 6

Net cash used in investing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (193) (153)Cash Öows from Ñnancing activities

Commercial paper repayments, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (54) (17)Other short-term debt, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (19) ÌProceeds from issuance of other debt, net of issuance costs ÏÏÏÏÏÏÏÏÏÏ 474 36Principal payments on other debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (12) (27)Purchase of treasury stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (11) (5)Cash dividends ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8) (8)Other, including book overdraftsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (42) (1)

Net cash provided by (used in) Ñnancing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 328 (22)EÅect of exchange rate changes on cash ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) 2

Net increase (decrease) in cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 234 (308)

Cash and cash equivalents at March 31ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,187 $ 896


5


NOTES TO FINANCIAL STATEMENTS(unaudited)

NOTE 1. Financial Statements

The Ñnancial data presented herein are unaudited, but in the opinion of management reÖectthose adjustments, including normal recurring adjustments, necessary for a fair statement of suchinformation. Results for interim periods should not be considered indicative of results for a fullyear. Reference should be made to the consolidated Ñnancial statements and accompanyingnotes included in the company's Annual Report on Form 10-K for the Ñscal year endedDecember 31, 2003, as Ñled with the Securities and Exchange Commission on February 13, 2004and as amended on March 16, 2005.

Visteon Corporation (""Visteon'') is a leading, global supplier of automotive systems,modules and components. Visteon sells products primarily to global vehicle manufacturers, andalso sells to the worldwide aftermarket for replacement and vehicle appearance enhancementparts. Visteon became an independent company when Ford Motor Company (""Ford'')established Visteon as a wholly-owned subsidiary in January 2000 and subsequently transferredto Visteon the assets and liabilities comprising Ford's automotive components and systemsbusiness. Ford completed its spin-oÅ of Visteon on June 28, 2000 (the ""spin-oÅ''). Prior toincorporation, Visteon operated as Ford's automotive components and systems business.

6


NOTES TO FINANCIAL STATEMENTS Ì (Continued)(unaudited)

NOTE 2. Restatement of Financial Statements

Visteon has restated its previously issued consolidated Ñnancial statements for 2001 through2003 and for the Ñrst three months of 2004, primarily for accounting corrections related topostretirement health care and pension costs, tooling costs, capital equipment costs, inventorycosting and income taxes.

The following table summarizes the impact of these adjustments to Visteon's previouslyreported net income (loss). These adjustments impacted previously reported costs of sales,selling, administrative and other expenses and income tax expense on the consolidatedstatement of income.

First Quarter

2004 2003

(in millions)

Net income (loss), as originally reportedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 30 $(15)Accounting corrections for postretirement health care costs and pension costs

(pre-tax)(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (11) (6)Accounting corrections for capital equipment costs (pre-tax)(2) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2) ÌTax impact of above(3)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 2

Net income (loss), as restated ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $(19)

(1) Ì EÅective in January 2002, Visteon amended its retiree health care beneÑts plan for certainof its U.S. employees. EÅective in January 2004, a Visteon wholly owned subsidiary amended itsretiree health care beneÑts plan for its U.S. employees. These amendments changed the eligibilityrequirements for participants in the plans. As a result of these amendments, Visteon changed theexpense attribution periods, which eliminated cost accruals for younger employees and increasedaccrual rates for older participating employees. Prior to these amendments, Visteon accrued forthe cost of the beneÑt from a participating employee's date of hire, regardless of age. Visteondetermined that these beneÑt changes were not properly communicated to eÅected employeespursuant to the requirements of Statement of Financial Accounting Standards No. 106 and thatsuch expense reductions should not have been recorded. Further, analysis of the annual UnitedKingdom pension valuation identiÑed pension expenses related to special termination beneÑtsprovided under Visteon's European Plan for Growth which were not fully recognized in the periodin which those beneÑts were accepted by employees ($3 million in the Ñrst quarter of 2004). Theimpact of the correction of these errors decreased net income by approximately $8 million($0.06 per share) and increased net loss by approximately $4 million ($0.03 per share), for theÑrst quarter ended March 31, 2004 and March 31, 2003, respectively.

(2) Ì Represents an adjustment for volume related rebates, received from numerous capitalequipment suppliers for purchases, which were originally recognized as a reduction to expense.Costs incurred for capital equipment have been adjusted to reÖect such discounts as a reductionto long-term assets and to adjust related depreciation and amortization expense. The impact ofthe correction of these errors decreased net income approximately $2 million ($0.01 per share)for the Ñrst quarter ended March 31, 2004.

(3) Ì Represents the deferred tax beneÑt of the pre-tax expense adjustments.

7



NOTE 2. Restatement of Financial Statements Ì (Continued)

The following is a summary of the impact of the restatement on the previously issuedconsolidated statement of income, consolidated balance sheets and condensed consolidatedstatement of cash Öows included in this Ñling.

CONSOLIDATED STATEMENT OF INCOME

First Quarter

2004 2003

As AsOriginally As Originally AsReported Restated Reported Restated

(in millions)

Sales

Ford and aÇliates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,637 $3,637 $3,721 $3,721

Other customers ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,335 1,335 983 983

Total salesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,972 4,972 4,704 4,704

Costs and expenses

Costs of sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,645 4,656 4,477 4,481

Selling, administrative and other expenses ÏÏ 263 265 242 244

Total costs and expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,908 4,921 4,719 4,725

Operating income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 64 51 (15) (21)

Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 4 4 4

Interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 23 23 23 23

Net interest expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (19) (19) (19) (19)

Equity in net income of aÇliated companies ÏÏÏ 11 11 15 15

Income (loss) before income taxes andminority interests ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 56 43 (19) (25)

Provision (beneÑt) for income taxesÏÏÏÏÏÏÏÏÏÏ 17 14 (12) (14)

Income (loss) before minority interests ÏÏÏÏÏÏ 39 29 (7) (11)

Minority interest in net income of subsidiaries ÏÏ 9 9 8 8

Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 30 $ 20 $ (15) $ (19)

Income (loss) per share

BasicÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.24 $ 0.16 $(0.12) $(0.15)

Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.23 0.16 (0.12) (0.15)

8




CONSOLIDATED BALANCE SHEET

March 31, 2004 December 31, 2003


(in millions)

AssetsCash and cash equivalentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,187 $ 1,187 $ 953 $ 953Marketable securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 1 3 3

Total cash and marketable securities ÏÏÏÏÏÏ 1,188 1,188 956 956Accounts receivable Ì Ford and aÇliates ÏÏÏÏ 1,499 1,476 1,198 1,175Accounts receivable Ì other customersÏÏÏÏÏÏ 1,163 1,184 1,164 1,185

Total receivables ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,662 2,660 2,362 2,360Inventories ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 828 828 761 761Deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 163 163 163 163Prepaid expenses and other current assets ÏÏ 211 186 168 143

Total current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,052 5,025 4,410 4,383Equity in net assets of aÇliated companiesÏÏÏ 225 225 215 215Net property ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,386 5,379 5,369 5,365Deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 713 716 700 700Other assetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 277 277 270 270

Total AssetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $11,653 $11,622 $10,964 $10,933

Liabilities and Stockholders' EquityTrade payables ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 2,457 $ 2,457 $ 2,270 $ 2,270Accrued liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 994 1,003 924 930Income taxes payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 39 27 31Debt payable within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 276 276 351 351

Total current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,762 3,775 3,572 3,582Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,945 1,945 1,467 1,467Postretirement beneÑts other than pensionsÏÏ 527 581 469 515Postretirement beneÑts payable to FordÏÏÏÏÏÏ 2,079 2,079 2,090 2,090Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,491 1,491 1,508 1,508

Total liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,804 9,871 9,106 9,162Stockholders' equityCapital stockÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 131 131 131 131Capital in excess of par value of stockÏÏÏÏÏÏÏ 3,297 3,297 3,288 3,288Accumulated other comprehensive (loss)ÏÏÏÏ (46) (80) (21) (54)Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (34) (34) (19) (19)Accumulated deÑcit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,499) (1,563) (1,521) (1,575)

Total stockholders' equityÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,849 1,751 1,858 1,771

Total liabilities and stockholders' equity ÏÏ $11,653 $11,622 $10,964 $10,933

In addition, certain amounts in Notes 3, 4, 5, 6, 9, 13, and 14 have been restated to reÖectthe restatement adjustments described above.

9




CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

First Quarter

2004 2003


(in millions)

Cash and cash equivalents at January 1 ÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 953 $ 953 $1,204 $1,204

Cash Öows provided by (used in) operating activities ÏÏ 105 103 (135) (135)

Cash Öows used in investing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (195) (193) (153) (153)

Cash Öows provided by (used in) Ñnancing activities ÏÏ 328 328 (22) (22)

EÅect of exchange rate changes on cash ÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) (4) 2 2

Net increase (decrease) in cash and cashequivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 234 234 (308) (308)

Cash and cash equivalents at December 31 ÏÏÏÏÏÏÏÏÏÏ $1,187 $1,187 $ 896 $ 896

NOTE 3. Selected Costs, Income and Other Information

Depreciation and Amortization

Depreciation and amortization expenses are summarized as follows:First Quarter

2004 2003

(in millions)

Depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $140 $140Amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 26 23

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $166 $163

Investments in AÇliates

The following table presents summarized Ñnancial data for those aÇliates accounted forunder the equity method. The amounts represent 100% of the results of operations of theseaÇliates. Visteon reports its share of their net income in the line ""Equity in net income ofaÇliated companies'' on the Consolidated Statement of Income.

First Quarter

2004 2003

(in millions)

Net sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $334 $291Gross proÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 61 67Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 21 30

10



NOTE 3. Selected Costs, Income and Other Information Ì (Continued)

Purchase and Supply Agreement with Ford

Under the terms of the new purchase and supply agreement entered into with Ford onDecember 19, 2003, Visteon agreed to pay Ford $150 million in lieu of additional productivityprice reductions on components supplied by Visteon in North America during 2003. This paymentwas accrued for in 2003 as a reduction to sales. Visteon paid $50 million in December 2003 and$100 million during the Ñrst quarter of 2004.

Accounts Receivable

The allowance for doubtful accounts was $39 million at March 31, 2004 and $35 million atDecember 31, 2003.

Income Taxes

Visteon's provision (beneÑt) for income taxes, which is computed based upon income(loss) before income taxes excluding equity in net income of aÇliated companies, reÖects aneÅective tax rate of 44% for the Ñrst quarter of 2004, compared with (35%) for the Ñrst quarterof 2003. The change in our eÅective tax rate is due primarily to the need to maintain full valuationallowances against deferred tax assets in certain foreign jurisdictions. We expect our full year2004 eÅective tax rate to be 38%; however, the rate could vary quarter-to-quarter. Further, therate is largely dependent on pre-tax income (loss) by country, and any changes in our forecastor actual results could have a signiÑcant impact on our eÅective tax rate for a given quarter orfor the full year.

11



NOTE 4. Stock-Based Awards

Starting January 1, 2003, Visteon began expensing the fair value of stock-based awardsgranted to employees pursuant to Statement of Financial Accounting Standards No. 123(""SFAS 123''), ""Accounting for Stock-Based Compensation.'' This standard was adopted on aprospective method basis for stock-based awards granted, modiÑed or settled afterDecember 31, 2002. For stock options and restricted stock awards granted prior toJanuary 1, 2003, Visteon measures compensation cost using the intrinsic value method. Ifcompensation cost for all stock-based awards had been determined based on the estimated fairvalue of stock options and the fair value set at the date of grant for restricted stock awards, inaccordance with the provisions of SFAS 123, Visteon's reported net income (loss) and income(loss) per share would have changed to the pro forma amounts indicated below:

First Quarter

2004 2003

(Restated)(in millions, exceptper share amounts)

Net income (loss), as reported ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $ (19)Add: Stock-based employee compensation expense included

in reported net income (loss), net of related tax eÅects ÏÏÏ 2 1Deduct: Total stock-based employee compensation expense

determined under fair value based method for all awards,net of related tax eÅects ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) (3)

Pro forma net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 18 $ (21)

Income (loss) per share:As reported:

Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.16 $(0.15)DilutedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.16 (0.15)

Pro forma:Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.14 $(0.17)DilutedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.14 (0.17)

NOTE 5. Special Charges

First Quarter 2004 Actions

In the Ñrst quarter of 2004, Visteon recorded pre-tax charges of $14 million in costs of sales($10 million after-tax) which includes $9 million for the separation of about 50 hourly employeeslocated at Visteon's plants in Europe through a continuation of a special voluntary retirement andseparation program started in 2002, and $5 million related to the involuntary separation of about220 employees as a result of the planned closure of our La Verpilliere, France, manufacturingfacility by the end of 2004. The involuntary separations of the employees at the La Verpillierefacility are expected to occur at various times throughout 2004. Additional charges, if any, as aresult of the Ñnalization of employee termination beneÑts above those legally required, will berecorded during the remainder of 2004 based on the estimated dates of the employeeseparations. All of the other actions were substantially completed in the Ñrst quarter of 2004.

12



NOTE 5. Special Charges Ì (Continued)

During the Ñrst quarter of 2004, Visteon paid Ford about $23 million of previously accruedamounts related to an agreement entered into in 2003 to reimburse Ford for the actual net costsof transferring seating production, including costs related to Ford hourly employee voluntaryretirement and separation programs that Ford is expected to implement.

First Quarter 2003 Actions

In the Ñrst quarter of 2003, Visteon recorded pre-tax charges of $31 million ($20 millionafter-tax), with $26 million recorded in costs of sales and $5 million in selling, administrative andother expenses. This includes $27 million related to the involuntary separation of about135 U.S. salaried employees, the separation of about 35 hourly employees located at Visteon'splants in Europe through a continuation of a special voluntary retirement and separation programstarted in 2002, and the elimination of about 120 manufacturing positions in Mexico and otherminor actions. Included in the $31 million pre-tax charge are $4 million of non-cash chargesrelated to the write-down of a group of coiled spring and stamping equipment at our Monroe,Michigan, plant for which production activities were discontinued and the future undiscountedcash Öows were less than the carrying value of these Ñxed assets held for use. Visteonmeasured the impairment loss by comparing the carrying value of these Ñxed assets to theexpected proceeds from disposal of the assets after completion of remaining productioncommitments. The above actions were substantially completed during the Ñrst quarter of 2003.

Reserve Activity

Reserve balances of $32 million and $45 million at March 31, 2004 and December 31, 2003,respectively, are included in current accrued liabilities on the accompanying balance sheets. TheMarch 31, 2004 reserve balance of $32 million includes $23 million related primarily to 2003restructuring activities. Visteon currently anticipates that the restructuring activities to which all ofthe above charges relate will be substantially completed by the end of 2004.

Automotive Glass TotalOperations Operations Visteon

(Restated)(in millions)

December 31, 2003 reserve balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 45 $Ì $ 45First quarter 2004 actions:

Included in costs of sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 Ì 14

Total net expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 59 Ì 59Utilization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (27) Ì (27)

March 31, 2004 reserve balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 32 $Ì $ 32

Utilization in the Ñrst quarter of 2004 of $27 million was primarily related to severance pay.

On April 14, 2004, Visteon announced its intention to move a portion of its Bedford, Indiana,plant operations to an undetermined manufacturing site. This action could affect about 600 of theplant's 1,150 hourly and salaried employees. Timing of this intended move has not been determined.Charges related to this move, if any, will be recognized as appropriate when detailed move plans arecompleted and the terms of any termination beneÑt arrangements are established.

13



NOTE 6. Employee Retirement BeneÑts

Visteon's retirement plans' expense for the Ñrst quarter of 2004 and 2003 are summarizedas follows:

Health Careand Life

Retirement Plans InsuranceU.S. Plans Non-U.S. Plans BeneÑts

2004 2003 2004 2003 2004 2003


First Quarter

Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 14 $ 13 $ 9 $ 8 $ 11 $ 9Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17 15 17 13 16 13Expected return on plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (16) (14) (15) (13) Ì ÌAmortization of:

Plan amendments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2 3 2 Ì Ì(Gains) losses and otherÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 Ì Ì Ì 6 3

Special termination beneÑtsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 3 7 Ì ÌExpense for Visteon-assigned Ford-UAW and certain

salaried employeesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31 21 Ì Ì 37 83

Net pension/postretirement expense ÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 49 $ 37 $ 17 $ 17 $ 70 $108

As discussed in our 2003 Annual Report on Form 10-K, Visteon's expected contributionsduring 2004 to U.S. retirement plans and postretirement health care and life insurance plans are$193 million and $72 million, respectively, including payments to Ford of $115 million and$38 million, respectively. As of March 31, 2004, contributions to U.S. retirement plans andpostretirement health care and life insurance plans were $23 million and $15 million, respectively,including payments to Ford of $17 million and $14 million, respectively.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (the ""MedicareAct'') was signed into law on December 8, 2003. This legislation provides for a federal subsidybeginning in 2006 to sponsors of retiree healthcare beneÑt plans that provide a beneÑt at leastactuarially equivalent to the beneÑt established by the law. Visteon's plans generally provideretiree drug beneÑts that exceed the value of the beneÑt that will be provided by MedicarePart D, and we have concluded that our plans are actuarially equivalent, pending further deÑnitionof the criteria used to determine equivalence. This subsidy is estimated to reduce the beneÑtobligation for Visteon plans by $87 million as of March 31, 2004, and will be recognized throughreduced retiree healthcare expense over the related employee future service lives, subject to Ñnalaccounting guidance to be issued by the Financial Accounting Standards Board.

As a result of charges during the period as well as the effect of the Medicare Act, the portion ofthe postretirement benefit obligation payable to Ford considered contingently payable is$1,079 million and $1,138 million at March 31, 2004 and December 31, 2003, respectively.

14



NOTE 7. Asset Securitization

In the Ñrst quarter of 2004, Visteon established a $100 million revolving accounts receivablesecuritization facility in the United States (""facility agreement''). Under this facility agreement,Visteon can sell a portion of its U.S. trade receivables to Visteon Receivables LLC (""VRL''), awholly-owned consolidated special purpose entity. VRL may then sell, on a non-recourse basis(subject to certain limited exceptions), an undivided interest in the receivables to anasset-backed, multi-seller commercial paper conduit, which is unrelated to Visteon or VRL. Theconduit typically Ñnances the purchases through the issuance of commercial paper, with back-uppurchase commitments from the conduit's Ñnancial institution. The sale of the undivided interestin the receivables from VRL to the conduit will be accounted for as a sale under the provisions ofStatement of Financial Accounting Standards No. 140, ""Accounting for the Transfers andServicing of Financial Assets and Extinguishments of Liabilities.'' When VRL sells an undividedinterest to the conduit, VRL retains the remaining undivided interest. The value of the undividedinterest sold to the conduit will be excluded from our consolidated balance sheet and will reduceour accounts receivable balance. This facility expires in March 2005 and can be extendedannually through March 2008 based upon the mutual agreement of the parties. Additionally, thisfacility contains Ñnancial covenants similar to our unsecured revolving credit facilities. InApril 2004, VRL made an initial sale of a $25 million undivided interest in about $300 million oftotal receivables.

As of March 31, 2004, Visteon has sold euro 35 million ($43 million) of trade receivablesunder a European sale of receivables agreement with a bank. This agreement provides for thesale of up to euro 40 million in trade receivables.

NOTE 8. Debt


(in millions)

Debt payable within one yearCommercial paper ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 27 $ 81Other Ì short-term ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 214 234Current portion of long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 36

Total debt payable within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 276 351

Long-term debt8.25% notes due August 1, 2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 723 7167.95% notes due August 1, 2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 516 5187.00% notes due March 10, 2014 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 452 ÌOther ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 254 233

Total long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,945 1,467

Total debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,221 $1,818

15



NOTE 8. Debt Ì (Continued)

On March 10, 2004, Visteon completed a public oÅering of unsecured Ñxed-rate term debtsecurities totaling $450 million with a maturity of ten years. The securities bear interest at astated rate of 7.00%, with interest payable semi-annually on March 10 and September 10,beginning on September 10, 2004. The securities rank equally with Visteon's existing and futureunsecured Ñxed-rate term debt securities and senior to any future subordinated debt. Theunsecured term debt securities agreement contains certain restrictions, including, among others,a limitation relating to liens and sale-leaseback transactions, as deÑned in the agreement. In theopinion of management, Visteon was in compliance with all of these restrictions. In addition, aninterest rate swap has been entered into for a portion of this debt ($225 million). This swapeÅectively converts the securities from Ñxed interest rate to variable interest rate instruments.

On April 6, 2004, Visteon repurchased $250 million of Visteon's existing 7.95% Ñve-yearnotes maturing on August 1, 2005. In the second quarter of 2004, Visteon will record a pre-taxdebt extinguishment charge of $11 million, which consists of redemption premiums andtransaction costs ($19 million), oÅset partially by the accelerated recognition of gains frominterest rate swaps associated with the repurchased debt ($8 million).

NOTE 9. Income (Loss) Per Share of Common Stock

Basic income (loss) per share of common stock is calculated by dividing reported netincome (loss) by the average number of shares of common stock outstanding during theapplicable period, adjusted for restricted stock. The calculation of diluted income (loss) pershare takes into account the eÅect of dilutive potential common stock, such as stock options,and contingently returnable shares, such as restricted stock.

First Quarter

2004 2003

(Restated)(in millions, exceptper share amounts)

Numerator:Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $ (19)

Denominator:Average common stock outstanding ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 129.9 129.9Less: Average restricted stock outstandingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4.6) (3.9)

Basic shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 125.3 126.0Net dilutive eÅect of restricted stock and stock options ÏÏÏÏÏ 3.2 Ì

Diluted shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 128.5 126.0

Income (loss) per share:Basic ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.16 $(0.15)Diluted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.16 (0.15)

16



NOTE 9. Income (Loss) Per Share of Common Stock Ì (Continued)

For the Ñrst quarter of 2003 potential common stock of about 515,000 shares are excludedfrom the calculation of diluted income (loss) per share because the eÅect of including themwould have been antidilutive.

NOTE 10. Variable Interest Entities

In December 2003, the FASB issued revised Interpretation No. 46 (""FIN 46'') ""Consolidation ofVariable Interest Entities.'' Until this interpretation, a company generally included another entity in itsconsolidated financial statements only if it controlled the entity through voting interests. FIN 46requires a variable interest entity to be consolidated by a company if that company is subject to amajority of the risk of loss from the variable interest entity's activities or entitled to receive a majorityof the entity's residual returns. Application of FIN 46 was required during the fourth quarter of 2003for interests in structures that are commonly referred to as special-purpose entities and for all othertypes of variable interest entities in the first quarter of 2004.

During the Ñrst quarter of 2004, Visteon began to consolidate Lextron/Visteon AutomotiveSystems, a joint venture with Lextron Corporation located in Canton, Mississippi, which started tosupply integrated cockpit modules and front-end modules to Nissan in late 2003. Visteon owns49% of this joint venture. Consolidation of this entity was based on an assessment of the amountof equity investment at risk, the subordinated Ñnancial support provided by Visteon, andVisteon's supply of the joint venture's inventory. The eÅect of consolidating this entity onVisteon's results of operations or Ñnancial position as of March 31, 2004 was not signiÑcant assubstantially all of the joint venture's liabilities and costs are related to activity with Visteon.

From June 30, 2002, a variable interest entity owned by an aÇliate of a bank is included inVisteon's consolidated Ñnancial statements. This entity was established in early 2002 to build aleased facility for Visteon to centralize customer support functions, research and development,and administrative operations. Construction of the facility is planned to be completed in 2004 at acost of about $250 million, with initial occupancy starting in mid-2004. The lease agreementrequires Visteon to make lease payments after construction is substantially completed equal to allinterest then due and payable by the variable interest entity under the related credit agreement.The lease term expires in 2017, at which time Visteon is required to either purchase the facility ata price equal to the sum of all borrowings under the related credit agreement, less certainproceeds and other amounts applied against the balance, or renew the lease upon the mutualagreement of Visteon and the lessor. As of March 31, 2004, this entity has incurred about$159 million in expenditures related to this facility.

17



NOTE 11. Product Warranty

A reconciliation of changes in the product warranty liability is summarized as follows:

First Quarter

2004

(in millions)

Beginning Balance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $22Accruals for products shipped ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7Accruals for pre-existing warranties (including changes in estimates) ÏÏ 9Settlements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8)

Ending BalanceÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $30

NOTE 12. Inventories

Inventories are summarized as follows:



Raw materials, work-in-process and supplies ÏÏÏÏÏÏÏÏÏÏÏ $592 $518Finished products ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 236 243

Total inventories ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $828 $761

U.S. inventoriesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $472 $436

NOTE 13. Comprehensive Income

Comprehensive income is summarized as follows:

First Quarter

2004 2003


Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $(19)Change in foreign currency translation adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (28) 15Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 7

Total comprehensive (loss) income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (6) $ 3

Accumulated other comprehensive loss is comprised of the following:



Foreign currency translation adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 69 $ 97Realized and unrealized gains on derivatives, net of taxÏÏÏÏ 9 8Unrealized loss on marketable securities, net of tax ÏÏÏÏÏ Ì (1)Minimum pension liability, net of tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (158) (158)

Total accumulated other comprehensive lossÏÏÏÏÏÏÏÏÏÏ $ (80) $ (54)

18



NOTE 14. Segment Information

Visteon's reportable operating segments are Automotive Operations and Glass Operations.Financial information for the reportable operating segments is summarized as follows:



First Quarter2004:

Sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4,833 $139 $ 4,972Income (loss) before taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34 9 43Net income (loss)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 6 20Special charges before taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 Ì 14Special charges after taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10 Ì 10Total assets, end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,354 268 11,622

2003:Sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4,551 $153 $ 4,704Income (loss) before taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (29) 4 (25)Net income (loss)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (22) 3 (19)Special charges before taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30 1 31Special charges after taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19 1 20Total assets, end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11,159 285 11,444

NOTE 15. Litigation and Claims

Various legal actions, governmental investigations and proceedings, and claims are pending ormay be instituted or asserted in the future against Visteon, including those arising out of allegeddefects in Visteon's products; governmental regulations relating to safety; employment-relatedmatters; customer, supplier and other contractual relationships; intellectual property rights; productwarranties; product recalls; and environmental matters. Some of the foregoing matters involve ormay involve compensatory, punitive or antitrust or other treble damage claims in very large amounts,or demands for recall campaigns, environmental remediation programs, sanctions, or other reliefwhich, if granted, would require very large expenditures.

Litigation is subject to many uncertainties, and the outcome of individual litigated matters isnot predictable with assurance. Reserves have been established by Visteon for mattersdiscussed in the foregoing paragraph where losses are deemed probable; these reserves areadjusted periodically to reÖect estimates of ultimate probable outcomes. It is reasonably possible,however, that some of the matters discussed in the foregoing paragraph for which reserves havenot been established could be decided unfavorably to Visteon and could require Visteon to paydamages or make other expenditures in amounts, or a range of amounts, that cannot beestimated at March 31, 2004. Visteon does not reasonably expect, based on its analysis, that anyadverse outcome from such matters would have a material eÅect on our Ñnancial condition,results of operations or cash Öows, although such an outcome is possible.

19

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and StockholdersVisteon Corporation

We have reviewed the accompanying consolidated balance sheet of Visteon Corporation andits subsidiaries as of March 31, 2004, and the related consolidated statement of income for eachof the three-month periods ended March 31, 2004 and March 31, 2003 and the condensedconsolidated statement of cash Öows for the three-month periods ended March 31, 2004 andMarch 31, 2003. These interim Ñnancial statements are the responsibility of the Company'smanagement.

We conducted our review in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). A review of interim Ñnancial information consistsprincipally of applying analytical procedures and making inquiries of persons responsible forÑnancial and accounting matters. It is substantially less in scope than an audit conducted inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the objective of which is the expression of an opinion regarding the Ñnancialstatements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modiÑcations that should be made tothe accompanying consolidated interim Ñnancial statements for them to be in conformity withaccounting principles generally accepted in the United States of America.

We previously audited in accordance with the standards of the Public Company AccountingOversight Board (United States), the consolidated balance sheet as of December 31, 2003, andthe related consolidated statements of operations, stockholders' equity, and of cash Öows for theyear then ended (not presented herein), and in our report dated January 22, 2004, except as tothe eÅects of the matters described in Note 2, which are as of March 16, 2005, we expressed anunqualiÑed opinion on those consolidated Ñnancial statements. In our opinion, the information setforth in the accompanying consolidated balance sheet information as of December 31, 2003, isfairly stated in all material respects in relation to the consolidated balance sheet from which ithas been derived.

As discussed in Note 2 to the consolidated Ñnancial statements, the Company restated itsÑnancial statements as of March 31, 2004 and December 31, 2003 and for each of the three-month periods ended March 31, 2004 and March 31, 2003.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLPDetroit, MichiganApril 20, 2004, except as to the eÅects of the matters described in Note 2, which are as ofMarch 16, 2005

20

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

RESTATEMENT

Visteon has restated its previously issued consolidated Ñnancial statements for 2001 through2003 and for the Ñrst three months of 2004, primarily for accounting corrections related topostretirement health care and pension costs, tooling costs, capital equipment costs, inventorycosting and income taxes.

As a result of the restatement, net income decreased $10 million (33.3% of the originallyreported amount) for the Ñrst three months ended March 31, 2004 and net loss increased$4 million (26.7% of the originally reported amount) for the Ñrst three months endedMarch 31, 2003. The restatement decreased reported net income per share by $0.07 for theÑrst three months ended March 31, 2004 and increased reported net loss per share by $0.03for the Ñrst three months ended March 31, 2003.

Further information on the nature and impact of these adjustments is provided in Note 2,""Restatement of Financial Statements'' to our consolidated Ñnancial statements includedelsewhere in this Form 10-Q/A.

The financial data presented herein are unaudited, but in the opinion of management reflectthose adjustments, including normal recurring adjustments, necessary for a fair statement of suchinformation. Reference should be made to the consolidated financial statements and accompanyingnotes included in the company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2003, as filed with the Securities and Exchange Commission on February 13, 2004and as amended on March 16, 2005.

Overview

Visteon's worldwide sales for the Ñrst quarter of 2004 were $5.0 billion, compared with$4.7 billion for the same period in 2003. Much of the increase in sales was a result of highersales to non-Ford customers, which increased 36% over Ñrst quarter 2003 levels, and thefavorable impact of exchange rates. Ford's Ñrst quarter 2004 combined production volumes forNorth America and Europe, our primary sales markets with Ford, were down slightly comparedwith the same period last year. As a result, our Ñrst quarter 2004 sales to Ford declined slightlycompared to the same period in 2003.

Net income for the Ñrst quarter of 2004 was $20 million, or $0.16 per share, an improvementof $39 million over a net loss of $19 million, or $0.15 per share, for the Ñrst quarter of 2003.ProÑt improvement came from cost reductions, increased non-Ford business, and restructuringeÅorts. We expect recent initiatives, such as the European Plan for Growth, the exit from ourunproÑtable ChesterÑeld seating operations and the restructuring of postretirement beneÑtobligations to Ford, to continue to beneÑt us on our path to proÑtability.

We continue to focus on cash Öow generation and maintaining a strong liquidity position. Ourcash provided by operating activities was $103 million, a $238 million improvement from the Ñrstquarter of 2003, and we ended the quarter with $1.2 billion in cash and marketable securities.During the quarter, we improved our trade working capital Öows, issued new public debtsecurities, commenced a tender oÅer to repurchase a portion of our outstanding debt securitiesthat mature in 2005 and set in place a revolving accounts receivable securitization facility.

21

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS Ì (Continued)

Restructuring, Dispositions and Special Charges

The table below presents special charges related to restructuring initiatives and other actionsduring the Ñrst quarter of 2004 and 2003:


(in millions)

First Quarter 2004 (Restated):

Special charges:European Plan for GrowthÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (9) $Ì $ (9)Other actions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5) Ì (5)

Total Ñrst quarter 2004 special charges, before taxes ÏÏÏÏÏ $(14) $Ì $(14)

Total Ñrst quarter 2004 special charges, after taxes ÏÏÏÏÏÏÏ $(10) $Ì $(10)

First Quarter 2003:

Special charges:North American salaried restructuring ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(18) $Ì $(18)Monroe Plant equipment write-down ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) Ì (4)European Plan for GrowthÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3) Ì (3)Other actions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5) (1) (6)

Total Ñrst quarter 2003 special charges, before taxes ÏÏÏÏÏ $(30) $(1) $(31)

Total Ñrst quarter 2003 special charges, after taxes ÏÏÏÏÏÏÏ $(19) $(1) $(20)

In the Ñrst quarter of 2004, Visteon recorded pre-tax charges of $14 million in costs of sales($10 million after-tax) which includes $9 million for the separation of about 50 hourly employeeslocated at several Visteon plants in Europe through a continuation of a special voluntaryretirement and separation program started in 2002, and an additional $5 million related to theinvoluntary separation of about 220 employees as a result of the planned closure of ourLa Verpilliere, France, manufacturing facility by the end of 2004. The involuntary separations ofthe employees at the La Verpilliere facility are expected to occur at various times throughout2004. Additional charges, if any, as a result of the Ñnalization of employee termination beneÑtsabove those legally required, will be recorded during the remainder of 2004 based on theestimated dates of the employee separations. All of the other actions were substantiallycompleted in the Ñrst quarter of 2004.

In the Ñrst quarter of 2003, Visteon recorded pre-tax charges of $31 million ($20 millionafter-tax). These charges include $18 million related to the involuntary separation of about135 U.S. salaried employees, $3 million for the separation of about 35 hourly employees locatedat Visteon's plants in Europe through a continuation of a special voluntary retirement andseparation program started in 2002, and $6 million for the elimination of about 120 manufacturingpositions in Mexico and other minor actions. Included in the $31 million pre-tax charge are$4 million of non-cash charges related to the write-down of a group of coiled spring andstamping equipment at our Monroe, Michigan, plant for which production activities werediscontinued and the future undiscounted cash Öows were less than the carrying value of theseÑxed assets held for use. Visteon measured the impairment loss by comparing the carrying valueof these Ñxed assets to the expected proceeds from disposal of the assets after completion ofremaining production commitments. The above actions were substantially completed during theÑrst quarter of 2003.

22


Cash payments related to special charges, including those for severance and special pensionbeneÑts, were $67 million and $41 million during the Ñrst quarters of 2004 and 2003, respectively.The Ñrst quarter 2004 amount includes payments to Ford of about $23 million of previouslyaccrued amounts related to an agreement entered into in 2003 to reimburse Ford for the actualnet costs of transferring seating production, including costs related to Ford hourly employeevoluntary retirement and separation programs that Ford is expected to implement.

We continue to evaluate the possibility of partnerships, sales or closings involving otherunder-performing or non-core businesses. However, there can be no assurance that a transactionor other arrangement favorable to Visteon will occur in the near term or at all. On April 14, 2004,Visteon announced its intention to move a portion of its Bedford, Indiana, plant operations to anundetermined manufacturing site. This action could affect about 600 of the plant's 1,150 hourly andsalaried employees. Timing of this intended move has not been determined. Charges related to thismove, if any, will be recognized as appropriate when detailed move plans are completed and theterms of any termination benefit arrangements are established.

Results of Operations

First Quarter 2004 Compared with First Quarter 2003

Sales for each of our segments for the Ñrst quarter of 2004 and 2003 are summarized in thefollowing table:

2004First Quarter over/(under)

2004 2003 2003

(in millions)

Automotive OperationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,833 $4,551 $282Glass Operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 139 153 (14)

Total sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,972 $4,704 $268

Memo: Sales to non-Ford customersAmount ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,335 $ 983 $352Percentage of total sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27% 21% 6 pts

Sales for Automotive Operations were $4.8 billion in 2004, compared with $4.6 billion in2003, an increase of $282 million or 6%. This increase reÖects favorable currency changes of$196 million and the impact of new business primarily with non-Ford customers oÅset partially byprice reductions. Additionally, 2004 sales were aÅected by the loss of $128 million in revenuefrom the exit of seating operations on June 23, 2003.

Sales for Glass Operations were $139 million in 2004, compared with $153 million in 2003,a decrease of $14 million or 9%, resulting primarily from lower Ford North America productionvolume.

Costs of Sales for the Ñrst quarter of 2004 were $4.7 billion, up $175 million compared withthe Ñrst quarter of 2003. Costs of sales includes primarily material, labor, manufacturingoverhead and other costs, such as product development costs. The increase reÖects currencyÖuctuations of $175 million, and higher variable costs associated with new business withcustomers, oÅset partially by an elimination of variable costs of $153 million resulting from theexit of our seating operations, and favorable cost performance. Special charges included in thisline item were $14 million in 2004 and $26 million in 2003.

23


Selling, administrative and other expenses for the Ñrst quarter of 2004 were $265 million,$21 million higher compared with the Ñrst quarter of 2003. The increase reÖects primarilyincremental Information Technology (""IT'') actions of $22 million. Costs associated with suchincremental IT actions are expected to continue into mid-2004. Special charges included in thisline item were $5 million for 2003.

Net interest expense of $19 million in the Ñrst quarter of 2004 was even with the Ñrstquarter of 2003.

Equity in net income of aÇliated companies was $11 million in the Ñrst quarter of 2004,compared with $15 million in the Ñrst quarter of 2003, with the decrease related primarily to ouraÇliates in Asia.

Income (loss) before income taxes, and minority interests, including and excluding specialcharges, is the primary proÑtability measure used by our chief operating decision makers. Thefollowing table shows income (loss) before income taxes for the Ñrst quarter of 2004 and 2003,for each of our segments:

2004First Quarter over

2004 2003 2003


Automotive Operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 34 $(29) $63Glass OperationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 4 5

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 43 $(25) $68

Memo:Special charges included above ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(14) $(31) $17

Automotive Operations' Ñrst quarter 2004 proÑt before income taxes was $34 millioncompared with a loss of $29 million for the Ñrst quarter of 2003. Special charges before taxes in2004 were down $17 million from 2003. Additionally, 2003 results include a loss of $25 millionfrom seating operations that were exited June 23, 2003. Results were aÅected also by newbusiness and favorable cost performance, oÅset partially by price reductions.

ProÑt before income taxes for Glass Operations in Ñrst quarter of 2004 was $9 millioncompared with $4 million before taxes for the Ñrst quarter of 2003, reÖecting favorable costperformance, oÅset partially by lower volume.

Provision (beneÑt) for income taxes represents an eÅective income tax rate of 44% in theÑrst quarter of 2004 compared with (35%) in the Ñrst quarter of the prior year. The change inour eÅective tax rate is primarily due to the need to maintain full valuation allowances againstdeferred tax assets in certain foreign jurisdictions.

Minority interests in net income of subsidiaries was $9 million in the Ñrst quarter of 2004,compared with $8 million in the Ñrst quarter of 2003. Minority interest amounts are relatedprimarily to our 70% ownership interest in Halla Climate Control Corporation located in Korea.

24


Net income (loss) for the Ñrst quarter of 2004 and 2003 are shown in the following table foreach of our segments:

2004First Quarter over

2004 2003 2003


Automotive Operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 14 $(22) $36Glass OperationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 3 3

Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 20 $(19) $39

Memo:Special charges included above ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(10) $(20) $10

Visteon reported a net proÑt for the Ñrst quarter of 2004 of $20 million compared with a netloss of $19 million for the Ñrst quarter of 2003 because of the factors described above in income(loss) before income taxes. Special charges after taxes were $10 million and $20 million for theÑrst quarter of 2004 and 2003, respectively.

Liquidity and Capital Resources

Overview

Visteon's funding objective is to Ñnance its worldwide business with cash from operations,supplemented when required by a combination of liquidity sources, including but not limited tocash and cash investments, receivables programs, and committed and uncommitted bankfacilities and securities issuance. These sources are used also to fund working capital needs,which are highly variable during the year because of changing customer production schedules.

Visteon's balance sheet reÖects cash and marketable securities of $1,188 million and totaldebt of $2,221 million at March 31, 2004, compared with cash and marketable securities of$956 million and total debt of $1,818 million at December 31, 2003. Net debt, deÑned as theamount by which total debt exceeds total cash and marketable securities, was $1,033 million atMarch 31, 2004, and $862 million at December 31, 2003. The increase in cash and marketablesecurities is more than explained by the March 2004 issuance of $450 million in debt securities,and the increase in net debt is primarily due to an increase in trade working capital related tohigher volumes at the end of the Ñrst quarter compared with the year-end shutdown period.Visteon's ratio of total debt to total capital, which consists of total debt plus total stockholders'equity, was 56% at March 31, 2004 and 51% at December 31, 2003, and increased primarilybecause of the recent debt issuance.

Financing Arrangements

On March 10, 2004, Visteon completed a public oÅering (the ""Notes Sale'') of unsecuredÑxed-rate 7.00% term debt securities totaling $450 million in aggregate principal amount due inMarch 2014. Proceeds from the Notes Sale were used for a debt retirement and for generalcorporate purposes. Concurrent with the Notes Sale, Visteon announced an oÅer (the ""TenderOÅer'') to purchase for cash up to $250 million aggregate principal amount of our 7.95% notesdue in August 2005. The Tender OÅer expired on April 2, 2004 and $250 million of these noteswere retired on April 6, 2004.

25


In March 2004, Visteon established a $100 million revolving accounts receivablesecuritization facility (the ""facility'') in the U.S. The facility allows for sale of a portion of U.S.trade receivables to a wholly-owned consolidated special purpose entity, Visteon ReceivablesLLC (""VRL''), which may then sell an undivided interest in the receivables to an asset-backedmulti-seller conduit which is unrelated to Visteon or VRL. In April 2004, VRL made an initialreceivables sale to the conduit of $25 million. The facility expires in March 2005 and isextendable annually through March 2008 through mutual agreement of both parties, as discussedfurther in Note 7 to the consolidated Ñnancial statements.

Visteon has Ñnancing arrangements with a syndicate of third-party lenders providingcontractually committed, unsecured revolving credit facilities in an aggregate maximum amount of$1,580 million (the ""Credit Facilities''). The Credit Facilities include a 364-day revolving creditline in the amount of $555 million, which expires June 2004, and a Ñve-year revolving credit linein the amount of $775 million, which expires June 2007. Visteon is currently renegotiating the364-day facility that expires in June. The Credit Facilities also include a Ñve-year, delayed-drawterm loan in the amount of $250 million, which will be used primarily to Ñnance new constructionfor facilities consolidation in Southeast Michigan. During the Ñrst quarter of 2004, the 364-dayrevolving credit line agreement was amended to increase various interest rates applicable toborrowings under such facility. At March 31, 2004, there were no borrowings outstanding underthe 364-day facility or the Ñve-year facility; there were $47 million of obligations under standbyletters of credit under the Ñve-year facility, and $128 million borrowed against the delayed-drawterm loan. The Credit Facilities contain certain aÇrmative and negative covenants, including aÑnancial covenant not to exceed a leverage ratio of net debt to EBITDA (excluding specialcharges and other items) of 3.5 to 1. Increases in the ratio of net debt to EBITDA can occurduring quarters following seasonal shutdown periods, when cash usage increases. In the opinionof management, Visteon has been in compliance with all covenants since the inception of theCredit Facilities. During 2004, we expect to continue to be in compliance, although there can beno assurance that this will be the case especially during quarters following seasonal shutdownperiods, when our cash usage may increase signiÑcantly.

Visteon has maintained a commercial paper program utilizing the Credit Facilities as backup.As of March 31, 2004, we had $27 million outstanding under our commercial paper programcompared with $81 million outstanding at December 31, 2003.

Visteon maintains a trade payables program through General Electric Capital Corporation(""GECC'') that provides Ñnancial Öexibility to Visteon and its suppliers. The program is presentlyunder review by both parties. When a supplier participates in the program, GECC pays thesupplier the amount due from Visteon in advance of the original due date. In exchange for theearlier payment, our suppliers accept a discounted payment. Visteon pays GECC the full amount.Approximately $100 million was outstanding to GECC under this program at March 31, 2004 andDecember 31, 2003. As part of the same program with GECC, Visteon is allowed to deferpayment to GECC for a period of up to 30 days. At March 31, 2004, Visteon had not exercisedthe deferral option of the program.

In addition, Visteon at times participates in a trade payables program offered by one of ourcustomers. When we participate, our receivables are reduced and our cash balances are increased.We did not participate in the program as of March 31, 2004, although at December 31, 2003 ourreceivables had been reduced by $75 million due to this program.

Visteon has entered into interest rate swaps to manage our interest rate risk. These swapseÅectively convert a portion of Visteon's Ñxed rate debt into variable rate debt, and as a result,approximately 40% of Visteon's borrowings are eÅectively on a Ñxed rate basis, while theremainder is subject to changes in short-term interest rates.

26


Credit Ratings

Our long-term credit rating with Standard & Poor's (""S&P'') is BB°; with Moody's it is Ba1,and with Fitch it is BBB¿. Both S&P and Moody's rate Visteon as ""stable.'' Fitch rates ourshort-term credit as F3. Both S&P and Moody's have covered Visteon since June 2000, whileFitch initiated coverage on June 11, 2003. We continue to have access to suÇcient liquidity, andbelieve we will continue to have access, to meet ongoing operating requirements although thataccess is less reliable and could be more costly than it was previously.

Cash Requirements

Visteon's expected cash outÖows related to debt have changed since December 31, 2003 asa result of completing in March 2004 the Notes Sale and the April 2004 Tender OÅer asdiscussed further in Note 8 to the consolidated Ñnancial statements.

As of March 31, 2004, Visteon had guaranteed about $22 million of borrowings held byunconsolidated joint ventures. In addition, we have guaranteed Tier 2 suppliers' debt and leaseobligations of about $16 million at March 31, 2004 to ensure the continued supply of essentialparts.

Cash required to meet capital expenditure needs in the Ñrst quarter 2004 was $196 million.Capital expenditures in 2004 are expected to be higher than historic levels as described belowunder ""Cash Flows Ì Investing Activities.'' Visteon's cash and liquidity needs also are impactedby the level, variability, and timing of our customers' worldwide vehicle production, which variesbased on economic conditions and market shares in major markets. Our intra-year needs areimpacted also by seasonal eÅects in the industry, such as the shutdown of operations for abouttwo weeks in July, the subsequent ramp-up of new model production and the additionalone-week shutdown in December by our primary North American customers. These seasonaleÅects normally require use of liquidity resources during the Ñrst and third quarters.

Visteon expects improved performance for 2004 will result in cash from operating activitiesexceeding capital expenditure requirements, although this may not be the case during speciÑcquarters. Based on our present assessment of future customer production levels over a two-yeartime horizon, we believe we can meet general and seasonal cash needs using cash Öows fromoperations, cash balances and borrowings, if needed. Visteon also believes we can supplementthese sources with access to the capital markets on satisfactory terms and in adequate amounts,if needed, although there can be no assurance that this will be the case.

Pension and Postretirement BeneÑts

First quarter 2004 postretirement healthcare and life insurance expense decreased by$38 million when compared with the same period in 2003, primarily as a result of Visteon'samended and restated agreements with Ford and the Medicare Act. Pension expense for Ñrstquarter of 2004 and 2003 was $66 million and $54 million, respectively, primarily reÖecting lowerdiscount rates and the eÅect of the 2003 Ford-UAW collective bargaining agreement.

27


Legislation

The Medicare Act was signed into law on December 8, 2003. This legislation provides for afederal subsidy beginning in 2006 to sponsors of retiree healthcare beneÑt plans that provide abeneÑt at least actuarially equivalent to the beneÑt established by the law. Visteon's plansgenerally provide retiree drug beneÑts that exceed the value of the beneÑt that will be providedby Medicare Part D, and we have concluded that our plans are actuarially equivalent, pendingfurther deÑnition of the criteria used to determine equivalence. This subsidy is estimated toreduce the beneÑt obligation for Visteon plans by $87 million as of March 31, 2004, and will berecognized through reduced retiree healthcare expense over the related employee future servicelives, subject to Ñnal accounting guidance to be issued by the Financial Accounting StandardsBoard. The impact on Ford plans is included in the post retirement healthcare and life insuranceexpense decrease noted above.

Cash Flows

Operating Activities

Cash provided by operating activities during the Ñrst quarter of 2004 totaled $103 million,compared with cash used by operating activities of $135 million for the same period in 2003. Theimprovement is largely explained by improved trade working capital Öows primarily due toimproved collections in part reÖecting improved U.S. payment terms under Visteon's recentagreement with Ford. Cash payments related to special charges, including those for severanceand special pension beneÑts, were $67 million and $41 million during the Ñrst quarter of 2004 and2003, respectively.

Investing Activities

Cash used in investing activities was $193 million during the Ñrst quarter of 2004, comparedwith $153 million for the Ñrst quarter of 2003. Visteon's capital expenditures in the Ñrst quarter of2004 totaled $196 million, compared with $181 million for the same period in 2003. Our capitalspending in 2004 is higher than historic levels as we undertake spending to fund newconstruction for consolidation of operations in Southeast Michigan and also to fund our ITinfrastructure transition and improvements. Visteon anticipates that our facilities' consolidationwill allow us to centralize customer support functions, research and development, and selectedbusiness operations at lower operating costs. During the Ñrst quarter of 2004, Visteon sold$3 million of marketable securities, compared with net sales of securities of $22 million in thesame period last year.

Financing Activities

Cash provided by Ñnancing activities totaled $328 million in the Ñrst quarter of 2004,compared with cash usage of $22 million in the same period in 2003. The cash proceeds in 2004reÖect primarily the issuance of debt oÅset partially by funds used to repay maturing short-termcommercial paper obligations, dividend payments and purchases of treasury stock.

On April 13, 2004, the Visteon Board of Directors declared a dividend of $0.06 per share onVisteon's common stock, payable on June 1, 2004, to the stockholders of record as ofApril 30, 2004. Visteon has paid a dividend each quarter since it became an independent, publiclytraded company in June 2000.

28


Outlook

Revenue for the second quarter of 2004 is projected to be in the range of $4.7 billion to$4.8 billion, up from $4.6 billion in 2003, reÖecting primarily non-Ford revenue growth. Visteonexpects second quarter net income of $13 million to $25 million, or $0.10 per share to$0.20 per share.

Visteon expects full year revenue to be between $18.6 billion and $18.8 billion in 2004, nearlya $1 billion improvement from 2003. This estimate is based on full year Ford North Americanvehicle production of 3.7 million units, which is similar to 2003 levels. The increase is expected tocome from increased non-Ford sales, which is estimated to exceed $5 billion for full year 2004.Visteon expects net income of $90 million to $140 million, or $0.70 per share to $1.10 per share.Full year 2004 projected results include anticipated pre-tax special charges of up to $50 million.Visteon expects cash from operations to be higher than capital spending for the full year.

The net income estimates above reÖect an eÅective tax rate of 38%; however, the rate couldvary quarter-to-quarter. The rate is largely dependent on our forecasted pre-tax income (loss)by country and includes the eÅect of deferred tax valuation allowances expected to be requiredby the end of the year. Changes in our forecast or actual results could have a signiÑcant impacton our eÅective tax rate for a given quarter or for the full year. Additionally, an adverse change inour forward-year outlook, particularly in the U.S., may change our assessment regarding therecoverability of our remaining net deferred tax asset and result in a further increase in ourdeferred tax valuation allowance. Such an increase would result in additional income tax expenseand reduce net income in the applicable period.

Labor Matters

On April 29, 2004, Visteon announced that it had reached a tentative agreement with theUnited Auto Workers union (""UAW'') on a seven-year supplement to their existing mastercollective bargaining agreement providing for wage and beneÑt levels for future covered hiresthat are signiÑcantly below those currently in place for Ford-UAW workers assigned to Visteon.SpeciÑc wage rates, beneÑts structure and other terms are pending the Ñnal agreement betweenthe parties.

Other Financial Information

PricewaterhouseCoopers LLP, an independent registered public accounting Ñrm, performed alimited review of the Ñnancial data presented on page 3 through 19 inclusive. The review wasperformed in accordance with standards for such reviews established by the Public CompanyAccounting Oversight Board (United States). The review did not constitute an audit; accordingly,PricewaterhouseCoopers LLP did not express an opinion on the aforementioned data. Theirreview report included herein is not a ""report'' within the meaning of Sections 7 and 11 of theSecurities Act of 1933 and the independent registered public accounting Ñrm's liability underSection 11 does not extend to it.

29


Cautionary Statement regarding Forward-Looking Information

This report contains forward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Words such as ""anticipate,'' ""expect,'' ""intend,'' ""plan,'' ""believe,''""seek,'' ""outlook'' and ""estimate'' as well as similar words and phrases signify forward-lookingstatements. Visteon's forward-looking statements are not guarantees of future results andconditions and important factors, risks and uncertainties may cause our actual results to diÅermaterially from those expressed in our forward-looking statements, including, but not limited to,the following:

‚ Visteon's dependence on Ford.

‚ Visteon's ability to satisfy its pension and other post-employment beneÑt obligations, andto retire outstanding debt and satisfy other contractual commitments, all at the levels andtimes planned by management.

‚ Changes in vehicle production volume in markets where we operate, and in particularchanges in Ford's North American vehicle production volume.

‚ Changes in the operations (including products, product planning and part sourcing),Ñnancial condition, results of operations or market share of Visteon's customers,particularly its largest customer, Ford, which is undergoing a comprehensive ""revitalizationplan.''

‚ Visteon's ability to increase sales to customers other than Ford and to maintain currentbusiness with, and to provide competitive quotes and win future business from, Ford.

‚ Visteon's ability to generate cost savings to oÅset or exceed agreed upon price reductionsor price reductions to win additional business and, in general, to maintain and improve itsoperating performance; to recover engineering and tooling costs; to streamline and focusits product portfolio; to sustain technological competitiveness; to compete favorably withautomotive parts suppliers with lower cost structures and greater ability to rationalizeoperations; to achieve the beneÑts of its restructuring activities; and to exit non-performingbusinesses on satisfactory terms, particularly due to limited Öexibility under existing laboragreements.

‚ Visteon's ability to satisfy its future capital and liquidity requirements; Visteon's ability toaccess the credit and capital markets, which depends in large part on Visteon's creditratings (which have declined in the past and could decline further in the future); andVisteon's ability to comply with Ñnancial covenants applicable to it.

‚ Visteon's ability to recover its remaining net deferred tax asset through reductions in itstax liabilities in future periods.

‚ Visteon's ability to reduce its cost structure by, among other things, negotiating asupplement to a new Visteon-UAW collective bargaining agreement that would provide forlower wages and less-expensive beneÑts for future Visteon hourly workers that are morein line with what competitors pay.

‚ Restrictions in labor contracts with unions, and with the UAW in particular, thatsigniÑcantly restrict Visteon's ability to close plants, divest unproÑtable, noncompetitivebusinesses, change local work rules and practices at a number of facilities and implementcost-saving measures.

‚ SigniÑcant changes in the competitive environment in the major markets where Visteonprocures materials, components or supplies or where its products are manufactured,distributed or sold.

30


‚ Visteon's ability to realize sales and proÑts from its book of business.

‚ Legal and administrative proceedings, investigations and claims, including product liability,warranty, environmental and safety claims, and any recalls of products manufactured orsold by Visteon.

‚ Changes in economic conditions, currency exchange rates, changes in foreign laws,regulations or trade policies or political stability in foreign countries where Visteonprocures materials, components or supplies or where its products are manufactured,distributed or sold.

‚ Shortages of materials or interruptions in transportation systems, labor strikes, workstoppages or other interruptions to or diÇculties in the employment of labor in the majormarkets where Visteon purchases materials, components or supplies to manufacture itsproducts or where its products are manufactured, distributed or sold.

‚ Changes in laws, regulations, policies or other activities of governments, agencies andsimilar organizations, domestic and foreign, that may tax or otherwise increase the cost of,or otherwise aÅect, the manufacture, licensing, distribution, sale, ownership or use ofVisteon's products or assets.

‚ Possible terrorist attacks or acts of war, which could exacerbate other risks such asslowed vehicle production, interruptions in the transportation system, or fuel prices andsupply.

‚ The cyclical and seasonal nature of the automotive industry.

‚ Visteon's ability to comply with environmental, safety and other regulations applicable to itand any increase in the requirements, responsibilities and associated expenses andexpenditures of these regulations.

‚ Visteon's ability to protect its intellectual property rights, and to respond to changes intechnology and technological risks and to claims by others that Visteon infringes theirintellectual property rights.

‚ Delays in completing Visteon's transition to an information technology environment that isseparate from Ford's environment and to a new facility for the majority of its centralexecutive, administrative and engineering functions.

‚ Other factors, risks and uncertainties detailed from time to time in Visteon's Securities andExchange Commission Ñlings.

These risks and uncertainties are not the only ones facing our company. Additional risks anduncertainties not presently known to Visteon or currently believed to be immaterial also mayadversely aÅect Visteon. Any risks and uncertainties that develop into actual events could havematerial adverse eÅects on Visteon's business, Ñnancial condition and results of operations. Forthese reasons, do not place undue reliance on our forward-looking statements. Visteon does notintend or assume any obligation to update any of these forward-looking statements.

31


New Accounting Standards and Accounting Changes

In December 2003, the FASB issued revised Interpretation No. 46 (""FIN 46'') ""Consolidation ofVariable Interest Entities.'' Until this interpretation, a company generally included another entity in itsconsolidated financial statements only if it controlled the entity through voting interests. FIN 46requires a variable interest entity to be consolidated by a company if that company is subject to amajority of the risk of loss from the variable interest entity's activities or entitled to receive a majorityof the entity's residual returns. Application of FIN 46 was required during the fourth quarter of 2003for interests in structures that are commonly referred to as special-purpose entities and for all othertypes of variable interest entities in the first quarter of 2004. The effect of applying the consolidationprovisions of FIN 46 on Visteon's results of operations or financial position as of March 31, 2004was not significant.

In December 2003, the FASB issued Statement of Financial Accounting Standards No. 132(revised 2003) (""SFAS 132-R''), ""Employers' Disclosures about Pensions and OtherPostretirement BeneÑts.'' This revised statement expands Ñnancial statement disclosures fordeÑned beneÑt plans related to plan assets, investment policies, future beneÑt payments andplan contributions. Certain disclosure requirements of SFAS 132-R were eÅective for the yearended December 31, 2003, with additional disclosure requirements during 2004.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Visteon is exposed to market risks from changes in currency exchange rates, interest ratesand certain commodity prices. To manage these risks, we use a combination of Ñxed pricecontracts with suppliers, cost sourcing arrangements with customers and Ñnancial derivatives.We maintain risk management controls to monitor the risks and the related hedging. Derivativepositions are examined using analytical techniques such as market value and sensitivity analysis.Derivative instruments are not used for speculative purposes, as per clearly deÑned riskmanagement policies.

Foreign Currency Risk

Visteon's net cash inÖows and outÖows exposed to the risk of changes in exchange ratesarise from the sale of products in countries other than the manufacturing source, foreigncurrency denominated supplier payments, debt and other payables, subsidiary dividends andinvestments in subsidiaries. Visteon's on-going solution is to reduce the exposure throughoperating actions. We use foreign exchange forward contracts to manage a portion of ourexposure.

Visteon's primary foreign exchange exposure includes the Mexican peso, euro, Canadiandollar and Czech koruna. Because of the mix between our costs and our revenues in variousregions, we are exposed generally to weakening of the euro and to strengthening of the Mexicanpeso, Canadian dollar and Czech koruna. For transactions in these currencies, Visteon utilizes astrategy of partial coverage. As of March 31, 2004, our coverage for projected transactions inthese currencies was about 60% for 2004.

32

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Ì(Continued)

As of March 31, 2004 and December 31, 2003, the net fair value of Ñnancial instruments withexposure to currency risk was an asset of $2 million and a liability of $10 million, respectively.The hypothetical pre-tax gain or loss in fair value from a 10% favorable or adverse change inquoted currency exchange rates would be approximately $91 million and $81 million as ofMarch 31, 2004 and December 31, 2003, respectively. These estimated changes assume aparallel shift in all currency exchange rates and include the gain or loss on Ñnancial instrumentsused to hedge loans to subsidiaries. Because exchange rates typically do not all move in thesame direction, the estimate may overstate the impact of changing exchange rates on the net fairvalue of our Ñnancial derivatives. It is also important to note that gains and losses indicated inthe sensitivity analysis would be oÅset by gains and losses on the underlying exposures beinghedged.

Interest Rate Risk

As of March 31, 2004 and December 31, 2003, the net fair value of interest rate swaps wasan asset of $26 million and $15 million, respectively. The potential loss in fair value of theseswaps from a hypothetical 50 basis point adverse change in interest rates would beapproximately $5 million and $10 million as of March 31, 2004 and December 31, 2003,respectively. Because of hedge accounting under Statement of Financial Accounting StandardsNo. 133 (""SFAS 133''), ""Accounting for Derivative Instruments and Hedging Activities,'' thisreduction in value would not immediately aÅect Visteon's reported income.

The annual increase in pre-tax interest expense from a hypothetical 50 basis point adversechange in variable interest rates (principally LIBOR) would be approximately $6 million as ofMarch 31, 2004 and December 31, 2003. Approximately half of the increases in expense isrelated to variable-rate debt and half is related to interest rate swaps.

Commodity Risk

Visteon has entered into long-term agreements with some of our key suppliers ofnon-ferrous metals to protect Visteon from changes in market prices. In addition, some productsVisteon manufactures and sells to Ford containing non-ferrous metals are price-adjusted monthlybased on metal content and market price. During the third quarter of 2003, Visteon initiated theuse of Ñnancial instruments to lock in pricing of its forward year copper purchases. As ofMarch 31, 2004 and December 31, 2003, the net fair value of copper derivatives was an asset of$5 million and $2 million, respectively. The potential loss in fair value from a 10% adverse changein quoted prices would be $3 million and $2 million at March 31, 2004 and December 31, 2003,respectively. Because of hedge accounting under SFAS 133, this reduction in value would notimmediately aÅect Visteon's reported income.

Natural gas is a commodity Visteon uses in its manufacturing processing, related primarily toglass production, as well as for heating our facilities. Uncertainty in both supply and demand forthis commodity has led to price instability over the last three years. As of March 31, 2004,Visteon has locked in pricing on about 65% of its projected usage for 2004, through Ñnancialderivatives. As of March 31, 2004 and December 31, 2003, the net fair value of natural gasderivatives was an asset of $9 million. The potential loss in fair value of these derivativecontracts from a 10% adverse change in quoted prices would be approximately $5 million atMarch 31, 2004 and December 31, 2003, respectively. Because of hedge accounting underSFAS 133, this reduction in value would not immediately aÅect Visteon's reported income.

33

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Ì(Continued)

Precious metals (for catalytic converter production) are purchased through a Ford-directedsource; Ford accepts all market price risk. As a result, we presently do not enter into Ñnancialderivatives to hedge these potential exposures. Steel products are purchased for various usesbut are not hedged due to the lack of such instruments in the market. Visteon's exposure to steelprice changes is managed through Ñxed-price contracts and negotiations with our suppliers andour customers.

ITEM 4. CONTROLS AND PROCEDURES

Visteon has restated its previously issued consolidated Ñnancial statements for 2001 through2003 and for the Ñrst nine months of 2004, primarily for accounting corrections related topostretirement health care and pension costs, tooling costs, capital equipment costs, inventorycosting and income taxes. Refer to Note 2 to the consolidated Ñnancial statements for furtherinformation regarding this restatement. In connection with the restatement and the preparationand Ñling of this Form 10-Q/A, Visteon re-evaluated, under the supervision and with theparticipation of Visteon's Disclosure Committee and management, including the Chief ExecutiveOÇcer and the Chief Financial OÇcer, the eÅectiveness of the design and operation of ourdisclosure controls and procedures pursuant to Exchange Act Rule 13a-15 as of March 31, 2004,the end of the period covered by this Form 10-Q/A. Based upon this evaluation, the ChiefExecutive OÇcer and the Chief Financial OÇcer concluded that our disclosure controls andprocedures were not eÅective for the reasons discussed below related to the weaknesses in ourinternal control over Ñnancial reporting. To address the control weaknesses described below,Visteon performed additional analysis and other post-closing procedures to ensure ourconsolidated Ñnancial statements are prepared in accordance with generally accepted accountingprinciples. Accordingly, management believes that the consolidated Ñnancial statements includedin this report fairly present in all material respects our Ñnancial condition, results of operationsand cash Öows for the periods presented.

During the course of the preparation of Visteon's Annual Report on Form 10-K for the Ñscalyear ended December 31, 2004, the company identiÑed the following material weaknesses in thecompany's internal controls over Ñnancial reporting.

‚ Accounting for Employee Postretirement Health Care BeneÑts

As of March 31, 2004, Visteon did not maintain eÅective controls over the accounting foramendments to U.S. postretirement health care beneÑt plans. SpeciÑcally, controls todetermine that such amendments were reviewed and all necessary actions wereimplemented, including communications to aÅected employees, prior to recognizing theaccounting treatment in Visteon's consolidated Ñnancial statements, were not eÅective.This control deÑciency resulted in an adjustment to our fourth quarter 2004 Ñnancialresults, and resulted in the restatement of Visteon's consolidated Ñnancial statements for2002 and 2003 and for the Ñrst, second and third quarters of 2004.

34

ITEM 4. CONTROLS AND PROCEDURES Ì (Continued)

The requirement of Statement of Financial Accounting Standards No. 106, ""Employers'Accounting for Postretirement BeneÑts Other Than Pensions'' (""SFAS No. 106''), tocommunicate changes in eligibility requirements to certain employees for postretirementhealth care beneÑts prior to reÖecting an accounting treatment change was not satisÑed.EÅective in January 2002, Visteon amended its retiree health care beneÑts plan for certainof its U.S. employees. EÅective in January 2004, a Visteon wholly owned subsidiaryamended its retiree health care beneÑts plan for its employees. These amendmentschanged the eligibility requirements for participants in the plan. As a result of theseamendments, which were not communicated to aÅected employees, Visteon changed theexpense attribution periods, which eliminated cost accruals for younger employees andincreased accrual rates for older participating employees.

The errors resulting from this control deÑciency impacted cost of sales and selling,administrative and other expenses in Visteon's consolidated statement of operations andpostretirement beneÑts other than pensions liability and stockholders' equity in Visteon'sconsolidated balance sheets for the respective periods. The impact of the correction ofthese errors was to increase the net loss by approximately $24 million, $32 million and$12 million for the Ñrst nine months of 2004, and the years ended December 31, 2003 and2002, respectively. These errors also impacted the disclosure of healthcare and lifeinsurance beneÑt expenses and liabilities included in Visteon's consolidated Ñnancialstatements for the respective periods. Additionally, this control deÑciency could result in amisstatement to the aforementioned accounts that would result in a material misstatementto annual or interim Ñnancial statements.

‚ Accounting for Costs Incurred for Tools Used in Production

As of March 31, 2004, Visteon did not maintain eÅective controls to ensure that there wasappropriate support and documentation of either ownership or an enforceable agreementfor reimbursement of expenditures at the time of the initial recording of incurred toolingcosts. Further, controls over periodic review, assessment and timely resolution of toolingcosts, related aged accounts receivable balances and potential overruns to customer-authorized reimbursement levels were not eÅective. This control deÑciency resulted in themisstatement of Visteon's consolidated Ñnancial statements for each of the years 2000through 2003 and the second and third quarters of 2004 because of costs that eithershould have been expensed as incurred or capitalized and amortized to expense over theterms of the related supply agreement.

The errors resulting from this control deÑciency impacted cost of sales in Visteon'sconsolidated statement of operations and accounts receivable, net property, andstockholders' equity in Visteon's consolidated balance sheets for the respective periods.The errors relating to 2001, 2002, 2003 and for the Ñrst nine months of 2004 werecorrected in connection with the restatement of Ñnancial statements for the respectiveperiods. The impact of the correction of these errors was to increase the net loss byapproximately $2 million, $10 million, $3 million, and $5 million for the Ñrst nine months of2004, and for the years ended December 31, 2003, 2002 and 2001, respectively.Additionally, this control deÑciency could result in a misstatement to the aforementionedaccounts that would result in a material misstatement to annual or interim Ñnancialstatements.

Management has formulated remediation plans and initiated actions designed to addresseach of the material weaknesses in internal control over Ñnancial reporting described above.

35

ITEM 4. CONTROLS AND PROCEDURES Ì (Continued)

Visteon's remediation plans include the implementation of additional monitoring and oversightcontrols to ensure that all necessary actions required to implement any future changes in theaccounting for the valuation of our employee postretirement health care liability accounts havebeen completed prior to recording such changes. These controls are expected to speciÑcallyinclude a focus on controls over communication and responsibility for actions requiring inter-departmental cooperation.

Further, Visteon's remediation plans include enhanced training for relevant personnel and thestrengthening of existing controls regarding determinations, and supporting documentation for,the valuation and rights and obligations relating to deferred costs for tools used in production.Additionally, Visteon plans to implement additional controls over the complete and timely reviewof these items and the associated accounts, including monthly reviews of aging of unbilled items.

The changes to internal control over Ñnancial reporting described above are in the processof being implemented beginning in the Ñrst quarter of 2005. Except as otherwise discussedbelow, there have been no changes in Visteon's internal control over Ñnancial reporting duringthe Ñscal quarter ended March 31, 2004 that has materially aÅected, or is reasonably likely tomaterially aÅect, Visteon's internal control over Ñnancial reporting.

In January 2003, we entered into a global IT outsourcing arrangement with IBM, whichprovides for, among other things, the transition of Visteon applications from Ford's IT systems,upon which we have relied since our spin-oÅ. The second major phase of this transition wasinitiated in April 2004, and includes the migration of the majority of our operating systems,including new business processes and IT systems utilized to record revenue and manage therelated accounts receivable associated with sales to our largest customer, Ford. The migration ofall remaining applications from Ford's IT systems is expected to be substantially completed in theremainder of 2004. This transition may aÅect Visteon's existing business processes includingVisteon's internal control over Ñnancial reporting. As this transition continues, it will be monitoredand evaluated with regard to Visteon's ability to process, record, summarize and report Ñnancialinformation.

Certain of Visteon's applications now reside within IBM's data centers and are run by IBM.IBM has conÑrmed to Visteon that it has maintained the security controls as previouslymaintained, and Visteon has observed the physical security and environmental controls of theprimary data center location. IBM contracts with an independent third party to perform reviews(""SAS 70 Type II'') of the control environment at its data centers, including physical security andenvironmental control; organization and administration; logical access controls; computeroperations; and problem and change management. In 2004, IBM will contract for additionalreviews of the control environment at its data centers, and we anticipate these reports will beavailable to Visteon, when issued, for our reliance with respect to these controls.

36

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in various legal proceedings, which are ordinary, routine proceedings,incidental to the conduct of our business. We do not believe that any legal proceedings to whichwe are a party will have a material adverse eÅect on our Ñnancial condition or results ofoperations, although such an outcome is possible.

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITYSECURITIES

The following table summarizes information relating to purchases made by or on behalf ofVisteon, or an aÇliated purchaser, of shares of our common stock during the Ñrst quarter of2004.

Issuer Purchases of Equity Securities

Total Number of Maximum Number (orShares (or Units) Approximate Dollar Value)

Average Purchased as of Shares (or Units) thatTotal Number of Price Paid Part of Publicly May Yet Be Purchased

Shares (or Units) per Share Announced Plans Under the Plans orPeriod Purchased(1) (or Unit) $ or Programs Programs

January 1, 2004 toJanuary 31, 2004 ÏÏÏÏÏÏÏ 230,000 11.3003 Ì N/A

February 1, 2004 toFebruary 29, 2004 ÏÏÏÏÏÏ 670,000 10.9800 Ì N/A

March 1, 2004 toMarch 31, 2004ÏÏÏÏÏÏÏÏÏ Ì Ì Ì N/A

TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 900,000 11.0618 Ì N/A

(1) All purchases were made in the open market pursuant to a program approved by the Boardof Directors on December 10, 2003, but not publicly announced, which authorized thepurchase of up to 3.5 million shares of Visteon common stock during Ñscal year 2004 to beused solely to satisfy obligations under the company's employee beneÑt programs.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Please refer to the Exhibit Index on Page 40.

(b) Reports on Form 8-K

The Registrant Ñled the following Current Report on Form 8-K during the quarter endedMarch 31, 2004:

Current Report on Form 8-K, dated January 8, 2004, in respect of Registrant's press releasedated January 8, 2004 related to a presentation to Ñnancial analysts and Registrant's Ñnancialoutlook.

Current Report on Form 8-K, dated January 16, 2004, in respect of Registrant's pressrelease dated January 16, 2004 announcing that its Board of Directors had declared a cashdividend.

37

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Ì (Continued)

Current Report on Form 8-K, dated January 23, 2004, in respect of Registrant's pressrelease dated January 23, 2004 announcing Registrant's Ñnancial results for fourth quarter andfull year 2003.

Current Report on Form 8-K, dated February 27, 2004, in respect of Registrant's pressrelease dated February 27, 2004 announcing the retirement of an executive oÇcer of Registrant.

Current Report on Form 8-K, dated March 1, 2004, in respect of Registrant's press releasedated March 1, 2004 announcing the commencement of a cash tender oÅer for up to$250,000,000 aggregate principal amount of Registrant's 7.95% Notes due 2005.

Current Report on Form 8-K, dated March 3, 2004, in respect of Registrant's press releasedated March 3, 2004 announcing the pricing of $450 million in aggregate principal amount ofRegistrant's notes due 2014.

Current Report on Form 8-K, dated March 3, 2004, in respect of the completion of a publicoÅering of $450 million in aggregate principal amount of Registrant's 7.00% Senior Notes due2014 on March 10, 2004 and a press release dated March 15, 2004 announcing the status ofcurrent tenders in connection with Registrant's oÅer to purchase a certain portion of our7.95% Notes due 2005.

Current Report on Form 8-K, dated March 31, 2004, in respect of Registrant's press releasedated March 31, 2004 relating to the pricing of the tender oÅer for up to $250 million aggregateprincipal amount of Registrant's 7.95% Notes due 2005, and Registrant's press release datedApril 1, 2004 relating to the appointment of an acting Chief Financial OÇcer.

38

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto duly authorized.

VISTEON CORPORATION

By: /s/ WILLIAM G. QUIGLEY III

William G. Quigley IIIVice President, Corporate Controller and

Chief Accounting OÇcer

Date: March 16, 2005

39

EXHIBIT INDEX

ExhibitNumber Exhibit Name

3.1 Amended and Restated CertiÑcate of Incorporation of Visteon Corporation (""Visteon'')is incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Qof Visteon dated July 24, 2000.

3.2 Amended and Restated By-laws of Visteon as in eÅect on the date hereof isincorporated herein by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q ofVisteon dated November 14, 2001.

4.1 Amended and Restated Indenture dated as of March 10, 2004 between Visteon andJ.P. Morgan Trust Company, as Trustee, is incorporated herein by reference toExhibit 4.01 to the Current Report on Form 8-K of Visteon dated March 3, 2004 (Ñledas of March 19, 2004).

4.2 Supplemental Indenture dated as of March 10, 2004 between Visteon and J.P. MorganTrust Company, as Trustee, is incorporated herein by reference to Exhibit 4.02 to theCurrent Report on Form 8-K of Visteon dated March 3, 2004 (Ñled as ofMarch 19, 2004).

4.3 Form of Common Stock CertiÑcate of Visteon is incorporated herein by reference toExhibit 4.1 to Amendment No. 1 to the Registration Statement on Form 10 of Visteondated May 19, 2000.

10.1 Master Transfer Agreement dated as of March 30, 2000 between Visteon and FordMotor Company (""Ford'') is incorporated herein by reference to Exhibit 10.2 to theRegistration Statement on Form S-1 of Visteon dated June 2, 2000(File No. 333-38388).

10.2 Purchase and Supply Agreement dated as of December 19, 2003 between Visteon andFord is incorporated herein by reference to Exhibit 10.2 to the Annual Report onForm 10-K of Visteon for the period ended December 31, 2003.‰

10.3 2003 Relationship Agreement dated December 19, 2003 between Visteon and Ford isincorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K ofVisteon for the period ended December 31, 2003.

10.4 Master Separation Agreement dated as of June 1, 2000 between Visteon and Ford isincorporated herein by reference to Exhibit 10.4 to Amendment No. 1 to theRegistration Statement on Form S-1 of Visteon dated June 6, 2000(File No. 333-38388).

10.5 Aftermarket Relationship Agreement dated as of January 1, 2000 between Visteon andthe Automotive Consumer Services Group of Ford is incorporated herein by referenceto Exhibit 10.5 to Amendment No. 1 to the Registration Statement on Form 10 ofVisteon dated May 19, 2000.

10.6 Amended and Restated Hourly Employee Assignment Agreement dated as ofApril 1, 2000, as amended and restated as of December 19, 2003, between Visteon andFord is incorporated herein by reference to Exhibit 10.6 to the Annual Report onForm 10-K of Visteon for the period ended December 31, 2003.

10.7 Amended and Restated Employee Transition Agreement dated as of April 1, 2000, asamended and restated as of December 19, 2003, between Visteon and Ford isincorporated herein by reference to Exhibit 10.7 to the Annual Report on Form 10-K ofVisteon for the period ended December 31, 2003.

10.8 Tax Sharing Agreement dated as of June 1, 2000 between Visteon and Ford isincorporated herein by reference to Exhibit 10.8 to the Registration Statement onForm S-1 of Visteon dated June 2, 2000 (File No. 333-38388).

10.9 Visteon Corporation 2000 Incentive Plan is incorporated herein by reference toAppendix E to the Proxy Statement of Visteon dated March 26, 2001.*

40


10.10 Form of Revised Change in Control Agreement is incorporated herein by reference toExhibit 10.10 to the Annual Report on Form 10-K of Visteon for the period endedDecember 31, 2000.*

10.10.1 Schedule identifying substantially identical agreements to Revised Change in ControlAgreement constituting Exhibit 10.10 hereto entered into by Visteon withMessrs. Pestillo, Johnston, Coulson, Orchard, Chatterjee and Marcin, and Ms. Fox inincorporated herein by reference to Exhibit 10.10.1 to the Annual Report on Form 10-Kof Visteon for the period ended December 31, 2003.*

10.11 Issuing and Paying Agency Agreement dated as of June 5, 2000 between Visteon andThe Chase Manhattan Bank is incorporated herein by reference to Exhibit 10.11 to theQuarterly Report on Form 10-Q of Visteon dated July 24, 2000.

10.12 Corporate Commercial Paper Ì Master Note dated June 1, 2000 is incorporated hereinby reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q of Visteon datedJuly 24, 2000.

10.13 Letter Loan Agreement dated as of June 12, 2000 from The Chase Manhattan Bank isincorporated herein by reference to Exhibit 10.13 to the Quarterly Report on Form 10-Qof Visteon dated July 24, 2000.

10.14 Visteon Corporation Deferred Compensation Plan for Non-Employee Directors, asamended, is incorporated herein by reference to Exhibit 10.14 to the Annual Report onForm 10-K of Visteon for the period ended December 31, 2003.*

10.15 Visteon Corporation Restricted Stock Plan for Non-Employee Directors, as amended, isincorporated herein by reference to Exhibit 10.15 to the Annual Report on Form 10-K ofVisteon for the period ended December 31, 2003.*

10.16 Visteon Corporation Deferred Compensation Plan, as amended, is incorporated hereinby reference to Exhibit 10.16 to the Annual Report on Form 10-K of Visteon for theperiod ended December 31, 2002.*

10.17 Visteon Corporation Savings Parity Plan is incorporated herein by reference toExhibit 10.17 to the Annual Report on Form 10-K of Visteon for the period endedDecember 31, 2002.*

10.18 Visteon Corporation Pension Parity Plan is incorporated herein by reference toExhibit 10.18 to the Annual Report on Form 10-K of Visteon for the period endedDecember 31, 2002.*

10.19 Visteon Corporation Supplemental Executive Retirement Plan is incorporated herein byreference to Exhibit 10.19 to the Annual Report on Form 10-K of Visteon for the periodended December 31, 2002.*

10.20 Executive Employment Agreement dated as of September 15, 2000 between Visteonand Michael F. Johnston is incorporated herein by reference to Exhibit 10.20 to theAnnual Report on Form 10-K for the period ended December 31, 2001.*

10.21 Service Agreement dated as of November 1, 2001 between Visteon InternationalBusiness Development, Inc., a wholly-owned subsidiary of Visteon, andDr. Heinz Pfannschmidt is incorporated herein by reference to Exhibit 10.21 to theAnnual Report on Form 10-K of Visteon for the period ended December 31, 2002.*

10.22 Visteon Corporation Executive Separation Allowance Plan is incorporated herein byreference to Exhibit 10.22 to the Annual Report on Form 10-K of Visteon for the periodended December 31, 2002.*

10.23 Trust Agreement dated as of February 7, 2003 between Visteon and The NorthernTrust Company establishing a grantor trust for purposes of paying amounts to certainexecutive oÇcers under the plans constituting Exhibits 10.14, 10.16, 10.17, 10.18, 10.19and 10.22 hereto is incorporated herein by reference to Exhibit 10.23 to the AnnualReport on Form 10-K of Visteon for the period ended December 31, 2002.*

41


10.24 Five-Year Revolving Loan Credit Agreement dated as of June 20, 2002 among Visteon,the several banks and other Ñnancial institutions or entities from time to time parties tothe agreement, JPMorgan Chase Bank, as administrative agent, and Bank of AmericaN.A., as syndication agent, is incorporated herein by reference to Exhibit 10.24 to theAnnual Report on Form 10-K of Visteon for the period ended December 31, 2002.

10.25 364-Day/1-Year Term-Out Credit Agreement dated as of June 19, 2003 among Visteon,the several banks and other Ñnancial institutions or entities from time to time parties tothe agreement, JPMorgan Chase Bank, as administrative agent, and Citibank N.A., assyndication agent, is incorporated herein by reference to Exhibit 10.25 to the QuarterlyReport on Form 10-Q of Visteon dated July 29, 2003.

10.25.1 First Amendment, dated as of February 27, 2004, to and under the 364-Day/1-YearTerm-Out Credit Agreement dated as of June 19, 2003 among Visteon, the severalbanks and other Ñnancial institutions or entities from time to time parties to theagreement, JPMorgan Chase Bank, as administrative agent, and Citibank N.A., assyndication agent, is incorporated herein by reference to Exhibit 10.25.1 to theQuarterly Report on Form 10-Q of Visteon dated May 3, 2004.

10.26 Five-Year Term Loan Credit Agreement dated as of June 25, 2002 among Visteon, theseveral banks and other Ñnancial institutions or entities from time to time parties to theagreement, JPMorgan Chase Bank, as administrative agent, and Bank of America N.A.,as syndication agent, is incorporated herein by reference to Exhibit 10.26 to the AnnualReport on Form 10-K of Visteon for the period ended December 31, 2002.

10.27 Pension Plan Agreement eÅective as of November 1, 2001 between Visteon HoldingsGmbH, a wholly-owned subsidiary of Visteon, and Dr. Heinz Pfannschmidt isincorporated herein by reference to Exhibit 10.27 to the Quarterly Report on Form 10-Qof Visteon dated May 7, 2003.*

10.28 Hourly Employee Conversion Agreement dated as of December 22, 2003 betweenVisteon and Ford is incorporated herein by reference to Exhibit 10.28 to the AnnualReport on Form 10-K of Visteon for the period ended December 31, 2003.

10.29 Employment Agreement eÅective as of January 1, 2004 between Visteon andDaniel R. Coulson is incorporated herein by reference to Exhibit 10.29 to the AnnualReport on Form 10-K of Visteon for the period ended December 31, 2003.*

12.1 Statement re: Computation of Ratios

15.1 Letter of PricewaterhouseCoopers LLP, Independent Registered Public AccountingFirm, dated March 16, 2005 relating to Financial Information.

31.1 Rule 13a-14(a) CertiÑcation of Chief Executive OÇcer dated March 16, 2005.

31.2 Rule 13a-14(a) CertiÑcation of acting Chief Financial OÇcer dated March 16, 2005.

32.1 Section 1350 CertiÑcation of Chief Executive OÇcer dated March 16, 2005.

32.2 Section 1350 CertiÑcation of acting Chief Financial OÇcer dated March 16, 2005.

‰ Portions of this exhibit have been redacted and are subject to a conÑdential treatment requestÑled with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2under the Securities Exchange Act of 1934, as amended. The redacted material was Ñledseparately with the Securities and Exchange Commission.

* Indicates that exhibit is a management contract or compensatory plan or arrangement.

In lieu of Ñling certain instruments with respect to long-term debt of the kind described inItem 601(b)(4) of Regulation S-K, Visteon agrees to furnish a copy of such instruments to theSecurities and Exchange Commission upon request.

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visteon 1q 2004 form 10-q a

Economy & Finance

chief executive

consolidated

consolidated

eliminated

chase manhattan

jpmorgan chase

intellectual

volume related