Robert R. Krakowiak - Vice President and Treasurer Timothy D. Leuliette - Chief Executive Officer, President and Director Jeffrey M. Stafeil - Chief Financial Officer and Executive Vice President.

Brian Arthur Johnson - Barclays Capital, Research Division Justin Barell Colin Langan - UBS Investment Bank, Research Division Ryan J. Brinkman - JP Morgan Chase & Co, Research Division Christopher Van Horn - FBR Capital Markets & Co., Research Division Kirk Ludtke - CRT Capital Group LLC, Research Division.

Good morning, and welcome to Visteon's First Quarter 2014 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. Before we begin this morning's conference call, I would like to remind you this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks factors and uncertainties that could cause our actual results to differ materially from those expressed within these statements. Please refer to the slide entitled Forward-Looking Information for further information.

Presentation materials for today's call were posted on Visteon's website this morning. Please visit www.visteon.com/earnings to download the material if you have not already done so. I would now like to introduce your host for today's conference call, Mr. Bob Krakowiak, Visteon's Vice President, Treasurer and Investor Relations. Mr.

Krakowiak, you may begin..

Thank you, Tiffany. Good morning, everyone. With us today are Tim Leuliette, Visteon's President and Chief Executive Officer; and Jeff Stafeil, Visteon's Executive Vice President and Chief Financial Officer. We appreciate your interest in our company and for taking the time to join us to review the first quarter of 2014.

We have scheduled the conference call for an hour and will open the lines for your questions after Tim and Jeff's commentary. As mentioned, the presentation materials associated with today's call are posted on visteon.com within the Investors section. Also note that our Form 10-Q was filed earlier this morning with the news release.

Again, thank you for joining us. And now, I will turn it over to Tim..

It's now the #2 automotive climate company in the world; it's 1 of only 2 full-line suppliers; customer-focused solutions; the IP is very well received around the world; innovative products and technologies; gaining share; a backlog that is growing; and again, a footprint in place to go and continue to increase its margins.

So there's been a lot of talk here about our focus on electronics and the expansion, because of the JCI dialogue. Let's not forget the impact, the performance and the growth and the value contribution that HVCC has had, has today and will have in the future.

And with that, let me turn it over to Jeff, and then he could go into more detail on the first quarter financials.

Jeff?.

Climate, Electronics and Interiors. I'll cover each of these in more detail in the following pages. Moving to Slide 22. We provide an overview of Climate sales and adjusted EBITDA for the first quarter of 2014 versus the prior year. Climate sales in Q1 2014 were $1,268,000,000, up $40 million, or 3%, compared with 2013.

The increase reflects higher volumes in Asia and Europe, as well as the launch of new Hyundai business in Asia and new business in North America and Europe, partially offset by ordinary customer pricing reductions.

Currency had a negligible net impact year-over-year, as the positive impact of a stronger Korean won and euro offset the negative impact of a weaker Indian rupee, Argentine peso and Russian ruble. Adjusted EBITDA for the first quarter of 2014 was $117 million, down $8 million compared to the first quarter of 2013.

As mentioned earlier, currency lowered adjusted EBITDA by $18 million on a year-over-year basis, while increased production volume and positive business equation were partial offsets. Climate's adjusted EBITDA margin was 9.2% in the first quarter.

On a constant currency basis, Climate adjusted EBITDA margin would've increased to 10.2%, or 50 basis points higher than the first quarter of 2013. Moving to Slide 23. Electronics sales for the first quarter of 2014 were $439 million, and adjusted EBITDA was $57 million. Sales for the quarter increased $74 million versus 2013.

The increase was more than explained by the consolidation of YFVE. Adjusted EBITDA for the first quarter increased $31 million versus 2013, almost entirely explained by YFVE. First quarter 2014 adjusted EBITDA margin was 13%.

While we adjust -- while we anticipate that YFVE will help lift our historical margins in this business, it is important to note the Electronics adjusted EBITDA in the first quarter included approximately $10 million of favorable impacts relating to the timing of commercial settlements and prototype recoveries.

The timing of these items can be uneven throughout the year, and in 2014, we recognized a disproportionate amount in the first quarter. Turning to Slide 24. Interiors sales in the first quarter were $303 million, and adjusted EBITDA was $9 million.

Sales decreased versus the first quarter of 2013 by $14 million, primarily due to lower production volumes in South America. Adjusted EBITDA increased by $13 million versus the first quarter of 2013, reflecting favorable mix and a $10 million increase related to positive business equation.

The positive business equation includes restructuring savings from the actions we took last year. As previously discussed, we continue to operate and implement improvement actions in the Interiors business, while supporting and investing in it, with a target to complete the divestiture of the business this year. Turning to Slide 25.

I will provide a breakdown of the key components of our 2013 and 2014 tax provision and cash tax payments. Our first quarter 2014 income tax provision was $35 million, primarily reflecting operating taxes in profitable countries and accruals of withholding taxes related to the current earnings from consolidated and nonconsolidated affiliates.

The 2014 tax expense is broadly in line with last year, once you exclude the favorable $54 million tax contingency benefit from 2013. Moving to the right-hand side of the page, we show our cash tax payments. In the first quarter of 2014, cash taxes were $25 million, primarily related to operating taxes in profitable countries.

For the full year 2014, we estimate the midpoint of our tax expense and cash taxes to be $135 million and $170 million, respectively. Turning to Slide 26, we take a look at our cash flow and our capital structure. Free cash flow was $44 million in the first quarter, versus $59 million last year.

Adjusted free cash flow, which excludes restructuring and transaction-related payments, was $64 million versus $95 million last year. Adjusted free cash flow decreased by $31 million year-over-year, primarily reflecting lower trade working capital.

Trade working capital in Q1 2013 benefited from approximately $40 million more in calendar-driven payment delays from the end of March to the beginning of April, and $16 million in Asian customer term changes. Cash balances were $1.75 billion as of March 31, 2014, up $758 million since the first quarter of 2013.

The improvement is primarily attributable to proceeds from the YFV transaction in December of 2013 and positive free cash flow, but was partially offset by cash used to repurchase Visteon stock and report -- pay a portion of our corporate bonds.

In April, Visteon closed on a new $600 million 7-year delayed draw Term Loan B and a $200 million 5-year cash flow revolver. The term loan interest rate is LIBOR plus 275, with a 75-basis-point LIBOR floor. Proceeds from this facility will be used to repay our existing $400 million, 6.75% bond and finance the JCI transaction.

In connection with this new facility, Visteon terminated the existing $130 million asset-based revolver. Moving to Slide 27.

And as Tim briefly mentioned earlier, today, Visteon announced that it has entered into an agreement with a third-party financial institution to repurchase $500 million of its common shares under an accelerated stock buyback program.

The program is a 10b5-1 plan, which will be administered by the agent and not subject to Visteon blackout criteria once initiated. The program has a maximum maturity of approximately 12 months, and 50% of the repurchase is capped at a maximum per share amount.

About 80% of the shares are expected to be received by the end of May, with 62.5% of the shares to be delivered at the inception of the ASB. $375 million remains available under our current authorized share repurchase program. Moving to Slide 28, we provide our 2014 full year financial guidance.

As Tim stated, we are reaffirming our full year guidance for our key financial metrics. For the full year, we project the midpoint of sales to be $7.8 billion; adjusted EBITDA, $680 million; adjusted free cash flow, $125 million; and adjusted EPS of $2.65 per share.

Note that we have reduced our interest payment guidance by $5 million, reflecting lower interest rates in our new term loan facility. Now let me turn it back to Bob for Q&A..

Thank you, Tim and Jeff. Tiffany, please open the phone line for questions..

[Operator Instructions] Your first question comes from the line of Brian Johnson with Barclays..

[indiscernible] but I want to kind of more focus on the revenue side. In the Electronics business, it was flat, excluding the consolidation.

Can you give us, underneath that, some sense of the interplay between global production growth, roll-on of new contracts, roll-off of old contracts, the impact of body electronics, if there's any there, and then just how do you see that revenue growth changing on an organic basis once you start integrating, a, before you integrate in JCI, then after the JCI integration?.

Brian, there's lots of good questions in there. As it relates to 2014 in general, if you recall, we had said we were giving our guidance way back when -- that Electronics, 2014 was a bit of a soft year. There's a lot of transition, there's a lot of, let's say, turnover on some of the customer programs.

And 2015 was going to be a much larger sales increase year. That being said, the first quarter definitely had some weakness in it from, particularly South America and Europe, on our programs in Electronics. As you look forward to the balance of this year, we do expect some uplift versus last year in just the core Electronics business.

But the real growth will really kick in, in 2015 on that area..

We were comfortable with the long-term CAGR. But as we said, I think, back in January, there is annual dynamics to that CAGR, and '14 was not one of the stronger years of the cycle; '13 was a good year for us, '15 is going to be a good year for us..

Okay. And then -- I was just going add in to the last part, or at least address it. Once we bring in -- once we close in the JCI acquisition, we'll give you guidance and give you a better look at what we look like combined. So I think you asked the question about what we look like, which is....

Yes, so you can't really talk about what their backlog's looking at until you actually, I guess, bring it underneath your legal ownership?.

Correct..

Correct..

Correct. But I think....

So I guess -- go ahead, Tim. Sorry..

So I was just saying, Brian, is that we clearly are very comfortable with the long-term direction of this business, intermediate to long term, both strong. Order book is good. So there is -- as Jeff said, South America was a little weak, Europe had some soft spots.

But one quarter is -- we're seeing some of those alleviate themselves, especially the European side, as we go forward for the rest of the year..

Okay.

And in those soft spots, are they just model-specific, production-specific? Or is it anything to do with take rates bearing on the stuff that you have in their cars?.

Some of them are markets, generic market issue, of just soft market, in South America in particular..

And on some of the vehicle programs we're on. But as we look forward to releases, we do see a little bit of improvement in the next few quarters..

Okay. And I guess, just final question, sort of mid- to longer-term growth.

Your OpenSynergy and some of the other relationships that have come on since Marty joined you, can you give us maybe an update on those? I mean, we know the broad outlines of those, but more particularly, in terms of maybe it's too early for backlog, but either customer discussions or quoting activity around those..

Both Autonet and OpenSynergy are now engaged components of our product portfolio offerings as we go to the marketplace. Marty is now in Europe. We have major customer program -- presentations.

Basically, if you will, the Electronics piece that you saw in the New York Investor Day has been now shipped to Europe, and we're taking key customers through that, and then obviously, also expanding some of the connected car opportunities.

And also to support that, Marty and I spent a week in Silicon Valley, 3 weeks ago now, meeting with some of our already, current investors looking -- excuse me, at our current invested companies, companies we've invested in already, as well as some potential additional ones as we expand that connected car footprint, and we met with some key customers out there.

So I see a lot of traction. I think we've had probably more intensity with customers over the last 60 days than we've had in a long time. As the vision of JCI's combination with us, together as a combined larger entity, and the broad definition of what connected car is going to mean to us, has resonated with the OEMs.

There is nobody here that is a logical consolidator in this place. It's going to be, as we've said before, suppliers taking pieces that make sense for them, and the cockpit ecosystem is one that clearly makes for us.

We had one of the senior analysts out in the West Coast come back and said, "You know, no matter who we talk to, no matter if the information is leaving the car or coming into the car, it has to go through you at Visteon." So I said, "We see Visteon as being kind of a critical node in this connected car expansion that's going on." As you know, as we've talked about our guidance and our vision and our revenue targets, we said the connected car was icing on a cake.

The cake to us is quite strong. The cake looks quite good. The issue of the growth in cockpit ecosystems by itself is a very strong and attractive market for us. But we're seeing the underpinnings of this other stuff start to work its way into discussion and dialogue.

So we will update kind of that vision and that story once we can talk more publicly about the JCI acquisition, but we're feeling fairly comfortable about what the story is and how it's being received..

Your next question comes from the line of Itay Michaeli with Citi..

This is actually Justin Barell on behalf of Itay. Just hoping to get some incremental color with regards to the Interiors net book loss of $250 million to $300 million.

Is that kind of the stub revenue that you guys are believing would be kind of divested post year, relative to 2013? Or how should we think about that?.

It's primarily the writing off the net asset value of the business..

Got you. And then just on Climate. For the $350 million of incremental net wins, what's the time span for that period? How should we think about that? I know that there's some upside, it looks like, to '16.

Is that kind of a 3-year award out from there? Or what's the cadence of that?.

You're going back and looking at....

I would -- yes, I would still say, Justin, the guidance we gave and how we balance -- I'm going to get the Deutsche Bank presentation back in January. We gave you sort of a 3-year look at what revenue and the backlog stacked up to be. That's probably still the best one to do.

We can obviously influence a little bit on 2016 with some of the awards we win in the first part of 2014, and that's what you see reflected on that Page 13..

Page 13, the upper right-hand corner..

Yes, but for the most part, the Deutsche Bank guidance would probably still be the operative ones for the out years..

Okay, got you.

And then for Electronics in the YFVE, how should we kind of think about the revenue CAGR and margins on that kind of business on a go-forward basis?.

Yes, well, as I mentioned, the first quarter -- there's a couple of timing events that certainly benefited it. I don't think I think of 13% margin as a go-forward, at least, right away. We'll obviously work to improve the margins over time. The -- that business is a strong business.

It will definitely lift our overall Electronics margins, and you've seen that really in the last couple of quarters here. And the bulk of -- there's definitely growth in this business in 2014. You'll see more growth in 2015 and 2016..

Perfect. And then....

We also gave guidance back in the Deutsche conference about the growth in the Electronics business as well, so I think we're comfortable with that..

Okay, perfect. And then just one last final follow-up question.

I believe you mentioned earlier on the call, the ASB something with May 13, did I hear that correctly or...?.

That's correct. That's when the blackout period ends because of the quarterly earnings date..

Your next question comes from the line of Colin Langan with UBS..

[indiscernible] will get moved into discontinued operations? And also, I believe....

Colin, you were -- you kind of, at least, came onto our line, sort of mid-sentence.

Maybe you can start again?.

Sure, sorry. Any color on when Interiors will get moved into discontinued operations? And also, I think in prior presentations, you had said that Interiors was about a $0.45 earnings headwind for this year.

Is that still the accurate number when we're looking at that, when that comes out, in terms of moving to discontinued op?.

Yes, your question on the movement time, we'll put at least the majority of the Interiors business in discontinued operations in the second quarter. And the guidance for that $0.45 were certainly for all 3 parts of our Interiors operation for 2014, but it's still the operative number. I'd still use that number for your model..

But today's guidance hasn't been updated for....

Correct. It's early in the year, I guess, first. Second is, we know we're going to need to re-update guidance when we complete and close on the JCI transaction. And at that point, we'll reflect the Interiors as well..

Okay, that makes sense. And any -- can you just make sure I understand the ASR.

I mean, when you said 80% upfront, is that the $500 million at the current stock price? Or is that based on 80% of the anticipated buyback price?.

Yes, essentially, the current stock price is what we're thinking. $400 million of shares, give or take, on the current price we're expecting by the end of May to have deliveries. It will depend a bit on share price movements between now and then, but that's what we expect..

Okay, that's very helpful. And you mentioned -- you talked a lot about the currency issues. And it did actually look like, from the U.S. to won, actually it didn't seem to move too much within the quarter. So what were the major won issues? And then, it actually seems to have moved a lot after the quarter.

So is that something that's going to be a worse of a headwind as we go forward?.

Yes, Colin, a couple of things there. One of the -- the biggest portion, we said it was $18 million year-over-year difference. $12 million of that was the revaluation of just all your working capital accounts effectively at the end of the period. And if you -- so that portion of that, I don't think will have as big of an impact in the rest of the year.

The operating exchange certainly will move around the currency. And in particular, if you think about our HVCC operation, there's a lot of common supplies and some parts -- some subassemblies that we make in Korea and then ship to our locations in, let's say, India or Russia or Thailand or other spots around the world.

So it's not just the won to the dollar. It's effectively the won to all those other currencies, where in India, you're getting paid in rupee and you're having some portion of your cost base that is still in won, and that's what that reflects.

I do think that the first quarter was abnormally large of an impact, from at least what we expect, even with the current exchange rates as of today. But certainly, with the won down about under a 1030, it certainly is not a helpful element for us. But I don't expect the same level of impact that we saw in the first quarter..

Okay. And just one last question. Any update on your strategic thoughts within Climate? You've mentioned in the past you'd be a consolidator and you've also thrown out the idea of maybe increasing your stake in Halla and set up for a potential tax-free spinoff.

Are those things that you're still considering? Any color on the market outlook for those type of transactions?.

Yes, I don't think we want to add any more to what we said in the past, other than to say that we fully understand, fully expect that we're going to need to address the balance sheet at HVCC in one form or another, as it's underlevered.

As we've said earlier, the amount of cash we have currently and the magnitude of the stock buyback made it inappropriate for us to go throw a lot more cash in our balance sheet right now that we couldn't put to work quickly, whether we wanted to lever up or whatever we want to do.

I think we're proud and pleased, I should say, with the forecast of HVCC. If there are some opportunities to do some acquisitions that are both strategic and economically viable, we clearly would be interested in doing so.

So I think at this point, just from a sheer workload and focus perspective, and just from a management perspective, let's get us through this JCI consolidation and then we can start talking more about HVCC later in the year..

Your next question comes from the line of Ryan Brinkman with JPMorgan..

I understand that your full year guidance is unchanged and I know you don't guide the quarter, but as we look across our auto parts coverage, every company that does guide to the quarter generally beat their guidance in 1Q.

So I'm curious if maybe you can just share how you performed relative to your own expectations in the quarter? And then maybe if you did do a little bit better, while it might not be prudent to raise full year guidance at this stage, whether there could in fact be some sort of upward pressure on the full year after the strong 1Q?.

I would say that we're pleased with the quarter. But the reason why we typically don't want to address, especially now, is no matter what we do this quarter, we got to change it next quarter, just because of the action items of the transaction. So we're not continuing to move the number here.

We're comfortable with the quarter, we're comfortable with our guidance.

Pleased with the quarter, but let us get the other transactions to the point where we can embed them into our revised guidance, and then we can talk about all the aspects, which is the impact of the revisions and how we see this quarter and other quarters impacting any need to revise the absolute guidance.

It's just an issue of not just jerking you guys around each quarter with changes in numbers, because we know it's coming..

Okay. Yes, that's certainly fair. And then a follow-up to sort of Colin's question on Climate M&A. And I sort of -- I guess it sort of relates to your response there, that there's a lot of balls in the air relative to M&A right now, let's kind of get past those.

But how do you get past those? According to pie charts that you've shown, there's quite a bit of distance between you and the #3 competitor in HVAC, but also quite a lot of distance between you and the #1 competitor.

You've got pretty much all the best technology, right? I think you've mentioned some compressor technology in the past being interesting.

But what would getting bigger benefit you at this stage? Is it like customer diversification, geographic diversification? If you were to go from like, 13% of HVAC market to 20%, does that scale? Potentially, is that somehow a game-changer in profitability?.

I think, always, when you can leverage your fixed cost, your overhead in the engineering side by adding customers, it's good. We, as you know, have sought to get better customer diversity for HVCC, and that is one of the goals.

I will say that -- the other thing I've mentioned in the past was that we have to look at the management team itself and say, look at the -- just organic growth and the opportunities that exist there. And you saw the facility launches that are existing on that one chart in the deck.

You combine that with the opportunities you see in the marketplace, the question becomes, "Do we achieve our goals with organic growth and the investment of capital to business platforms that are quite attractive when we see some share opportunities with just the market coming to us, or do we have to go buy something to step functionally change that situation?" And right now, it's a high-class problem, but it's still a problem.

We're going to be looking at those options. We're very pleased with the customer reaction to some of the new technologies. And I think I've spoken in the past about the European legislative issues and how that's impacting us. So we're seeing a lot of organic opportunity.

And this is going to be not driven by financial resources because we've got -- clearly, the financial resources to do what we want to do. The question is going to be, what is the pace of the cadence for which we can launch and expand the business in a comfortable manner? That's kind of the issue on the table.

But as I said, we've got some time to assess that, and I would suspect that we'll be talking more about HVCC later in the year as we make some decisions on that front..

Okay, that's very helpful. And just very last question from me, on the $125 million in 2014, the free cash flow guidance.

I'm curious if -- I think this would be helpful for us as we look out to the next year, if you could sort of talk about what that guidance would be, if not for Interiors, just because I think Interiors is probably a disproportionate, I'm guessing, user of your cash restructuring this year..

Yes. We will -- certainly, this year is going to have a lot of noise in it, Ryan, as we're acquiring a business, we're selling some businesses in Interiors. Next year, we'll certainly have a -- we gave a guidance on that or sort of a farther-out vision in 2017, I think, at Deutsche Bank, of what we look like there.

We'll come out and start to give better views of what we look like without Interiors. But the first real clean year from cash flow or much cleaner year, will be 2015. But we'll try to steer you -- we'll take that guidance and we'll try to steer you a little bit more of what Interiors' impact is to us in the future..

Not to sort of get things ahead of ourselves here, but I think that the January Deutsche Conference 2015 is going to be an interesting conference for all of us, because that'll be the first time you will see this new Visteon clean for a year, all the dynamics of the transactions and what have you, transitions behind us.

And looking at the Halla Visteon Climate piece stable -- it already is, but now, the Visteon Electronics piece with JCI, the combined order books and the synergy impacts, where you'll see really that footprint of that new Visteon. And we're looking forward to that conference..

Your next question comes from the line of Chris Van Horn with FBR Capital Markets..

Just a couple of questions on the pipeline, if you will. Is there any specific products or programs that really stand out for you guys, both in Climate and Electronics? And then on the $350 million in new wins, was that driven by a few customers, one customer or product line? If you could just give a little more detail around that, that'd be great..

There's no one single program that is the bulk or magnitude of that growth. It is across the board, and it comes in really 3 buckets. One, we're seeing content increases on existing customers, just because of the nature of the technology adding features and adding content, or bringing technologies that didn't exist.

But we're also seeing an expanded footprint in both Europe and Japan, because of new customers. And then, I would say, in the latter part there, there's -- we're seeing traditional customers for which their products are moving more upmarket.

You're seeing added, not technology content, but if you will, but just traditional content increase on new products in India and some of the more emerging markets, because those vehicles are maturing. So all of that is combining with that sale.

We have targeted some nontraditional customers of ours for which we anticipate some, perhaps, expansion there, but none of that is in that business, that's been stated as of yet. But this is primarily Europe and Japan driven more than anything else..

Okay, great.

And then assuming the JCI, Visteon combination, will there be kind of a development pipeline coming out of that combination? And what -- or will it be kind of enhancements to existing products? How do you kind of visualize that playing out?.

Well, 2 things. One, we're bringing platforms to the market, they're bringing platforms to the market, for the most part over the next 24 to 36 months. Those things are in process. What we're trying to do very quickly is to combine activities. A case in point, we were not a major player in heads-up displays; they are.

So therefore, we're going to quickly utilize their heads-up display as our product array in that space, use that as an example. So we'll quickly integrate that into ours and eliminate our initiative and utilize theirs.

There are some other subsegments along that line that work both ways, where they'll eliminate an initiative because we already have it or vice versa.

The platforms that we launched in the Consumer Electronics Show, that are the OpenAir for our infotainment package and the LightScape for the programmable clusters, will be the primary platforms going forward that we will lead with in the post-'17 timeframe. Variants of that and different variants of those.

And that will be -- both companies will be utilizing those platforms for their new product offerings.

So the synergies that come quickly are more the efficiencies in the engineering side, because with the growth that we're seeing, we would otherwise be in the market for engineering that we don't need to be in because we now have got a combined engineering workforce that we'll utilize more efficiency -- efficiently.

There'll be some manufacturing synergies that come onboard, but that'll take approximately a year as we consolidate where we need to be. Not a lot of that, but some of that. And of course, there's obviously immediately some SG&A synergies because we're now bringing the overhead that the company had before as part of JCI. So that's the early pop.

The product technology and capabilities will be combined fairly quickly, but those will impact only those programs we're quoting for the future..

Your final question comes from the line of Kirk Ludtke with CRT Capital Group..

I just had a couple of quick follow-ups on Interiors and Slide 5 in particular.

Could you expand a little bit on what has to happen between here and closing? And do you need any approvals, are your customers onboard, et cetera? And then also maybe expand on the financing that needs to be raised, and particularly, the seller -- the potential for a seller -- some type of seller financing here?.

Yes, let me start with the last one. We -- it's important to us, Kirk, to make sure this business is going to be well-capitalized as it left us. And I think as we worked with the Cerberus team, we found a transaction that met everyone's interest and did provide comfort.

What -- specifically, what we agreed to on that financing is that they would have $90 million of financing available at close, primarily from things like factoring. And if you think about it today, there's already a factoring arrangement in France for that business who can expand that.

To the degree we weren't able to get to sort of what we had as a target level, which we had as $90 million, Visteon would give them sort of a last-use revolver liquidity for the difference. So if we raised $75 million, we would give them $15 million of a revolver to be used after essentially the other stuff was used -- drawn.

And we would be repaid before those things were repaid effectively..

Okay. That's helpful..

Yes. And I mean, our anticipation is to very much minimize that amount to the degree that there's anything on it at close.

As far as things that need to happen, I'd say your regulator -- regular approvals, customary approvals, and we'll say, the timing is primarily putting this thing in, let's say, late Q3, early Q4, is primarily due to some carve-outs and some other things we need to do from a legal entity standpoint between now and then..

Interesting, I appreciate it. And then it's -- I thought maybe these plants would go back to your customers. It's really interesting to see private equity getting involved in the space again.

Do you have any thoughts on the interest that you got in the business that you could share with us?.

I would say this, that the private equity interest was greater, obviously, the last year than it was 2 years ago. I think there is an understanding in the segment that there's some consolidation necessary. There'll be some catalyst for that consolidation. Private equity typically plays a role as a catalyst for that type of action.

And I think now, given where we think where we see Europe as being, not necessarily recovering significantly, but not getting worse, so therefore there's a planning horizon that you can sort of have some comfort in.

You're starting to see more action there, and I think that's why we took our time and paced this, to put together what we believe was the right answer, not only from a Visteon perspective, but from these assets going forward. This is a good business in the right hands combined with other assets, because it's got some good IP.

It's just not sufficient critical mass for us, nor is it a core segment for us, but it is for someone, and this company is going to leave with a damn good balance sheet and capability to compete. And this story is not over. We see this continuing, and a consolidation of that space occurring because the timing's right.

And as they always say, timing is everything. But we see timing as being right in the segment now for consolidation..

Thanks, Kirk, and thanks everyone for all of your questions. And with that, I'd like to thank everyone for your participation in the call and for your time and interest in Visteon. I'd like to turn it over to Tim for his final comments..

Well, thank you, Bob. And again, I want to thank all of you for your support and interest in the company over this, the timeframe.

I think this quarter is an interesting quarter for us, because it's not just an economic event for us to post earnings and to achieve certain targets, but it also -- the structural elements that occurred this quarter are critical to us going forward. So again, we were pleased with the quarter, we look forward to the rest of the year.

And as the year progresses, we will obviously keep you updated and quickly as to the closing of JCI, the integration of that, how it impacts our guidance, and as we said, rolling Interiors off into disc op. So again, thank you all. We appreciate your interest in the company, and we'll talk to you again next quarter. Thank you..

This concludes today's conference call. You may now disconnect..