Bob Krakowiak - Vice President and Treasurer Sachin Lawande - Chief Executive Officer, President and Director Jeff Stafeil - Chief Financial Officer and Executive Vice President.

Colin Langan - UBS Brendon Mason - SIG Brian Johnson - Barclays Ryan Brinkman - JP Morgan Itay Michaeli - Citi.

Good morning, I’m Bob Krakowiak, Vice President and Treasurer, Investor Relations for Visteon. Welcome to our Second Quarter 2015 Earnings Call. All lines have been placed on a listen only mode to prevent background noise. As a reminder, this conference is being recorded.

Before we begin this morning's 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 factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in 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 Web site this morning. Please visit www.visteon.com to download the material if you have not already done so. Joining us today are Sachin Lawande, President and Chief Executive Officer; and Jeff Stafeil, Executive Vice President and Chief Financial Officer.

We appreciate your interest in our company, and thank you for joining us to review second quarter 2015 results. We have scheduled the meeting for an hour, and we'll open the lines for your questions after Sachin and Jeff's remarks. Please limit your questions to one question and one follow-up.

As previously mentioned, a presentation associated with today's call is 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 Sachin..

Thanks, Bob and good morning everyone. Welcome to our call. It’s a pleasure for me to be leading my first earnings call as Visteon’s CEO. I’m very pleased to be here. A little later in the presentation I’ll share some of my early impressions of Visteon as well as my initial thoughts on where I see the company going in the future.

First, let’s review the second quarter results starting on page 2. I’ll cover the highlights and Jeff will provide more details shortly. This was a strong quarter for Visteon capping off a strong first half of 2015. Sales were $812 million for the quarter and 1.63 billion for the first half of the year.

Adjusted EBITDA was $60 million for the second quarter and $138 million through the first half. Free cash flow for the first six months was $172 million. The company has a very strong balance sheet with cash of $2.866 billion and debt of $378 million. We also had some noteworthy actions in the second quarter.

On June 9, we completed the sale of our ownership interest in HVCC to Hahn and Company and Hankook Tire. That was announced a day before the company appointed me as President and CEO, which took effect on June 29. Also in June, we initiated $500 million accelerated share buyback that will be completed by the end of the year.

We’re reaffirming our full year guidance for our core electronics business incorporate. However, based on the strength of our first half results we’ve be believe we’ll be at the high end of a range for both adjusted EBITDA and adjusted free cash flow.

As shown at the bottom of this slide, our range for adjusted EBITDA is 245 million to 265 million and the range for adjusted free cash flow is $40 million to $80 million. Turning to page 3, on June 9 as I mentioned earlier, we completed the sale of our 70% ownership interest in HVCC to Hahn and company and Hankook Tire.

The transaction was valued at approximately $3.6 billion equivalent to a multiple of over 10 times EBITDA for the 12 months ended September 20, 2014. As previously disclosed, we plan to use the proceeds to return cash to shareholders via series of actions including buybacks and special distributions which I’ll review in the next slide.

This was a significant transaction for our shareholders and employees as we continue to transition into a pure play electronic or/and cockpit focused company. I command everyone at Visteon who was involved in completing the sale. HVCC is a leader in automotive thermal management and we wish everyone at HVCC continued success.

For Visteon the sale of our climate business solidifies our focus on vehicle cockpit electronics and the connected car. We’re excited to be in a position where we can concentrate our resources, our technology and our strategy on the space. This is one of the fastest growing segments in the automotive industry.

On page 4, we provide more detail on our use of the proceeds from the HVCC sale. As mentioned we’re returning between 2.5 and 2.75 billion of cash to our shareholders over the next 12 months through both buybacks and special distributions.

The first action involved a $500 million buyback in the form of an accelerated share repurchase program that was executed in the second quarter. We expect to complete this buyback no later than December 31 of this year.

The reminder of the capital return program is expected to include an action or series of actions that will be determined based on the final results of our E&P analysis, the IRS Section 382 calculation and Visteon’s future share price.

Our remaining return of capital program could include additional share repurchases a special dividend or a combination of the two. We expect that less than 250 million of a special distribution will be treated as a qualified dividend for US tax purposes.

As the new CEO of Visteon, I feel it is important for you to hear from me directly that we continue to be committed to this return of capital as previously announced and we plan to complete our program by the middle of next year. Now, let’s take a look at Visteon going forward.

Looking at page 6, in my first month at Visteon, I’ve visited several sites in Europe and Asia and met with key customers to get a firsthand feel for the company and start the process of developing a strategic plan for the business. I’ve planned to give you a more in depth report in November, but I’ll share some early observations with you today.

I’m pleased to say that what I’ve seen and learned has exceeded my expectations. Let me share some of my initial impressions. First, Visteon has a broad product portfolio that’s well positioned to meet the requirements of the connected car across all segments of the market.

The product portfolio includes instrument clusters, information displays Head-Up displays, infotainment and telematics. Very few companies can match this breadth of product and importantly all these products are in the sweet spot of the growth segment of the industry.

The second observation is that despite the changes that have occurred in the past few years, Visteon still has a strong technology core and innovation drive. The company has excellent engineering talent and a best in class global footprint to scale fast and cost effectively.

Third, I see further opportunity to enhance margins in the near term by making our cost structure more efficient. The team at Visteon has done a good job of integrating JCIs electronics business and our really realized synergies that are inherent in our financial performance this year.

The fourth key observation is that Visteon is positioned very well in China with joint ventures with the four largest domestic car manufacturers. Despite the recent concerns regarding China, it is still the largest automotive market in the world and Visteon has a major competitive advantage with these joint ventures.

And finally, Visteon has a broad customer base with 10 out of the top 15 OEMs as customers. It offers us an excellent platform to grow the business at a rate that is faster than the underlying market growth. We’re working diligently to develop a strategic plan that capitalizes on these opportunities.

We currently expect to present that plan in about 90 days at an auto conference in November. I mentioned Visteon’s attractive product portfolio. I’ve observed that our portfolio contains several underlying value creation opportunities.

These include several technology jewels [ph] where Visteon is extremely well positioned to take advantage of growth trends and to seize leadership in the automotive market with proper investment and planning. On the next few slides, I’ll outline what I see as some of the most compelling opportunities to drive shareholder value.

Let’s start by looking at instrument clusters on page 7. On this and subsequent slides we’re showing the growth projections for each particular product, key future trends and a few examples of recent key Visteon wins in these areas.

Visteon is a global leader in instrument clusters and the strong number three player in the $7.5 billion global market with a projected annual growth rate approaching 10% through 2020. The industry is transitioning to larger TFT display technology and fully reconfigurable displays.

This is important as with the connected car the information to be displayed will change overtime as new features like VCX become more matured. The instrument cluster also needs to be an upgradable over-the-air, another key trend that’s emerging, the integration of multiple functions into the instrument cluster to reduce visual distraction.

Visteon already has significant experience and expertise in digital displays and graphics processing. With its unique and industry leading SmartCore technology that I’ll discuss a few slides later, Visteon is well ahead of the competitors in multi domain integration that’s key to enabling integration of multiple functions into the instrument cluster.

Visteon is already delivering instrument cluster solutions across all market segments. As shown in the upper right, Visteon has won several key instrument cluster programs over the past year.

These include a cluster for a high volume 2018, 2019 model year North American mid-size platform is expected to generate $155 million in revenue over the life of the program as well as other programs with Europe, Asia and North America based vehicle manufacturers slated for launch in the 2017 to 2019 timeframe.

In summary, Visteon’s expertise in graphics and displays along with its next generation domain integration technology, positions the company extremely well for success in this growing market. Turning to page 8, we take a look at Head-Up Displays.

As you can see from the chart in the upper left, this category is expected to grow at an explosive rate with an estimated CAGR of nearly 34% through 2020.

As with the digital multifunction instrument clusters, Head-Up displays are critical to reduce visual distraction as otherwise the drive has to shift their gears frequently from the road ahead to the center information display. There are two kinds of Head-Up displays, the windscreen Head-Up display and the combiner Head-Up display.

Windscreen Head-Up displays are expensive as they require really tight tolerances in the manufacture of the windscreen. They also require more space or volume in the dash of the car. Combiner HUDs are much more cost effective and require less space. Visteon virtually invented the OEM combiner HUD category by launching the first system with PSA in 2009.

Since then Visteon has been a leader in this category and has own several HUD programs including one for a 2017 mid-size sports care with an Asia based manufacturer and another for a 2018 luxury mid-size platform also with an Asian automaker. In the future, the combiner HUD will represent close to half of the HUD market by value.

Although much more by volume, future HUD products will be characterized by full color, large image size and high resolution. We’re beginning to see the introduction of what meant in reality features in Head-Up displays and this trend will only continue.

The Head-Up market is still in its early stages, but we’re already seeing a lot of interest from OEMs across all regions. I expect to see more significant customer new business awards in the very near future given that Visteon is one of the few players actually capable of capitalizing on this tremendous growth prospects.

Moving to slide 9, displays our another category that’s experiencing dynamic growth in which Visteon is very well positioned. Visteon is the global market share leader with 25% of the share.

Visteon has been successful in this product category because of our ability to bring solutions to automotive specific problems with displays such as fingerprint rejection, anti-glare coating, and optical bonding.

It should be noted that these are not significant concerns for consumer display manufacturers, but has significant implications on displayed ability and user experience in automotive. We have some of the most advanced display manufacturing capability amongst all Tier 1 suppliers that can offer latest solutions for these automotive specific problems.

By 2020, it is projected that the industry will produce more than 20 million vehicles with optically bonded displays. Visteon’s focus on improving the quality and user experience of automotive displays is paying off.

We have won several new business wins in displays ranging from a 2016 compact car for an Asian manufacturer to a 2018 model year premium carline for a European OEM. The display sizes continue to grow from the most common eight inches today to 10 to 12 inches or larger displays in the near future.

Flat large displays are causing design challenges for vehicle interior designers and the future trends point toward use of curved displays and use of glass for display lens. Furthermore, gesture support and haptic feedback will also be integrated directly into these displays.

Visteon is already developing solutions for these requirements which will continue to position Visteon as the leader in this category. Looking at Slide 10, audio infotainment is a nearly $18 billion market with a widely distributed supply base. The audio portion of this market is quite sizeable and will be $6 billion market by 2020.

Visteon has a very competitive audio solution that provide Smartphone connectivity, superior listening experience and an intuitive user interface.

We stand to benefit from the growth of the display audio market which leverages or strengthens displays and will bring advanced Smartphone integration through applications such as CarPlay, Android Auto and Baidu CarLife.

We continue to win significant business in the audio segment such as the recent 2017 cross-car audio system for North American OEM worth about $270 million over the lifetime of the program. Infotainment has not been a focus of Visteon in the past.

However, the JCI Electronics business acquisition has given us an excellent platform and an existing business to build on. This is an area that I’m particularly familiar with from my recent past and I believe this is a strong growth opportunity for Visteon.

The evolution of silicone and software technologies mainly the emergence of multicore processor solutions and virtualization software is disrupting the traditional approach to developing infotainment systems.

This new approach to system design uses domain separation and software virtualization that enables integration of traditional infotainment features with features such as ADAS and connectivity.

As you will see on the next two slides, Visteon has the leading virtualization platform in the industry that offers us the potential to leapfrog the competition in the infotainment space. Turning to page 11, I would like to talk about the trend towards virtualization and domain integration in cockpit electronics that I have alluded to earlier.

This is a very big deal for the future of infotainment and instrument clusters. Connected car and active safety trends are bringing ever increasing content and features in the cockpit of the car. Automakers have traditionally addressed the increasing feature requirements by adding ECUs for every new feature.

This has resulted in the increase in the number of ECUs from a handful to around 30 even in mid-range vehicles and greater than 100 in high end cars. The number of ECUs is only expected to grow further. Much of the data on this chart comes from a recent Roland Berger study on this topic to which Visteon contributed significantly.

On the other hand, silicone and software technology has advanced to a point here we now have multicore processors available with four or eight cores on a single chip. No single ECU needs this amount of processing power.

With the use of software visualization, we have the potential to run multiple application domains on a single chip effectively integrating multiple ECUs into one. For example, the instrument cluster can integrate infotainment features or the infotainment head unit can offer active safety features in addition to navigation and multimedia capabilities.

This ECU integration through virtualization represents on an average $175 of savings to OEMs per car. It sounds easy enough, but to productize this concept requires a lot of work. There is no software solution readily available that can virtualize a multicore processor such that it meets the need of automotive applications.

However, the trend towards multicore silicone will only accelerate offering aid in 16 core processors very soon. What is needed is an automotive grade solution that can virtualize this multicore processor to address the needs of creating integrated infotainment ADAS and instrument cluster solution.

On slide 12, I’d like to introduce the innovative virtualization technology from Visteon called SmartCore.

This industry-based solution is a software based platform that leverages multicore silicone from suppliers like Intel and NVIDIA, Renesas and others to offer virtualized domains that can run application specific software as shown in the diagram on the top left of the slide.

Multiple domains can run side by side on scalable hardware through different operating systems greatly reducing vehicle system and network complexity. SmartCore was launched at CES earlier this year and I’m happy to inform you that it will be shipping in the market in 2018.

We believe that traditional approaches to building infotainment and instrument clusters which were designed for single core processors will not be sufficient for the next generation solutions. As it happens all the time, this fundamental shift in technology has the potential to be disruptive to suppliers who are caught behind in this evolution.

I am excited about the potential of SmartCore and the lead that Visteon has acquired in this critical area of technology. I expect this technology will enable Visteon to be more competitive in infotainment as well as in instrument clusters in the future.

That concludes the update on products and technology at Visteon and I hope I was able to share with you some of the reasons why I feel so excited about the potential of Visteon to emerge as a technology leader in the industry.

In the next two slides, I would like to share with you my thoughts about our position in China and our broad global customer base that are significant assets for us as we go forward. Moving to page 13, there has been a lot of interest in the overall vehicle market in China and we want to update you on that market as it relates to Visteon.

As I said earlier, Visteon is extremely well-positioned in China. We have joint ventures with the so-called big four domestic manufacturers in China SAIC, DongFeng, FAW, and ChangAn. This gives us excellent access to the market for our technologies and products.

Visteon is the market share leader in China for connected radios an infotainment and we are number two in instrument clusters. As we look into the future, we are very optimistic about the prospects for our other products that we discussed earlier such as Head-Up displays and for our SmartCore technology.

I believe in the long term, our joint ventures in the rich product portfolio will be a huge competitive advantage over other suppliers that do not have these assets and capabilities in China. That said, 2015 has seen growth rates in China soften from the higher levels experienced during the past few years.

Our 2015 guidance assumes that China passenger vehicle production volume will grow at 2.8% for the full year versus 2014 implying that the second half of 2015 will actually decrease slightly versus the second half of 2014.

As you see on the bottom left from a sensitivity viewpoint for every 5% change in China production volumes, we would expect Visteon sales in adjusted EBITDA to increase or decrease by approximately $7 million and $2 million respectively. China remains the world’s largest automotive market.

I believe that any supplier with aspirations to be a leader in this industry must have a strong presence in China. Despite the slight downturn in the volume forecast for the second half, I’m very pleased with our position in China. Moving to page 14, this slide shows how Visteon’s sales by region align closely with vehicle production around the world.

As you can see from the bar chart at the left and the pie chart in the middle of the slide, Visteon’s sales are balanced across the globe and aligned with global vehicle production. In addition of the top 15 OEM customers who make 80% of the market for cockpit electronics globally, we have significant business with 10 OEMs.

This gives us an excellent base to work with and I’m confident that we can grow our footprint with these existing customers while developing new ones. So on slide 15 in closing let me highlight my year term objectives. First, we will continue to execute the current operating plan for the near term.

This involves continuing to develop world class electronics and connected car technology portfolio. Driving new business wins and bolstering at our $500million four-year backlog, continuing to deliver electronic synergies. I’m happy to report that we are on track to realize the high end of our synergy target from the JCI acquisition of $70 million.

Additionally, we are on target to complete our capital return program to shareholders in 2016. Second, I will lead the development of a comprehensive go forward strategy.

As I said since the beginning as CEO on June 29, I have been meeting with leaders across the organization to analyze Visteon’s operational sense as well as areas in which we can improve. My focus is on identifying the best products in market in which to invest based on Visteon’s estimated long term growth potential and future returns.

We will spend the next 90 days evaluating and developing our go forward strategy and will present the strategy in an auto conference in November 2015. In summary, we had a very strong quarter and first half and we are focused on continuing our momentum in the second half.

I’m impressed with what I’ve seen so far at Visteon and I’m excited to be working with the team to develop a strategy to lead this business through the next phase of its transformation as a pure play electronics company. So with that I will turn it over to Jeff who will take you through the numbers in detail..

Great. Thanks Sachin and good morning everyone. I’ll begin my comments on slide 17 where we present our key financial results for second quarter of 2015 compared to the second quarter of 2014. As we have explained on prior calls, our financial results are impacted by a number of items that make year-over-year comparisons difficult.

The adjusted financial information presented on this slide excludes these items and represents how we manage the business internally. As non-GAAP financial measures, this adjusted financial information is reconciled to US GAAP financials in the attached appendix on pages 29 to 33.

Additionally, year-over-year comparisons are impacted by the acquisition of Johnson Controls electronics business in July 2014. This transaction resulted in a significant year-over-year increase in sales, adjusted gross margin and adjusted SG&A and adjusted EBITDA.

Lastly, in this quarter we have reclassified the majority of our climate business as discontinued operations in our financial statements. As we explained in previous calls, last year we were classified the majority of our interiors business as discontinued operations.

As a result, our income statement has been adjusted to exclude both climate and interior specific income and expense. Climate and interiors net profit has been combined and reflected on one line as discontinued operations. The financials on this slide exclude discontinued operations with the exception of free cash flow and adjusted free cash flow.

Adjusted EBITDA was 16 million in the quarter compared to 29 million for the same period last year, a 31 million year over year increase reflects the impact of the JCI Electronics acquisition and improved electronics performance partially offset by higher engineering costs.

Adjusted free cash flow is 33 million in the quarter, 51 million higher than in the same period last year. Adjusted free cash flow for electronics in corporate only was 57 million, 73 million higher than the second quarter last year. I’ll cover these metrics more on the following pages.

Turning to slide 18, we provide second quarter 2015 sales and adjusted EBITDA for Core Visteon and Total Visteon. Core Visteon which includes the combined results of the electronics product group in corporate cost is that we expect to be our ongoing operations after we address our legacy interiors and climate facilities.

Sales for Core Visteon were 780 million in the quarter, 337 million higher than the last year. Adjusted EBITDA for Core Visteon was 60 million, 28 million higher than last year. Adjusted EBITDA for Core Visteon was 60 million, 28 million higher than the same period last year.

As we have already discussed, the Johnson Controls Electronics acquisition closed on July 1 2014. Thus it is included in our current 2015 results but was not in Q2 last year. I will go into more detail on the year over year sales and adjusted EBITDA comparisons on the following slides.

Moving to slide 19, electronic sales for the second quarter of 2015 were $780 million. Adjusted EBITDA for electronics including corporate cost was $60 million. Sales increased versus 2014 by 337 million largely driven by the JCI Electronics acquisition and net new business wins.

These increases more than offset 33 million of unfavorable foreign exchange primary related to a weaker euro. Adjusted EBITDA increased 28 million in the second quarter versus 2014.

The increase is again primarily driven by the JCI Electronics acquisition and new business wins as well as a positive business equation partially offset by higher product development costs.

Currency was neutral for the quarter as the unfavorable related to the euro was offset by our hedging program and a favorable impact related to the Mexican Peso and the Japanese Yen. On slide 20, we highlight electronics and corporate adjusted EBITDA and adjusted EBITDA margins for the last several quarters.

The JCI electronics integration continues to grow well and as expected. We have seen significant improvement in electronics adjusted EBITDA in the first half of 2015 versus the second half of 2014. Adjusted EBITDA in the first half of this year is 144 million, 49 million or 52% higher than the second half of last year.

Higher volumes drove a proportion of that improvement, but we’ve also seen a reduction in fixed costs as well. While we continue to expect future synergies from this integration we believe we are on track to achieve 70 million synergies which is at the high end of our original projections.

We did see a dip in adjusted EBITDA in the second quarter when compared to the first quarter. This was not entirely unexpected. As we said during the first quarter call, Q1 benefitted from higher than average engineering recoveries in a patent sale.

In addition, our second quarter results were impacted by approximately 9 million of unusual warranty expense. This expense reflected two customer actions related to defective parts from our suppliers. We do plan to pursue reimbursement for these issues from our supply base, but we have not included any of this recovery in our forward guidance.

Adjusted EBITDA as a per cent of sales for the quarter was 7.7%. Normalizing the impact for the engineering recoveries and the pattern sale plus excluding the warranty expense would increase that margin to 10.5%. On slide 21, we provide adjusted free cash flow for the second quarter and he first six months of 2015.

Total adjusted free cash flow was 33 million in the second quarter and 172 million for the first half of 2015. On this slide, we have separated the electronics and corporate cash flows. From the cash flows related to the other product group and our discontinued operations.

Our core electronics and corporate adjusted free cash flow was 57 million for the quarter and 63 million on a year-to-date basis. The positive cash flow for the first half of the year was despite 27 million in seasonal trade working capital outflows.

Trade Working capital which is impacted by plant shutdowns, has historically been negative in the first and third quarters for the electronics business, but generally recovers a little in Q2 and more substantially in Q4. As you can see, we experienced a little recovery in the second quarter.

Turning to slide 22, here we detailed the restructuring and integration cash flows in the first half of the year and provide a forecast for projected outflows in the second half of the year and 2016. I will spend a fair amount of time walking you through the slide.

Restructuring and integration cash payments related to electronics products group in corporate were 22 million in the first half of 2015. Our 2015, 2016 projection for these cash payments is 135 million in line with earlier projections, but some outflows originally projected in 2015 had slipped into 2016.

Restructuring and integration cash payments related to the climate and interiors business are now projected at 364 million. The majority of these outflows have been discussed previously, but there are couple of new items and we thought it would be helpful to aggregate them together on this slide.

The largest outflow is related to the European Interior facility sale planned for later this year. This payment is currently expected to be approximately 160 million Euros split into two payments. Based on today’s exchange rates, we estimate the impact to be approximately USD$180 million.

Please note that this payment is approximately equal to the pension liability we will transfer upon sale. In connection with the sale of our stock in HVCC, now called Hanon Systems, we agreed to provide the business with a separate and standalone IT environment.

We estimate that this will take us approximately 18 months and 53 million to separate them from the Visteon IT network. In addition, we also expect $50 million payment in early 2016 related to the repurchase of the Indian Electronics facility from Hanon.

As I mentioned in the last several calls, our electronics business in India was embedded in the HVCC Hanon legal entity structure. We have signed an agreement with Hanon to purchase this operation for $50 million. During the interim period before we can close on this purchase, we will maintain operational control of the business.

We had previously announced we would not consolidate the financials for this facility until the repurchase occurred in early 2016, but based on our subsequent agreement with Hanon to repurchase it for 50 million while maintaining operating control we will continue to consolidate this business going forward as if it had never left the Visteon structure.

It should be noted that the cost related to both the IT agreement and the purchase of the electronics facility are netted against the proceeds of the transactions. So we do not expect further P&L impact related to these cash outflows. The remainder of items on this schedule are consistent with our previous guidance.

These include a 30 million labor payment related to the HVCC transaction which was paid in Q2 and 42 million of a collection of items including professional fees and some additional restructuring. We also show $9 million of cash tax payments related to the final proceeds from the Yanfeng disposition.

We collected $91 million of proceeds in the quarter from this final part of the Yanfeng proceeds and we recorded it in our cash from investing activities in the second quarter. Finally, we highlight our expected future net recovery of withholding taxes.

The gross taxes to be recovered are closer to 375 million, but we have offset this amount for a range of potential taxes due in the US as we repatriate this money.

While there is no ability to know for certain and as we have stated in the past we believe the tax treaties between Korea and our relevant subsidiary locations including the United States are clear and suggest that we will ultimately recover this money.

Moving to slide 23, we highlight our US tax attributes as well as three significant divestitures we have completed during the last three years. With each of these divestitures Visteon was able to implement a number of tax efficient planning initiatives that helped manage the tax consequences of the transaction.

As a result of the sale of the HVCC shares, we expect to fully utilize our post emergence in the US NOLs balance of 500 plus million in 2015. However, we expected to have as much as 1.6 billion of pre emergence US NOLs remaining and available for future utilization.

These pre-emergence US NOLs provide a tax shield of at least 120 million per year for dividends, royalties and other foreign sources of income. These have already benefitted us as well on the JCI Electronics integration as we have organized our structure to utilize these tax attributes.

Hence, these NOLs provide future opportunity to reduce our overall effective tax rate. Turning to slide 24, we provide an estimate for Visteon’s full year 2015 tax expense.

We expect full year adjusted book and cash taxes to equal 55 million representing operating taxes paid on earnings and profitable jurisdictions as well as withholding taxes on dividends from joint ventures and affiliates. The taxes on this slide relate to our electronics and corporate operations only and exclude the following items.

Taxes related to our discontinued operations in other product group, 8 million in taxes on the delayed portion of the YanFeng Visteon proceeds which we received during the second quarter and 8 million in favorable ax contingencies recorded during the first quarter of this year. I’d like to spend a minute talking about our effective tax rate.

As most of you are aware Visteon’s effective tax rate has been widely variable due to a number of factors including the fact that Visteon has historically been unable to record a tax benefit for the losses generated in certain jurisdictions.

As a pure play electronics company, we believe we are now better positioned from our tax, legal and overall business structure perspective to maintain a more stable, less variable effective tax rate going forward.

For the full year, we expect our implied effective tax rate in profitable jurisdictions to be 23% and our overall effective tax rate to be closer to 33% or below the US statutory rate of 35%.

Furthermore, by continuing to reduce losses in unprofitable jurisdictions and utilizing existing NOLs, we believe we have opportunity to reduce this rate in future years. Turning to slight 25, we provide our full year 2015 financial guidance.

It should be noted that these amounts relate to our electronics and corporate operations only and exclude our other product group as well as our discontinued operations. We are reaffirming our full year sales adjusted EBITDA and adjusted free cash flow guidance.

However, based on our first half performance and because we are consolidating the HVCC Hanon, Indian electronics facility that we had previously excluded from our guidance, we believe we will be at the high end of the range for both adjusted EBITDA and adjusted free cash flow.

For the full year we are projecting sales of 3.0 billion, adjusted EBITDA up 245 million to 265 million and adjusted free cash flow of 40 million to 80 million. Now let me turn it back to Bob for Q&A..

Thank you, Sachin and Jeff. I would now like to turn it over to the operator to open the lines for questions. Again, please limit your question to one question in one follow up..

[Operator Instructions] Your first question comes from the line of Colin Langan with UBS. Please go ahead..

Great, thanks for taking my question. Sachin, what do you feel is the bigger opportunity for Visteon, display has had a lot on clusters than displays in the market opportunity there, but it did seem pretty foolish about the share opportunities [indiscernible].

Do you think that possible how long will that take to improving [indiscernible] pretty strong competitors there..

Good morning, Colin. I think it’s an excellent question because this is the main reason why I have come to Visteon. I see a big transformation occurring in the cockpit electronics where on account of the complexity of the systems there is a drive towards integration.

And Visteon has the breadth of product portfolio, the expertise in all aspects of the business including functional safety capabilities coupled with infotainment which is very key to being able to successfully integrate.

And as you heard from my comments earlier, we have an underlying integration technology that we call SmartCore which gives us a great opportunity to take the lead in integrating these various functions and features. So I see really good opportunities for us.

We have already started to see business in this direction and as I mentioned we will start to see the first shipments starting 2018 and from that point onwards, it will only accelerate.

So that’ the view from where we stand today and I’m sure this industry is going to be a very fast moving one and we will provide you with more updates as we go forward here with how we see the technology and the product space evolve..

Okay and my second question is it sounds like you reaffirmed your capital return plan.

How are you thinking though about M&A? Do you think it has the right technology today or do you think you’re going to need to do some ballpoint acquisitions or larger acquisitions? And do you actually - are you considering divestiture of getting product that may be are lower growth..

Yeah. Visteon has a tremendous amount of technology and technical competence across the breadth of the products that we currently serve, but as the technology base - especially when it comes to infotainment is evolving very quickly.

We will be looking very carefully at what specific technologies that we may need to bring whether developing that in-house or through an inorganic manner and we will be carefully looking at those requirements as well as opportunities out there in the market.

I’m very optimistic that we will be in a position to really strengthen our technology base, in infotainment we have very clear vision of where we want to go with it. It is not the same that the industry has traditionally been doing. This is truly approaching an inflection point.

The way I look at it is the last 10 years, we as an industry and you know us from my days at Harman. We had been successful in successively increasing the capabilities leveraging more slow, adding more software, but now we’re reaching a point where we have to rethink how these systems need to be build.

Security concerns as well as distraction and the amount of features that are coming in are driving slightly different needs than in the past. So we stand at this juncture where we cannot continue to go down the path of what we’ve been doing in the past as an industry, there’s a fundamental shift.

Not to mention also the fact that traditional capabilities such as navigation and media are now going to come more and more from the phone.

So we stand at that crossroad, I believe Visteon is better equipped today than virtually almost anybody else because some of the legacy technologies in business is going to hold back some of our competitors from doing what we need to do to leapfrog..

Thank you very much, very interesting..

Your next question comes from the line of Matthew Stover with SIG. Please go ahead..

Thanks for taking my call. This is Brendon in for Matt. The balance of the HVCC cash, it says 3 billion on slide 3, but cash flow has 2.664 or 2.755 including the JV sale which is probably a part of it..

Yeah, I’ll reconcile those numbers. Good morning, Brendon. If you look you’ll see a couple of components of our cash flow came in. In the first quarter we actually received the dividend from Hanon which was about $70 million and then you’ll see about 3.4 billion or a little bit more than 3.4 billion in our cash flow statement.

To get down to that 2.664 you mentioned, there’s a few deductions, I’ll walk you through those. There’s $377 million Korean withholding tax, you’ll see an asset in our balance sheet to recover a net 200 or 250 or so of that. We gave a range of 200 or 300 over the next few years.

There was also 17 million of share tax in Korea and then the amount of cash that Hanon held on their books was 345 million and the account works that netted against debt on the cash flow statement.

But it’s still a net $3 billion - with all those factors it’s still a net $3 billion that came in the door with an opportunity to increase that 200 to 300 depending on the outcome of the withholding taxes in Korea..

Okay, great. And the SG&A 8% of sales of looks high, we recognize that there’s going to be some lumpiness in there, but what should we think about that for the full year of 2015.

Is it also reasonable to assume that could go down to about 7% in ‘16?.

Yeah, as we highlighted on our earlier call this year, I think it might have been our year end call. We’ve recognized that our SG&A is higher than it should be. Some of that is from the legacy elements as we’ve shrunk down the business and are now just a core smaller electronics group and still have some elements of legacy on our cost structure.

We had brought in some consultants and we’ve formulated benchmarks and we’re in the process of coming up with plans to bring ourselves down closer to benchmarks.

Your 7% number that you highlighted I think is probably a stepping stone to where we’d like to be, in the future it would be lower than that number and we’ll continue to work that number down really to the peer group which is stay in probably the 5% to 6% range.

It will take us a little bit of time to get there and we’re going to need to probably complete some of the legacy transaction moves. Some of those orphan facilities we have are climate or interiors [ph], but as those things are simplified we do see an opportunity to make some substantial reductions in our SG&A.

And I would say also growth will help us as well as we won’t have to add as much resources, so that will be accomplished really in two areas..

Thanks very much..

Your next question comes from the line of Brian Johnson with Barclays. Please go ahead..

Yes, so I want to ask really some questions about SmartCore and then your preliminary views of the evolution of the business as your - as when this kind of tipping point. The first is I guess two questions on SmartCore.

One, given the recent publicity around cyber security [indiscernible], how do you see SmartCore fitting in as a solution for cyber security concerns? And I guess second question strategic around SmartCore is, two what extent is there an advantage to having a deep position in current dashboards cockpits versus the people who may be better known for infotainment, but don’t necessarily have that dashboard position..

Right, so as concerns security Brian, you can take a look at it from a couple of perspectives. One, in the current architecture of how we build the systems with all the use that go in, your network security is only as strong or as weak as the weakest element in that network.

As you integrate these easy use into a virtualized system you have the potential to now focus on creating a more secured system because it is now a single devise that you have to worry about. Moreover, as we go forward here, this is the second part of the answer that security would be embedded as part of our SmartCore framework.

It is already offering a level of security that is quite advanced by ensuring that the domains are not able to sort of transition from one to the other. So there is inherent protection in that sense.

Now, to address the question of does it have a benefit to people who have this multiple products such as outsourced at Visteon, it’s extremely important to have AISL capability of certain products within the cockpit would be required as they’re today to have a level of functional safety requirement.

Visteon is one of those few suppliers that have within their portfolio ASIL capable solutions as well as infotainment which does not require AISL. We have a unique ability to integrate those two, understanding the requirements of both and then being able to certify to the right level of AISL requirement.

So we believe we have what necessary capabilities are that are required to play in the space. We have a head start with the SmartCore development. This development has been going on for at least over two years and there’s a tremendous amount of technology that has been built already into it.

So I think we have a head start that I look forward to, to retaining and capitalizing on..

Okay and second question is just around, so the next few years for the current business, the mix of cockpit electronics and kind of I guess what might be described as mid-range infotainment, to what extent is there a sort of risk to some of that rolling off or pricing pressure as you build sort of the 2018 and 2020 backlog around more of these higher end products?.

So what we see there as opportunity is essentially this mid-range infotainment solutions which are playing heavily up of the Smartphone connectivity. So in fact we see a growth opportunity here based on where we stand today with Visteon’s footprint in that business.

And it is not so much the pricing challenges as much as the technological challenges that we and the rest of the industry have in being able to meet the demands of that segment in the timeframe that you just mentioned. So the way I look at it at this point in time, the pipeline of the business that we are looking at is growing.

It is a time horizon - I would say sometime 2018 and beyond where we would start to see shipping systems with the technologies that we have, that I mentioned earlier and the opportunity to grow our infotainment business is significant as compared to where we have it today..

Is sort of is that we just think of that base business as a fairly solid between 2017 and ‘18 or I’m going to guess getting to the issues which probably you discovered as well that JCI came in with negative backlog and I guess to what extent has that been back felt in 2017, 2018 are shaping up well?.

Right and we have - we are definitely protecting our business in that time horizon and we have a business that I mentioned that would be launching in 2018 timeframe that would also be infotainment that is an addition to that infotainment business. So net-net I would expect those to be able to grow the business from where we’re at today..

Okay and just to clarify one technical word you used, ALS or what was the certification for this term [ph] you talked about?.

Yeah, it is ASIL, A-S-I-L. It’s a functional safety certification that’s required for - for example products like clusters..

Okay and that’s enforced by the NHTSA and the Analog International?.

Also by ETS and also by the automotive OE, so if you don’t have that capabilities you would not be able to get into the cluster business as an example or active safety and there are multiple levels of AISL ranging from B all the way up to D.

And if you do not have that capability obviously that blocks you from integrating that functionality into the systems of the future that would use multicore silicone..

Okay, so that’s why it’s important to be in the cockpit because of that AISL and I assume also the relationships with the HMRA engineering staff that is going to be integrated in with the people who just did it through [ph] infotainment center units before..

That’s correct, without AISL you have to have essentially separate devices and not - have the potential to integrate it..

Okay, great. Well, we’re going talk about this more in November. Looking forward to it..

Thank you..

Your next question comes from the line of Ryan Brinkman with JP Morgan. Please go ahead..

Great, good morning, thanks for taking my call..

Good morning Ryan..

One for Sachin may be to start with your comments on page 6, I rather expected that one of your initial impressions of this time would be with a very strong instrument clusters, center information displays, audio head units, connectivity, telematics et cetera.

I’m curious now coming from Harman what you think specifically of Visteon’s current infotainment offerings maybe more of the embedded type. My understanding was that Harman didn’t feel that really competed with Visteon at least in embedded infotainment.

And whether you think, it makes sense to take Visteon’s infotainment business more in the direction of the strategy that you were pursuing at your former employer.

And then just along those lines maybe help us understand what the key differences are between Visteon and Harman’s approach is to infotainment and what kind of investment in either time or money or management focus and attention might be required to really make this down a top tier infotainment competitor along the lines of a Denso or a Harman or whether that even makes sense to pursue.

Thanks..

Right and I think that’s the fundamental question that we’ll all be addressing. Internally we’ll be spending a lot of time to understand what’s the best strategy to come up with, but let me give you some ideas, some thoughts that we have at this stage.

But to answer the first question which was, how does infotainment capabilities compared with that of say, Harman.

Harman obviously came from the very high end of the infotainment market and has strong capabilities with embedded navigation, which has been a legacy from the days in the past where there was no other way to implement navigation other than embedded and it has a lot of capabilities on integrating the features that today you see in high end infotainment systems.

With the JCI acquisition what we have here at Visteon is a mid-range infotainment solution that from a connectivity view point, from a USB, from Bluetooth, from even the basin infotainment capabilities is as good as any out there in the market place. So it meets the requirement of the mass market segment of vehicles extremely well.

For whatever reason that was not the focus either at JCI or at Visteon from what I can tell and that was really the reason why the business didn’t really grow from where it is at today. It is not necessarily a technology issue in my opinion, but more of a business and focus issue.

But now, if you were to look into the future, I don’t believe that we should necessarily chase the systems and the solutions that have evolved over the last few years because I don’t believe that that’s where the industry is going.

The things that have fundamentally changed the landscape are the entrance of new technologies and partners driven by the Silicon Valley companies that is changing how an infotainment system would look like going into the future. And so what we are in the process of doing here is to define our solution for the 2018, 2019 timeframe.

I think we have a good enough solution to carry us until then as I mentioned earlier, but we need to have a leading platform that integrates all the capabilities that are expected both coming from the Smartphone side as well as some of the new technologies such as HTML5 security and Car2x or V2V as its also called and integrating safety into an integrated device sometimes that has been called as a cockpit domain controller, SmartCore is the underlying capability of the framework, but that’s the direction we will take most likely.

This is something still that’s evolving and we will give you more update in the fall timeframe at one of the conferences that we will be participating in..

Okay, thanks for that clear explanation. It’s very helpful and then just last question maybe for Jeff on the new business wins. Looks like 600 million of new wins in the first half looks a lot, can a provide some color on this such as any sort of breakdown by product type or geography.

And then also like how to put that in context of the $500 million backlog, I believe these can’t be directly comparable numbers right. The 500 million is what a net new business backlog or is the 600 million may include some sort of ramping [ph] the business here currently on, how to think about that. Thanks..

Sure. Ryan, the $500 million backlog is actually what we put out annually. We do it - the four year backlog number that it takes out net business or lost business I should say, so it’s net new not taking in vehicle growth or industry growth into mind, but it’s 500 million annual backlog number for four years.

That’s the number we post every Deutsche bank conference usually in early January I should say [ph], to give a plug to Deutsche bank, but that’s the conference we generally do it at. The second part of your question is the 600 million.

Last year we had a net business win or a business win I should say of about $1.3 billion give or take, that’s about where we set the target up for this year and I’d say we’re on pace to do that. Those things aren’t necessarily evenly divided by quarter, but as we look at the year I think we still are optimistic.

Getting to those numbers should allow us to increase our annual backlog further and we’ll update you more on when we get to the end of the year. As far as what we’ve won, I’d say it’s generally in line with our current product mix between clusters and audio et cetera..

Okay, that’s helpful. Thanks a lot..

Operator, we’ve got time for one more question..

Your final question comes from the line of Itay Michaeli with Citi. Please go ahead..

Great, thanks. Good morning everyone and congrats. Jeff just on the guidance, nice to see the upper end of the EBITDA range emphasize, I think if I look at the [indiscernible] second half versus first half, particularly excluding the warranty item in Q2.

It does imply bit of a step-down sequentially, I think historically in electronics pre JCI second half used to kind of finish, you’re fairly strong in the fourth quarter.

Can you maybe just help us with some of the puts and takes around kind of the sequential margin walking in the business and may to the extent that there might be any conservatives in there..

Sure. Good morning Itay. A couple of things there, as you mentioned we were kind of steering you towards or at least we’re trending towards the higher part of the guidance, but there’s a lot of I’d say distance between now and the year end and our business doesn’t work exactly seasonal, it also can be a little bit lumpy.

So we’ve talked about it various periods, the amount of engineering recovery that comes in any particular quarter or warranty heads or other things that can move that quarterly EBITDA a fair amount.

As we look at the first half of this year, we had a little bit - especially in the first quarter a bit better currency environment than we’re sitting in now, so that certainly impacts us a little bit on some caution.

We also - I would say our business as you know is seasonal such that more of our sales tend to land in the first half of the year than the second and since we have - as an industry as well we have a high amount of fixed cost, so the leverage or the fixed cost absorption in the margin will usually be even better in the first half than it is in the second half.

I think we’ll continue to update you as we go forward with the year, but as we sit here today this is the number that given all the uncertainty in the world we thought ranging on the high end of this guidance or still appropriate..

That’s very helpful and just two quick housekeeping follow-ups.

First, with the ASR side, just any guidance on share count that gets for Q3 and Q4 and then I think on the tax [indiscernible] the changes and progress you’re making, any kind of targeted mid-term, long-term tax rate for the business?.

Yeah, first question on the ASR. We launched that in June, $500 million, the 2% discount on the average price over the time that program is outstanding. So it should end somewhere in the fourth quarter, but have to end by December 31.

From a share count perspective, we can’t guess it exactly, but it should be around 40 million shares once that’s all is completed..

40 million?.

40 million shares..

Yeah, 40 million shares outstanding..

Yeah, 40 million shares outstanding at 40 million purchased, excuse me. So 40 million outstanding after the ASR is completed..

That’s helpful and then Jeff on the tax rate?.

Yeah, the tax rate, we have - we put 33% as our estimate for this year. It still includes some losses and unprofitable locations, that’s something we’re going to be continuing to work on. As you’ve seen we’ve built that number or pushed that number down quite a bit over time.

There’s still room to go there and I see better tax strategies around some of our, I’d say just overall better or continuing to utilize our US attributes, should get us I would suspect inside of 30 at some point, but that’s we’re going to continue to monitor and we’ll report on that as we go forward, but it will take a little bit of time.

But there’s no reason we shouldn’t start to push down lower and below 30%..

Terrific, that’s very helpful. Thanks everyone..

Well, thank you Sachin and Jeff. I’d like to thank everyone for their participation on today’s call. If you have additional questions, please feel free to contact me at your convenience. Now I’d like to turn it back over to Sachin for some final comments.

Sachin?.

Thanks, Bob and thank you again for joining us today and for your support and investment in Visteon. We had a good quarter and we look forward to continuing the momentum in the second half. Visteon is well positioned to be an industry leader with the singular focus on cockpit electronics and the connected car.

I’m privileged and excited to be leading this company into this next phase of its transformation. I assure you that we’ll bring a very sharp focus on customers, technology and cost every day which I’m confident will drive value for our investors. Look forward to sharing details on our vision and mission with you in the fall. Thanks again and good day..

Thank you. This concludes today’s conference call. You may now disconnect..