Welcome to the Visteon first quarter 2008 earnings conference call. (Operator Instructions) Before we begin this morning’s conference call, I’d 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 Statements for further information. Presentation materials for today’s call were posted to the company’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, Derek Fiebig, Director of Investor Relations for Visteon Corporation.

Joining me on today’s call are Mike Johnston, our Chairman and CEO; Don Stebbins, our President and COO; and Bill Quigley, our CFO. Following our formal presentation, we will open up the lines for questions. And with that, I will turn it over to Mike.

I’ll provide a high-level overview of the progress Visteon has made in improving our business before turning the call over to Don and Bill, who will provide additional color on the operations and the financials. In January we shared our outlook for 2008 with the financial community and we highlighted the fact that 2008 is expected to be a significant year of restructuring as we close out the final year of our three-year plan. The actions we have taken over the past two plus years coupled with the actions we’re taking this year will put us in a position to be free cash flow positive in 2009. We are targeting eight actions for completion during 2008. We completed one of the eight in the first quarter and we are confident that we will deliver on the remaining items before the end of 2008 and we continue to look to accelerate additional actions yet this year. In addition to the three year plan we announced earlier this year that we have begun an initiative to further reduce our overhead cost structure primarily related to administrative and engineering cost. This initiative is expected to generate $215 million of cumulative gross savings over a three-year period and we are on track to deliver the results. Customer diversification on a geographic and customer basis remains a key tenet of the Visteon improvement story and we continue to become less dependent on the North American market and Ford in North America. We continue to drive improvements in our core business as we focus on quality, safety, and operational excellence. We currently are nearly at world-class levels for safety performance and our quality continues to improve. We realize that the near-term environment particularly here in North America is uncertain. However, with our improved global footprint and…

Slide 7 shows our new business this quarter. We won approximately $125 million of new business, which is slightly below last year’s level, as certain of our customers have delayed sourcing decisions and in some cases have even cancelled platforms as they re-examined their product portfolio in light of certain market conditions. As you can see the wins this quarter were primarily in climate and interiors and almost exclusively in Asia and Europe. Slide 8 provides the usual brief update on our operations. On the quality front, we continue to drive improvement as we lowered our PPMs for the first quarter of this year by 40% versus our performance in 2007. Regarding our safety performance, after posting a world-class performance in 2007, we stumbled our way into 2008 as we had an increase of 29% from full-year 2007. We fully expect to see year-over-year improvement for 2008. Premium costs are down significantly from what we experienced in 2007. For the first quarter our costs of $4 million were $10 million better than first quarter ‘07. As we had discussed throughout last year, we suffered from labor, launch and supplier disruptions, which caused last year’s poor performance. We expect this year to be substantially better. Finally CapEx was $10 million higher than a year ago reflecting our investment in our new business. We still expect our capital expenditures for 2008 to be below 2007 levels. Slide 9 provides an overview on our overhead cost reduction initiative. Over the next three years we expect this initiative to provide over $200 million in gross savings as we address our SG&A and engineering costs. Of this we expect $80 million in net savings in 2008. Compared to the first quarter of 2007, we reduced our costs by over $20 million or more than 8%.…

This slide summarizes our financial results for the first quarter. Product sales of $2.7 billion were essentially even with the prior year, yet as Mike discussed we continue to experience a shift in the composition of our sales by customer, product group and region. Our product gross margin for the quarter was $194 million compared to $115 million a year ago, a $79 million improvement. EBIT-R, which excludes asset impairments, loss on business divestures and net restructuring expenses was positive $51 million for the quarter as compared to negative $46 million a year ago, an improvement of $97 million. Cost improvements in our product groups including restructuring savings as well as other actions we are taking to address our cost profile drove much of the improvement. Free cash flow in the quarter was a usage of $200 million, compared with $195 million last year. Year-over-year, the improvement in EBIT-R as well as lower securitization levels were offset by increased cash outlays related to our restructuring actions, timing of recoverable value added tax assets, higher capital net spending and the net movement in pension and OPEB expense and cash payments. I will address each of these items in further detail. On Slide 5, this provides a change in production volumes for the first quarter for key vehicle platforms by customer, which Visteon has significant content. These customers account for about two-thirds of our total first quarter products sales. Hyundai/Kia production volumes were 33% higher than a year ago reflecting both the significant increase in Asia Pacific volumes as well as increased Europe volume related to new business launched for this customer during the last year. Ford of Europe production volumes, which were solid in 2007, were up 3%, while Ford North America was lower by about 7% or about 55,000 units.…

(Operator Instructions) Your first question is from Chris Ceraso - Credit Suisse.

On the expectation that you’ll be cash flow positive in 2009, is there an industry level of sales for U.S. or North America that goes along with that and what is it?

As we discussed in January we obviously marked from an industry perspective what we thought production volumes at that time would be for ‘08. As we looked into ‘09 and as you can probably imagine we were not looking at any really significant recovery moving from ‘08 levels the time in January into ‘09. So I’d preface to that without specifics that we looked at effectively somewhat of a stable market from ‘08 to ‘09.

Even if we’re talking about another 15 million unit year you should be cash flow positive next year?

That’s our objective.

And then secondly on the 2008 guidance for EBIT-R and cash flow, can you update us on what you’re thinking about raw materials, how much has it hit you for so far? What’s the expectation for the full year?

I think I have on every call on the last couple of days, obviously, commodities continue to be a potential headwind. If we look at our landscape we have been fairly successful with respect to customer arrangements or agreements with respect to offsetting of commodity costs. If you think about Visteon, if you think about our various product groups, we obviously have exposure to aluminum in climate, from electronics perspective it’s largely in purchase components, but there are raw materials such as copper. And then obviously in interiors, its larger resin buy if you will, a plastics buy. So as we look at that, we don’t expect commodity prices to actually decline from levels currently. But from that perspective we continue to work with the customers with respect to recoveries.

But you outlined a figure, Bill, in terms of either the gross or the net impact ‘08 versus ‘07 from commodities?

We’ve not provided that, Chris.

On commodities, we’ve seen that a few companies have had gains on mark-to-market on their hedges, was there any of that in the first quarter for Visteon.

Nominal, Chris, from a commodity hedge.

Your next question comes from Jeff Skoglund - UBS.

On the EBIT-R guidance for the year, I think you beat most people’s expectations for the first quarter and if I’m doing the math right, it looks like your guidance implies that EBIT-R should be down year-over-year for the balance of the year is that accurate or am I looking at that wrong?

Although we’re exceedingly pleased with the progress the company is making as shown by the year-over-year results, I think that given the uncertainties that’s created by the US recession, the difficult credit markets, raw material/commodity prices at or near record highs we all think it’s prudent to leave the full-year guidance unchanged right now.

And on the raw material side I think it’s probably baked into the net performance number, but did you give an impact for the quarter?

You are exactly correct. It is in the net cost performance as is obviously customer pricing and other issues. We’ve not provided that information. I think it is needless to say that we will continue to work with the customers with respect to arrangements on recoveries with that, Jeff.

Do you expect that to be an increasing headwind throughout the year? Was there a lag effect where some of the recent increases didn’t necessarily impact Q1, but will increasingly impact the coming quarters?

Yes, I do think that will be increasing as we move through the year.

Yes, so we’ve got arrangements, contracts with suppliers, as they come off contract, with respect to oil, who knows what that cost could be as we move during the course of the year. But it probably is something that would be an incremental challenge to us as we move through the year.

And then we talked before about the interior business and you have some contracts rolling off that are not as profitable as some one’s that, or at least you anticipate coming on stream over the coming quarters. You did see some margin improvement in interiors, but when should we really to start to see the impact of some of those less profitable contracts rolling off and the more profitable ones rolling on?

We have two significant launches that we’re just in the start-up process with right now. One is for Chrysler here in North America and the other is for PSA in France. And so I would say that those will fully launch late this year, let’s say late third quarter, early fourth quarter of this year. So you will see that benefit of those two programs really start to pick up speed fourth quarter, first quarter of next year.

The support agreements that you had with customers for the UK plants, did that affect the full quarter or does that come on line at some point or even was that an impact in prior quarters?

It impacted two-thirds of the first quarter.

Lastly pension and OPEB, you’ve got guidance in the 10-K for cash outlays, or for pension and OPEB in the year. I was wondering if you could discuss what your outlook for the expense was for each for those.

Yes, I think actually we provided that in January as well. If you take a look at our total combined OPEB and pension expense, we are looking at in 2008 about $50 million and as we’ve discussed we do have some obviously curtailment gains and losses as we continue our restructuring plan and on the cash side we said about $140 million between the two, OPEB and pension contributions, during the course of 2008.

Our next question is from Joe Amaturo - Buckingham Research.

On the cash flow slide that you put up, could you give us a sense of how that should trend as we progress through 2008, and what are some of the main items to continue in that bucket?

As we look at the free cash flow for the quarter obviously the use and the other changes of $130 million, let me just restate what’s walking through that right now for the first quarter. We do have some timing with respect to value-added tax. It’s a drag in the quarter of about $33 million. We expect that to trend out during the course of the year, so it’s not going to be a repeating feature, if you will. From a restructuring perspective that’s got a net outflow of about $30 million as we discussed during all of our business updates and we do expect 2008 to be obviously a cash use if you will from the restructuring perspective. That will probably trend down negative. That gets a little lumpy with respect to recoveries from the escrow account in the ultimate cash payments made to execute the restructuring actions. And then we have got net OPEB pension cash payments negative about $20 million. Also what’s in here is that you’ve got interest on our bonds, which is paid in the first quarter and the third quarter, so you’re going to have a hit obviously in the first quarter. So in a nutshell, I would expect that $130 not to recur during the course of the year.

As it relates to the Swansea customer agreement you referenced at two-third of the quarter, is there any way that you can quantify what the benefit was in the first quarter as a result of that customer agreement?

It’s about $6 million.

Your next question comes from Mark Warnsman - Calyon.

Regarding the Slide 10, movement to lower cost and basically engineering headcount, I am curious as to what trends you are seeing in low-cost countries and when you think about the weakness in the U.S. dollar the relative productivity of an engineer in a low-cost country versus say North America or Europe and also the availability of those engineers in low-cost markets? Is this a trend that you see continuing? How long can it continue? How do you go about evaluating the relative pluses and minuses of sourcing engineering from low-cost markets?

In the simplest sense we look at the lowest delivered cost of the service to us, so certainly in a start up situation you do have some inefficiencies and typically you would see let’s say two engineers for every experienced engineer here and so you’ve got to bake that into your cost model as to whether or not a benefit or not. Certainly as you point out the weakness in the U.S. dollar also plays into that, but you have to also recognize for us we’ve got substantial engineering resources in Europe and so that benefit, so to speak, of the U.S. dollar isn’t translating towards us. So we look at the lowest delivered cost for the service, we continually evaluate whether that makes sense to do for both the business and our customers and we’ll continue to do that as we look forward. But certainly from our perspective you do have to service the customer and so there will always from our perspective be significant engineering support in the high-cost countries to service the customer base.

On Slide 15 regarding key platforms and production units. Oftentimes the focus is on Ford and non-Ford business, but if we look at the non-Ford business, how would you characterize your present customer mix? Do you consider the underlying businesses of your customers to be particularly strong or is that something that you’d like to diversify yet further in the non-Ford side of the business?

Two points there, one is it’s not really a diversification away from Ford. We would like to grow the Ford business profitably like we would with any customer. So it’s not a diversification away from Ford. We also recognize the fact though that we are underweighted so to speak with some of the other major automotive manufacturers around the world and so certainly we are trying and would like to expand those relationships.

And what might be the top two or three? What’s the best way for you to go about doing that in a general sense? What are those underrepresented OEMs particularly looking for?

I think all the OEMs look for the same thing, quality, delivery, service, cost, technologies and certainly that’s how we’re trying to compete. It is very, very important for us to make sure that any of the new programs that we win are profitable new business, so we don’t compete below that level, so to speak. Also perspective as our quality statistics are showing we are producing a much better product today than we did before. And we continue to drive that down and I expected that we’ll be able to compete with anybody in terms of a quality and a cost perspective if you look at our footprint. Manufacturing and engineering that too from a cost perspective is going to allow us to complete with anybody. So from our perspective or my perspective we’re doing the right things, calling on the customer and just pounding the payment so to speak to win business.

Your next question comes from Patrick Archambault - Goldman Sachs.

Slide 18 where you present the product group results. In electronics can you give us a sense of, does the Q1 impact does it include the impact of the engine electronics de-sourcing from Ford and can you quantify that for us and give us a sense of what offset it to help bring those margins up year-on-year?

The electronics business does include the results of powertrain control modules obviously. So that is a clean stub if you will, with respect to the performance of that product group. They’ve done very well with respect to our material usage and manufacturing efficiencies in the product group. You recall a year ago the first half was very difficult for our electronics business. Concurrently though as we’ve stated as we go into the second half, that powertrain control module business will further exacerbate the results from a sales perspective and then obviously potentially from a margin perspective. That’s part of that closure and divestiture analysis that we are looking at year-over-year. And so again it is clean with respect to what’s going on the top line with respect to powertrain control modules, but as model year changeovers occur in the second half, most notably in North America, it will be pressured.

Can you remind us of what the cash balance was in the US as of the fourth quarter?

As of the fourth quarter the US balance was $1.190.

Your next question comes from Eric Selle – JP Morgan. Eric Selle – JP Morgan: Yes, can we get that cash at the end of the first quarter as well for the U.S. cash while we’re on that topic?

Eric, its $1.060 billion. Eric Selle – JP Morgan: Looking at your non-consolidated net income it looks like you’re almost halfway to your ‘07 number all the way through the first quarter, is that sustainable it looks like it’s growing very rapidly?

Yes, the Asian operations are going very well, the markets continue to grow and our market position in China specifically is quite strong so, yes, we expect it to continue. Eric Selle – JP Morgan: And then further on that subject, as you look at look at YanFeng, how separable is that from your other businesses over there and if you were to decide to sell that does the bank have any claim on that, I know it is not consolidated, so it’s not 25% of EBITDA, could you freely use those proceeds?

YanFeng is the cornerstone of our business in China. So most of the joint ventures we have are under the umbrella of YanFeng, so it is an entity that way. But, it supplies a lot of our customers so to try to carve that out as a separate entity, just wouldn’t make sense for us strategically and it’s a great foundation for us. Don talked about the growth and the various customer mix that we have in Asia. And YanFeng is a key asset that allows us to grow that business with other customers as they in fact expand in Asia or in China. So we look at YanFeng as a very integral part of our strategy today.

And as the customers go more and more towards global platforms and global sourcing, YanFeng is certainly a key component of our ability to compete. Eric Selle – JP Morgan: And then finally just on restructuring charges what are the cash and expenses for the year, do you have those numbers?

Yes, we’ve actually in the non-GAAP reconciliations, Eric. We’ve actually moved it up a bit, we’re looking at restructuring charges and other reimbursable costs for the full year of about $160 million and then reimbursement from the escrow accounted at about 50% obviously, so $80 million for the full-year.

Your next question comes from Adam Plissner - Credit Suisse.

On Slide 17 the disclosure is just a little bit different, when you broke out the currency gain in gross margin of $30 million, I think it was offset a little bit by a negative impact in SG&A, where was that before or maybe you can put in perspective. Were currency gains how big were they in let’s call it overall 2007 and maybe bridge us to your outlook, how much are you viewing this currency gains as the opportunity get you back to breakeven EBIT-R?

Currency, I think prior slides probably was depending on the magnitude of it was counted in our all other pillar if you will and again you are referring to Slide 17, right? So that $30 million for example on that depending on obviously the moves in the various currencies that we operate in and it was probably buried in the all other, but again we are trying to provide transparency with respect to driving the business. If you think about just the Euro if you look at a quarter-over-quarter, the Euro the weighted average a year ago was about $1.31, $1.32 to where it is today. And the Euro moved obviously during the course of 2007 upwards and so we’re probably getting the biggest benefit if you will in the first quarter with respect to currency. And as we go through the rest of the year that benefit year-over-year is not going to be as substantial. As we looked to the rest of the year in the forward rates so on and so forth, we’re marking at about $1.57 right now, but it’s again two fold. Our assumption for 2008 that we shared in January, the year-over-year is already in those numbers as we moved through last fall and probably the largest benefit is in this quarter with respect to currency.

And how about Bill just separately from that, any other let’s call them special items and/or commercial settlements and/or curtailment gains that help us. To let us think about the bridge to your breakeven EBIT-R, what do you include to get there, are there curtailment gains baked into that expectation, and are there special items baked into that? Maybe just to strip out what the core net cost performance benefits are?

And you’ll see as we progress the year and we have talked a bit about it, Adam, previously. As we look at the closure for example Bedford, we have disclosed publicly that that’s going to result in a curtailment gain to us, very similar to the Connersville gain. So if you look at it year-over-year it’s somewhat muting it actually. It will be almost equal quite frankly. It’s about $40 million and that gain will come in during the course of the next two quarters. With respect to that, we are going to continue to have probably some choppiness with respect items that arise from our restructuring, but again I think the largest piece really that we called out publicly is going to be the curtailment gain with respect to Bedford during the course of this year. And probably the last point I want to make is we will have some costs at the back end of the year with respect to further implementation of our overhead cost actions. We talked about that in January. We’ve got about $30 million or so of implementation costs that we spoke of as well as our non-reimbursable restructuring costs.

If I could just summarize, Bill, the $17 million settlement that occurred last year in the first quarter that was a benefit year-over-year this year that carries through. On top of that there is a $40 million curtailment gain that will occur over the next couple of quarters. And then on top of that we’re talking about there are really aren’t any other specific special items?

Adam, yes, but to your point on the curtailment gain, there was a curtailment gain as well in 2007.

So not year-over-year, so that’s flat.

Correct.

Your next question comes from Frank Jarman - Goldman Sachs.

On Slide 4, Ford North America decreased to about 12% of your consolidated sales this quarter. What should we expect to be the future run rate going forward, is there a chance this goes lower through the year and into next year?

Yes. When we look at North America in total we’re down in the 26% range, you get offsets then coming within North America. Don talked about new program launches that come on and so on. But we’ve also publicly said that by 2010 our Ford North America number will drop to about 6% of our revenue and as Don said, we don’t see that continuing. We want to grow that business and grow it profitably with among the three core products that we manage today.

And then on the other cost cutting actions, as you shutdown Bedford this summer, can you give me a sense for what the full run rate savings will be associated with that plant closure?

Yes. Year-over-year, I think we’ve actually publicly said it’s about $40 million with Connersville.

As you think about liquidity, you still do have the 2010 note maturity down the road, any update to your thinking on that and potential to repurchased bond from the open market?

Obviously we have the ability to do that under the term loan and we’re just going to continue to do what we’ve been doing, which is just monitoring the markets. We are really focused on executing our restructuring plan, but obviously we keep an eye on that maturity.

Your next question comes from Derrick Wenger – Jefferies.

When do you plan on filing the Q?

We plan on filing the Q later this week.

Your next question comes from Chester Luy - Barclays Capital.

Can you give us a sense of your distressed supplier cost for the quarter and where you see this trending for the year?

We have talked about this. There has been an ambient level of distressed supplier costs in ‘07 as well as in ‘08. We don’t really have to public disclosure what that is, but it is not that significant quite frankly. Our purchasing groups and our product groups are doing a good job with respect to managing of the supply base and working with the supply base quite frankly. But from that perspective it’s not been something very significant to us at all.

It’s included in the net cost performance.

Yes.

Can you share with us the size of your annual steel and resins purchases and also will you be able to quantify the impact of higher steel prices on the 1Q results?

Yes, steel is not really a significant exposure for us. It is more from a aluminum perspective, on a resin perspective and we’ve not really put out what those exposures would be. We continue to obviously just to work with the customers with respect to what we can do out from a recovery perspective, or a sharing of those costs. But again steel is not the exposure at Visteon.

As you look at your present product portfolio in your three major businesses are you planning to de-emphasize any of these?

No, not at this point in time, we think we have good market positions in all three. We’ve talked about our climate and interiors business being ranked number two in market share. We think we have a great global footprint on those and we’ll continue to grow those, and Don talked about the new business wins. In electronics, there is a number of products within the electronics’ group in driver information, audio infotainment, we have very strong positions in, and we continue to win business there and grow those as well. So we think, we’ve got three products that we can compete globally grow and improve the financial performance of and that is what we are all focused on the execution to accomplish them.

Your last question comes from James Leda - Merrill Lynch.

About 2009 free cash flow guidance, I think you are on the record saying positive maybe 10 plus/minus. Can you just remind us having put that in context are you still comfortable with that guidance and going with it and then rehash for us with the bigger parts of that year-over-year improvement it will be.

In terms of, we are absolutely comfortable to say that free cash flow positive in 2009 and with respect to that just emphasizing year-over-year as we move from ‘08 into ‘09 from a cash flow perspective we highlighted that at the Analy In presentation. Obviously we are going to have an EBIT-R improvement as we move through our restructuring and overhead cost action efforts and it’s about $200 million improvement year-over-year from ‘08 to ‘09, as well as ‘08 is a significant restructuring year from a cash perspective. So if you look at the cash flow ‘08 versus ‘09 we’re not going to have those cash outflows that we expect to have in 2008 as we wrap up most of the actions during the course of 2008. Those really are the big drivers. It’s an improvement in EBIT-R of about $200 million we’ve got some restructuring impact and obviously from an OPEB and pension perspective we are seeing some as well from ‘08 to ‘09. So those really haven’t changed quite frankly as we view the business right now.

Well thank you for participating in today’s call and I’ll be around for the rest of the day to answer your questions.