Good morning, and welcome to Visteon's Fourth Quarter and Full Year 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 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 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, Brent. Good morning, everyone. Joining me today are Visteon's President and Chief Executive Officer, Tim Leuliette; 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 fourth quarter and full year 2014 results. We have scheduled the meeting for an hour, and we'll open the lines for your questions after Tim and Jeff's remarks. [Operator Instructions] As previously mentioned, the presentation deck associated with today's call is posted on visteon.com within the Investors section. Also note that our Form 10-K was filed earlier this morning with the news release. Again, thank you for joining us. And now I will turn it over to Tim.

Thank you, Bob, and welcome, everyone. We have a lot to talk about today. So let's quickly move to the slide material, Page 2. To start off, as we looked at Q4 and we looked at the overall year, we have a continual focus obviously on shareholder value. In December, we did announce the sale of HVCC for $3.6 billion. We'll expand a bit about, both the tax and the proceeds issue as we get through this material, both of which we'll give you some greater granularity and detail as we go forward. And then obviously, we also completed the divestiture of a majority of our Interiors business. There's still some components remaining as we go through the process of the final closure with the buyer, but again that's now getting behind us. As we looked at the year from a financial perspective, it was a good year. Sales were $7.5 billion and EBITDA of $678 million, excluding the discontinued operations. I will say that in Q4, both Electronics and Corporate expenses were better than planned and better than our guidance that we gave earlier in the year, but they were more than offset by some exchange and operating performance at HVCC. But as we looked at Electronics and the Corporate expense as a basis for going into 2015, it did give us encouragement. We had adjusted free cash flow of $111 million. We had a record new business win and rewin in Electronics of $1.3 billion. I think as we've discussed before, there's been significant customer -- positive customer reaction to the combination of the 2 businesses. And we had a strong balance sheet at the end of December 31. Cash of $836 million, debt of $981 million. And as I said, a good leverage. As we look at…

Thanks, Tim. Good morning, everyone. I'll begin my comments on Page 16 of the package. Here, we present our key financial results for the fourth quarter and full year 2014. As we explained in previous calls, we have reclassified the majority of our Interiors business to discontinued operations in our financial statements. Our income statement has been adjusted to exclude Interiors specific income and expense, and Interiors net profit has been reflected on one line as discontinued operations. As we have explained on prior calls, our financial results are also 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 U.S. GAAP financials in the attached appendix on Pages 31 through 33. Additionally, year-over-year comparisons are impacted by a number of transactions, including the consolidation of our Yanfeng Visteon Electronics operations starting in November 2013, the acquisition of Johnson Controls Electronics business in July 2014, the acquisition of Cooper Standard's Thermal & Emissions division in August 2014, and the sale of the majority of our Interiors business in Q4 2014. These transactions have resulted in significant year-over-year changes in sales, adjusted gross margin, adjusted SG&A, adjusted EBITDA and cash flow. Adjusted EBITDA, excluding discontinued operations, was $200 million in the quarter and $678 million for the full year, $36 million and $96 million better than last year. The year-over-year increases reflect the impacts of the YFVE and JCI Electronics acquisition. Versus our guidance, we were within the range of expectations, but on the lower side. Specifically, this represented better-than-expected results from our Electronics operation as well as better-than-expected cost management within our corporate center, but was offset by lower…

Thank you, Tim and Jeff. Brent, please open the lines for questions.

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

I actually just had several questions on Slide 5. I just wanted to make sure I understand that. One, can you just clarify to make sure I'm looking at this right, that if you wait to 2016, you're essentially saving about $1 billion in terms of what is taxable. So there's obviously an incentive to wait for a special dividend in '16? And secondly, how should we think about buyback tenders in that context? Would you be willing to do those before a special dividend? And then just any general thoughts on why the emphasis on special dividend, I mean, versus a large buyback or a tender.

Sure. Your first question relating to delaying to 2016 is true point. If we paid a dividend in 2015 versus 2016, there's approximately $1 billion difference between what would be counted as return on capital versus qualified dividend. So obviously, I think as we look at that and we think and we set a target to return capital within 12 months of closing, it makes sense to think of, at least, a reasonable portion of that dividend to be perhaps in the January period of 2016. As we look at share buybacks, to the degree we do share buybacks, as we always said, we'll be looking at the price where our stock is trading and making sure we're doing economical events for our shareholders, and also understanding that we have a significant amount of cash relative to our market value. And we certainly need to be cautious about paying premiums for our cash position. But we'll be looking at that and making further announcements as we get to close. But over the course of that 12 months following close, we do plan to return that bandwidth between $2.5 billion and $2.75 billion of capital back to the shareholders either by the form of share buybacks or dividends, with a preference again for dividends, more likely in early 2016 period to reflect the tax difference.

I think, Colin, to look at that in a different way. Think of those as thresholds of what we have to get to the point of -- on the dividend side before you get to the point where you could start seeing it as the return of capital. Exactly the balance of where we come out on that will be a function of what Jeff has just said as we ascertain where we stand with the share prices and what other options that we have. But think of those numbers as thresholds for which we would have to achieve. And I think that is an important ingredient into why we have talked about, as Jeff said, the 12-month forecast because I think the difference, the delta, in that threshold is -- has implications and is something that we clearly are keeping in the mind because, as I said, we are as concerned about the tax impact to the shareholders as we are to the tax impact to the company.

Got it. And when we look at guidance, it remains unchanged. Has that been updated for the latest currency assumptions? Or is there any change in the underlying currency guidance?

If -- our guidance reflects the currency assumptions that we have today, we haven't changed it for currency. We acknowledge and understand the currency environment for which we deal, and we have reaffirmed revenue and EBITDA, and increased free cash flow in that environment.

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

Just to follow-on to that question. If I'm doing the math right based off of the guidance that you guys offered at the Detroit Auto Show, the implied delta in the underlying currency is somewhere between $20 million to $30 million headwind if we based -- if we adjust base rates. And I know that there's been other things that you've discovered within the organization as you've sort of proceeded through. I'm just wondering if you might share some of the bigger items that would act as offsets to that currency headwind.

Yes, Matt, a couple of things. One is the -- we do still have a hedge. Our hedges in place help mitigate some of that amount a little bit more. But you're right that -- we had talked about a $10 million headwind when we were at the Deutsche Bank at the current spot rates. You could probably say that, that's probably close to double if you held the current spot rates through the year. As we look at -- and I should say it does help us in some other areas. The lower euro will certainly help us in some of our restructuring charges. It will certainly help us on the disposition of our remaining Interiors asset in Europe. It will help us on some of our CapEx that's not dollar based. But overall, it does prevent -- or present some headwind. I think as we look at our operations, I think we have opportunities to continue to drive the overall business. The actual operating plan is one part. Our SG&A cost reductions, Tim talked about little bit earlier, are another area such that, at this point, as we're -- certainly, currency, as you know, plays a key role for us. But as we look at all of those factors today, we looked at it and we're still comfortable with the $240 million.

Okay. And the other questions on the euro Interior business. Where is the unfunded level of that pension today after year-end remeasurements?

Yes, if you looked at our balance sheet, it's somewhere close to $200 million at the end of 2014. And that's up a reasonable amount from where it was the year before, probably up about 1/3 from where it was before.

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

Just had actually a long-term margin question around Electronics. If I look at 2018, it looks like you're just above 10% in your guidance. Some of the peers in the group seem to be, at least, projecting higher margins. So hopefully we can talk a little bit about maybe margin by product group or by region and what the impact is as you continue to grow your backlog with some of the new technologies and secular trends in the industry. How should we think about the progression of that margin in the next several years?

Good question. We're obviously cognizant of the fact that -- again, this gets back to part of our SG&A discussion of the fact that we still have expenses and cost that preclude us from being at peer level. So you've got both of -- you've got an element there. We also have -- we're pleased with the margins on the new products -- programs that have been awarded. We see that as being an increase in the overall margin as those businesses roll through. But I think net-net-net, we, as the year will progress, we'll start talking more about margin targets and margin improvements as we go out, and we clearly got to be more above the 10% range than we are. I think the issue of getting these transactions behind us and making sure that we get our cost base done internally and in the proper balance is the beginning of that process, but we're seeing improvements on the factory floor. As you'll recall, if you go back and study, we had some pretty good margins developing on the Visteon Electronics side where we embedded the JCI asset. To some degree, they had lower margins. And it is going to take a while for those to work through the process. But net-net-net, we should be north of 10% clearly. And we'll outline a game plan as the year progresses of how to achieve that.

And just one other dynamic as you look at the numbers, Itay. Our engineering expense, and this is an engineering-led business. Our engineering expense, we generally expense when incurred. And we expensed -- and usually we have heightened amount of engineering activity a couple of years before programs launch. So as you look farther out past 2018, 2019, 2020, we have a lot of new growth coming. And thus, we have a larger amount of engineering expense to fund that growth a couple of years before, which does impact our EBITDA margin as well. So as -- if growth would ever tail off, you'd actually also see a higher impact on EBITDA margin.

I think one of the metrics that impacts that, some sort of insight, is that on a $3.2 billion business, you win $1.3 billion of business in 1 year, you then, obviously, translates to some engineering effort and work. And we'll probably have something of similar nature this year. So we are -- to further adjust comments, living in an environment of significant growth as the decade rolls out and paying for it today, and we do expense most of that through the P&L.

That's very, very helpful. My quick follow-up, anything you can offer in terms of cadence commentary around particularly the Electronics business in 2015?

With respect to?

Just margins essentially, just kind of normal seasonality or any...

You mean [indiscernible]?

Quarter-to-quarter.

Quarter-to-quarter.

Exactly, yes.

You'll have a higher margin. It goes still with sales. So usually, Q2 is probably higher sales. As you look at Q3, it's a bit of a lower sales period because of shutdowns, so it does impact the margins. So generally, the first half of the year has a bit more revenue. The thing that will be a little different for us this year is some of the synergies we have from the transaction are dependent upon us moving our IT systems and a number of other implementation activities, which are really starting to complete themselves in the second half of this year. So you'll see normal operating seasonality sort of impacts, benefiting the first half of the year, and you'll see some of the synergies benefiting the later half of the year.

Yes. And some additional granularity, we receive about 25% of our gross engineering spend back from customers. So net, it's about 9%, 9.5%; gross, about 12%, 12.5% or so. And as you look at that on average -- as you look at that, we try to recover that on a quarter-by-quarter basis and try to homogenize it over the year. But no matter what we do, we end up getting a disproportionate amount typically in the fourth quarter. So the fourth quarter tends to be a little bit overstated at times because of recoveries. So we'll give greater granularity as we go forward. But this year is going to be a tough one for you guys to model. I understand where you want to go. Just understand this, that Q3 is, my experience, typically, since I've been in this chair is that Q3 is typically overstated and Q4 is understated for the same part of your modeling just because of the balance of the dynamics I just mentioned.

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

It's actually Steven Hempel on for Brian Johnson. Just a question, I guess, to follow up on Itay's, just to kind of put it in a little bit different way. As we look at Electronics organic growth, it looks like it was down a little bit here in 4Q. I guess, a, what were the major drivers there on 4Q? And then how should we think about the cadence of organic growth through 2015?

Yes, I think one of the elements, and we talked about this in the last call, was that a lot of our organic growth in Electronics has always been in the YFVE segment or business, I should say. Remember that was essentially an entity controlled but not consolidated by Visteon prior to the transactions we did in the fourth quarter of 2013. And a lot of the business that launched this year and last year related to business that were won -- that was won while we were all recovering from the financial crisis a few years back. And that business, it was easier to put more volume into -- we tended to put a lot of volume in there, and that was one of the reasons we wanted to get that consolidation in. So I think a lot of our organic business growth had been put there. I think as we look forward, I think a couple of things on organic, just sort of the growth curve. We also talked about the JCI business. The former JCI business had a relatively flat profile over the next couple of few years through 2017, '18. The Visteon business, including YFVE had a, I will say, a more beneficial growth profile, and it factors into about that 5% or so rate we talked about at Deutsche Bank. As we looked beyond 2018, the new business that we won, let's say, in 2014, the $1.3 billion or so we talked about earlier with $800 million of new business as well as business we'll win in 2015, et cetera, should help fuel more organic growth. But those 2 factors, probably JCI and the YFVE, hopefully, answer your question.

Yes, if you go to Page 10, and this is a reiteration of what we gave at the auto conference, is that we don't expect significant revenue CAGR over the short term because of the elements that Jeff just mentioned, the JCI issue, primarily being one of that as far as it being in purgatory during the '12, '13 time frame, and now that's impacting their growth. But we see this significant growth coming business awards that was mentioned. But we don't anticipate a significant sales revenue CAGR until you get to the '18 timeframe and beyond. But we do anticipate significant a EBITDA CAGR. And so that's just a cycle of business, and that's just a function of what we inherited when we purchased it, and we understood that when we got in.

Okay. And then just a follow-up here. In terms of -- I mean, if you look at Slide 14, you're saying you're valuing potential value-creating M&A opportunities, I assume that's most likely for Electronics you're moving forward. I'd guess are you more interested in M&A now versus maybe a quarter ago? What's the maybe potential size of potential M&A moving forward? And then in relation to that, as Visteon is basically a stand-alone Electronics company now moving forward, any interest from other companies moving forward, kind of provide an update on that as well?

Well, I think our appetite to do the kinds of things we like in that space hasn't changed. I think we have constantly looked at putting investments into software companies, typically smaller, as a result of -- we like to find companies in more of a start-up phase or early phase for which we can gain some technology. Obviously, we're always open to opportunities that make sense. We've got some, obviously, capability in our balance sheet. But at this point, there's no major acquisition on the table that we're thinking about. And we're happy with the business we've got. We're happy with the order book we've got. And we're happy with, as I say, the business backlog. And we've got a lot to execute in '15, so that's sort of the primary focus.

Okay. So not a lot of interest right now from other companies in terms of Visteon as being a stand-alone electronics?

Well, that's not the kind of stuff that we would comment on if it was true or not true. I mean, the issue is, is that we've got a business that we're very proud of, and we're proceeding accordingly. We envision ourselves as one of the small, little consolidators in this market. We may not be as large as some, but in the segment we're in, we're a very dominant force. And we're acting accordingly.

Your final question comes from the line of Ryan Brinkman with JPMorgan. Ryan J. Brinkman - JP Morgan Chase & Co, Research Division: Great to see the higher HVCC proceeds. I'm just curious whether you've had any preliminary discussions with the IRS about how much of a special dividend could be considered a tax-free return of capital? How do you think those discussions are progressing? And what actually drives their determination? And how can we think at this stage about the potential range of what could be considered a tax-free return?

Ryan, it's Jeff. I guess, I'll refer you back to Slide 5. Have we had conversations? We've done quite a bit of work around this. There's more work to do, and that's why we provided the range you see on Page 5. So the reality here is the nuances of the rules, the first thing that you do when you're looking at your earnings and profit is you take your current year earnings and profit. Obviously in 2015, we'll have a very large earnings and profit number because of the impact or the gain on the HVCC sale. Thus, if we pay a dividend or a distribution in 2015, we're going to, first, have to pay through the gain effectively on the HVCC transaction. So we've estimated that to be between $1.5 billion and $2 billion. And it will be -- anything over that amount -- and we're working to narrow that range with discussions and a lot of work. But anything over that amount would be a return of basis. Anything under that amount would be a qualified dividend. If we wait to 2016, because we don't have any operations in the U.S, the current E&P of 2016 is expected to essentially be close to 0 or maybe slightly negative in the U.S. So then we would look at our cumulative E&P -- and because we have a large NOL and other things in the past, it brings the amount down by about $1 billion, such that anything between $0.5 billion and $1 billion -- and we're, again, working to refine that range, anything up to that amount would be a qualified dividend. Anything more than that amount would be return on capital. And we'll continue to peel that onion back as we go forward and get closer to close.

As we said, we would be much more definitive and specific, when we come to the transaction close, as we lay out the game plan. But we wanted to, at least, make the shareholders aware of the calculus of the different tax years and the kind of issues that we're dealing as we prepare the plan. Ryan J. Brinkman - JP Morgan Chase & Co, Research Division: That's very helpful. And my follow-up is just there's a lot of moving pieces with the pension this quarter. Can you give us like just an updated, I guess, end-of-year net underfunding pro forma for both Interiors and HVCC? Like what should we have in our model going forward?

This is roughly about right, Ryan, and you have to look through the numbers. But I think the U.S. pension liability underfunded amount is about $188 million. I mentioned the legacy Interiors operation is close to $200 million. And then I think the remaining amount of pension has a certain piece relating to HVCC and a certain piece relating to, we'll say, the new Visteon. And I think that piece relating to the new Visteon is about $69 million. As you go forward, all that is being calculated just from an awareness -- at least, on the U.S. piece, if you go back to the U.S., it's being calculated on a 4% discount rate, which is, obviously, a bit lower than we were at the end of 2013. We used closer to 4.75% rate there. If the U.S. rate was increased to something like 5.5%, give or take, the U.S. underfunded amount would go away.

Okay. I want to thank you all for joining us today and appreciate your support of the company. Let me turn it back to Bob.

Okay. Thank you very much, Brent. I'd like to thank everyone for their participation in today's call. If you have any additional questions, please feel free to contact me at your convenience. And I'll just turn it back over to Tim for some final comments.

So again, we've had a tremendous, I think, year of shareholder value creation. We have a lot of tools in our toolbox to sort of continue that process in 2015. There'll be some -- obviously, once the shareholder -- special shareholder meeting is accomplished, and we proceed with the sale of HVCC, we will give you much more definitive details with respect to the granularity of the return of proceeds. But at this point, we're pleased to say with the work that the tax people have done and others is that we're now approaching about a 4% net tax rate eventually on the HVCC proceeds, which is a very positive event. We'll continue to work that. And we're going to continue to grow Electronics business which again is getting good customer reaction. So again, thank you for your support through the year, and we look forward to a prosperous and good 2015. Thank you.