Good morning. I am Bob Krakowiak, Vice President, Treasurer and Investor Relations for Visteon. Welcome to our fourth quarter and full year 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'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 information for further details. Presentation materials for today's call were posted on the Investors section of Visteon's website this morning. Please visit www.visteon.com/earnings to download the material, if you have not already done so. Our Form 10-K was filed earlier this morning with the news release. Joining us today are Sachin Lawande, President and Chief Executive Officer; and Jeff Stafeil, Executive Vice President and Chief Financial Officer. We have scheduled the meeting for an hour and we'll open the lines to your questions after Sachin and Jeff's remarks. Please limit your question to one question and one follow-up. We appreciate your interest in our company, and again thank you for joining us. Now, I will turn it over to Sachin.

Thanks, Bob, and good morning, everyone. Earlier this morning we released strong results for the fourth quarter and full year. This caps a very successful 2015 for Visteon, a year in which our company executed well and essentially completed our transformation to a focused automotive cockpit electronics company. On Page 2, let me briefly cover our consolidated 2015 results, which includes our other product group. Sales were $3.245 billion. Adjusted EBITDA was $282 million with a margin of 8.7%. Cash from operations was $338 million with adjusted free cash flow of $311 million. Our adjusted earnings per share for 2015 was $2.81. Our yearend balance sheet was strong, with cash of $2.783 billion and debt of $384 million. Looking at our 2015 results for our ongoing electronics business and corporate, we had sales of $3.107 billion. Adjusted EBITDA was $294 million with a margin of 9.5%. We generated $251 million in cash from operations with adjusted free cash flow of $212 million. Our business backlog is strong, $15.2 billion as of December 31, which is up 8% from a year ago. In 2015, our strong execution led to dramatically improved results and increasing estimates throughout the year. We highlighted that progression at the bottom of the slide. Page 3 provides a summary of key financial metrics for both the fourth quarter and full year 2015 compared to 2014. Fourth quarter sales on a constant currency basis increased 10%. This improvement reflected higher production volumes as well as an increase in new business launches in 2015, which I will discuss later in more detail. On a full year basis, excluding the impact of JCI, sales increased 8% year-over-year on a constant currency basis. Fourth quarter adjusted EBITDA of $83 million was $25 million higher than fourth quarter 2014 adjusted EBITDA of…

Thanks, Sachin. On Slide 13, we present our key financial results for the fourth quarter and full year 2015 versus the comparable periods in 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 appendix on Pages 25 through 33. As we have also explained previously, we have reclassified the majority of our climate and interiors business as discontinued operations in our financial statements. As a result, our income statement has been adjusted to exclude both climate and interior-specific income and expense. Climate and interior's 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 for consolidated Visteon. Adjusted EBITDA was $79 million in the quarter compared to $75 million for the same period last year. Adjusted EBITDA for electronics and corporate only was $83 million, $25 million higher than fourth quarter 2014. The $25 million year-over-year increase largely reflects increased production volumes, including new business and favorable cost performance, including synergies related to the JCI electronics acquisition. Adjusted free cash flow was $62 million in the quarter, $15 million higher than the same period last year. Adjusted free cash flow for electronics and corporate was $66 million. On a full year basis, electronics sales were $3.107 billion, approximately equal to our guidance of $3.1 billion. Electronics and corporate adjusted EBITDA was $294 million, at the high end of our guidance of $285 million to $295 million. Electronics and…

Thanks, Jeff. In closing, I would like to reiterate that we are very pleased with our accomplishments for continuing operations in the fourth quarter and for the full year 2015. Key highlights are; we created significant shareholder value in 2015, despite unfavorable currency. We also generated meaningful free cash flow. We attained the upper range of targeted synergies related to the JCI electronics acquisition two years earlier than originally anticipated. We returned $500 million of capital to shareholders. Earlier this year we paid a $1.75 billion special cash distribution to shareholders, and we have authorized an additional $500 million of share repurchases. We see opportunity to further improve margins and enhance our capital structure, and we are confident this will drive value in the short term. Longer term, we will drive growth by leveraging our position as the only global Tier 1 supplier solely focused on cockpit electronics and by capitalizing on customer and geographic expansion. We value and appreciate the trust you've placed in Visteon in 2015. We worked extremely hard to reward your trust and the result was a very strong year for Visteon. I assure you the entire Visteon team is committed to continuing to deliver value to you and to our customers in the coming year. Thanks for joining us today. Now, I would like to open up the call for any questions.

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

This is Eddie on for Colin. Thanks for taking our question. I just had two margin related questions. First, what is your updated view of future SG&A as a percent of sales? And do you think you can get this to the 5% to 5.5% range at the top quartile of suppliers? And how could you achieve this reduction?

Sorry. Would you like to finish your question?

Just the second question is, just, do you expect any additional synergies left from JCI electronics? And what's your timeframe for integrating these?

Let me address the question first, and then I'll hand it over to Jeff for more color. We have made tremendous progress in our cost controls here. We are driving a culture of continuous improvement in this company. So in our continuing business we have achieved a SG&A of 7.3%, which I am very happy to see the progress from previous year. And our guidance for 2016 I think implies something like 6.3% of SG&A. We do see opportunities to take some cost out, but we also believe we can hold our costs. And as sales increases, we definitely will see the benefits of that leverage. So with that, let me hand it over to Jeff and see if he can add any more color to it.

Eddie, if you look back to our conference materials that we gave at the Barclays Conference in November of last year, I think there was Page 22, we provided a forecast going out a few years as well as the long-term target. It shows the 6.3%, that Sachin mentioned, for 2016 going to 5.9% by 2018 with a long-term target of 5.2%, which gets us at the top quartile of the peer group. So as Sachin mentioned, we've had a lot of efforts here focused on bringing down our SG&A. We've had a fair amount of success in 2015 and see some opportunity certainly as we go forward.

And with respect to the second part of the question on the synergies, at this point we don't really separate our business between JCI and Visteon. It's all one Visteon now. We continue to see opportunities to take, again, the cost out and drive that continually towards the benchmarks that we are setting for ourselves. So the margins that we have discussed previously for '16 and also for the outer years, we are confident that we can deliver those, given where we stand and our understanding of what we can do with respect to the cost levels in the business.

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

Just looking at the breakdown of your business by product area, thanks for providing that, on the right-hand side of page 6. How do you envision this changing going forward three, five years out, et cetera? And can you talk about the relative growth opportunities for the different categories and remind us when you aggregate it all up, what type of CAGR can it result in? And then, if you were to achieve faster than your targeted organic growth, which of these products areas do you think would be most likely responsible for that upside?

Good question. Look, we are really here focused on the near-term opportunities presented by this connected car trend. And as we have said before, we are one of the few companies that actually have all of the products that are needed for modern vehicles. So going forward we do expect to continue to have a really good business in our stronger segments such as instrument clusters, but the opportunities are in the faster-growing segments such as infotainment. And here in infotainment, we have talked about this before as well, we have an initiative to develop a new infotainment solution that addresses a couple of the more significant trends that the industry faces today. Those are cyber security, and turning this infotainment platform into an open application environment that allows OEMs and third parties to develop and deploy applications. As vehicles get connected, there is a tremendous need and demand for being able to deliver apps at a frequency that is higher than what the industry can do today. So those are the main product segments that I expect that will constitute majority of our business going forward. With respect to the growth in the CAGR, we have talked about previously, also at Baird and I think also at the later Deutsche Bank conference, we have said that we expect our CAGR in the midterm to be somewhere on the 7% level. And I do see upside if we can execute our plans on infotainment that I just mentioned to you previously.

Okay, thanks. And then can you discuss too whether there is any significant margin differential across those different product categories, if there's room for improvement in one area or more than another? I'm thinking just maybe perhaps, as you gain scale in infotainment or telematics.

Definitely. So margin improvements will offer, to be honest with you, across most of our product categories. Out of the six products that we have, a good four out of the six are seeing an ASP increase primarily on account of additional content going in, mostly in the form of software. So we expect to be able to drive margins also higher there. There are a couple of product areas that are transitioning. Audio product line is transitioning into display audio and that presents an opportunity also to expand our margins. But margin expansion here at Visteon will also come largely through benefits of scale, so that's what we are really focused on driving. We are at a point where our incremental margin, we have talked about it as twice our current EBITDA level and so that's what will probably make the biggest impact as we grow our business. And as you have seen, our backlog performance, our new business wins performance in 2015 is pointing to an arrow that's pointing upwards in terms of our future scale. And so that should help drive margins as well.

Last question just on China on Page 9. I see you're expecting 5.4% higher production there in 2016. That's in line with IHS. But I'm just curious about your personal view in Visteon's extensive operations there, your long history of operating in China, do you see upside or downside to those estimates? And then the strong sales we have now, when is that pulling from, in your personal view? Is that back half of this year or does it remain strong until the incentives expire at the end of the year?

A good question also. Look, we are extremely well-positioned in China, as we have made that point a couple of times already. With the joint venture partnerships that we have that gives us just great access to most of the car manufacturers. What I would say here is that our business in China in 2016 will be driven more by new product launches than by production volume. A significant number of the product launches that we have indicated in this deck actually came in China. And although production volumes growth matters a lot, and we are certainly hoping that the 5.4% level that is predicted by IHS comes through, for us new product launches will be more significant than production volume itself. We hope to be able to see the growth. Even though the production may dampen some of that growth, it will still be a good growth. And as per your question regarding whether the sales are being pulled, it's hard to tell. It's just one month of data in the year that we have. January was reasonably good, and so I think we'll need to wait out a little bit more before we can say what's going to happen for the rest of the year.

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

Want to back up a little bit more to kind of some of the strategic product trends that you kind of talked about on the launch page. In particular you mentioned one program, I believe it was the Chevy Sail, not positive, that had a kind of integrated Android Auto, Apple CarPlay, Baidu center screen system. Is that a midrange system? Would you call that an upper range system? And then where do you see that going? And within the backlog you've outlined, how much more of that business is there?

It's a great question. We are very happy about that win because it really showcases our infotainment capabilities. Specifically to answer your question, I would say that it is a midline infotainment system, but it's a very rich midline infotainment system. It has virtually all of the capabilities for the high end with the exception of, I would say, multi-user multi-display capabilities. And where we see this go is the following: we see that this industry is going to evolve into two segments for infotainment; what we internally here refer to as display audio, which is essentially your AM/FM radio with multimedia capabilities; all of the phone integration technologies, CarPlay, CarLife, Android Auto; and in some cases, embedded navigation, but in vast majority of the case without embedded navigation. So that's one cluster of products that we see quite a bit of activity in. The second category is the mid-to-high. At this point in time what I would say is that we have excellent capabilities, very cost-competitive solutions at the mid-level, but we are tooling ourselves to be able to also address the opportunities in the high. And the two trends that I mentioned from a technology and the market-need viewpoint, those being cyber security and open application environment are the ones that are truly creating new opportunities, sort of leveling the playing field and it's requiring all of us to rebuild the systems. I can give you more color if you want on this, but let me see if we can [multiple speakers] call.

Well, that's the direction I want to go, because I guess -- so I guess what you're saying is Apple CarPlay, Android Auto, Baidu, that would be, what, lower-mid? And then with embedded connectivity and open applications, that would be upper-mid, is that --?

Yes. So you saw how the market used to look like before, so we had a radio and then we had entry, mid, and high in infotainment. And the entry is essentially being replaced by this display audio product that is driven largely by the smart phone integration technologies. And the mid-to-high, what we are sensing is that that's collapsing very quickly. With the exception of, let's say, a few luxury OEMs that still need a very high-end solution, that is collapsing more into a upper-mid rather than this three distinct segments that we used to have before. So from our viewpoint, we are building two platforms to be able to be extremely competitive in the display audio segment, which will be, in our viewpoint, the higher volume opportunity. And then the upper-mid, which will deliver virtually as good a solution as you can imagine for infotainment needs without perhaps necessarily addressing the needs of the very top-end luxury OEMs, which I will be, at this stage, looking at it from a very tactical opportunity viewpoint. That's not where the volume is, that's not where the margins will be for us in the future.

And if you think about that lower-mid versus upper-mid versus, of course, the rest of cockpit electronics, how does that roughly breakout within the $15.2 billion booking backlog?

So I would say, infotainment in total is roughly about 15% of our backlog today and growing. As I've mentioned earlier, that's an area where we expect to see more growth than perhaps our other segments.

And how about in terms of pipeline activity? I guess, I'm a bit curious as when can we expect to see a significant volume of kind of upper-mid coming online?

So I'll just give you some view into our fourth quarter new business wins. So we had $1.2 billion of new awards, very happy about that performance. I think the team did a great job of overall $4.3 billion. But if you look at the $1.2 billion, these were really driven by some very large awards, one of which was in infotainment system, pretty much what I just talked about with a European OEM. And so that's a good indicator of how we are seeing our pipeline starting to fill up with this kind of product. We had a few audio wins, again, one with European OEM, the other with the Japanese, and a high cluster award with the European OEM. So I think the pipeline activities are doing well for us, but we are really just starting out. I think this new platform that we are talking about will also create a lot of positive momentum for us, but that is going to happen a little bit later in the year.

And then, finally, is that the type of product that the new acquisition fits into support?

Absolutely. The reason we did that is because we really wanted to strengthen our software capabilities. And it's for two reasons, one, to really deliver a great technical solution, but also to control our costs with respect to product launches. We had 59 product launches in the year, which is pretty high for a company of our size. And as you know, your profitability can be hugely impacted by things such as software development. And how we control the costs and how we deliver good quality within costs is a big part of your operational excellence. So we are really focused on that. We will do this both organically, as well as inorganically to ensure that we have the capabilities that we need to be able to deliver the programs, as well as build the technologies that we need to be stronger in the future.

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

Just when I think about kind of long-term growth for Visteon, I think clearly one of the opportunities you have is to grow with certain OEMs that maybe are sort of small in terms of the customer list. And it looks like in your bookings disclosure, GM is up bout 15%, which looks significantly higher than what GM has been historically for you for revenues. So can you maybe talk a little bit about what happened there, the success behind kind of growing that automaker into your new business backlog and the opportunity you may have with other automakers to -- maybe what the process is like to go from maybe a smaller revenue share to a higher booking share, as you appear to do with GM?

Sure. So specifically with respect to GM, I think this was one of the outcomes of JCI's business being in the state that it was in prior to the acquisition. There was a lot of uncertainty. And as we have been able to build confidence after the acquisition with the customer base, that we are really focusing on technologies, we are focusing on this space of the automotive industry, we are starting to see the market respond to our products, our capabilities. I would expect that we would continue to grow our business with the selected, the top four or five OEMs, that we would really like to drive our footprint even wider within those accounts. But it is a very competitive industry, it's a very difficult and challenging environment, so I do not want to take anything away. It's not going to be easy, but I believe with our focus, and in particular, our technology capabilities that we are really pulling forward here at Visteon. It will continue to give us these opportunities to grow within, one, the customers that we have, but also through business development and get into some of these accounts where we have previously not been present in. so we have, for example, out of CES a tremendous amount of momentum that we are still following up on. As we speak, we have our team visiting about six OEMs in Japan this week and next week. And there's a tremendous amount of interest in our capabilities. There's a lot of interest, particularly in SmartCore, we won't really have much to talk about on this call, but I can assure you that there's a lot of business development activity happening in that direction that, hopefully, in the near future we will be able to talk publicly about. So overall, given where we are at in the last seven, eight months that I have been now here, I am pretty happy with how the market has been responding to our strategy, the products and the technologies that we have chosen to focus on. And there's definitely momentum, as also indicated, for the new business wins and the performance in that area.

Maybe just a follow-up with the financial question. Clearly, the electronics margin is exiting 2015 at a strong pace. Maybe just two questions. First, can you talk a little bit about the sequential drivers of gross margin performance? I think you went from 13.5% in electronics to over 15% in Q4. I know it's early in the year, but second question is, kind of what are some of the factors you think on the margin side for 2016 that could cause you to be more at the lower end versus the higher end of that range, given your exit rate in the fourth quarter?

Maybe I'll take the second question first and I'll also invite Jeff to talk about it to give more color. But in terms of our range for 2016, again, we don't want to get too far ahead of ourselves. We want to make sure that we have, as we have talked about it, I think, in our comments, we have 61 launches planned for '16. And when we talk about launches at their scale you also want to be very cautious about your ability or engineering capability to deliver on it. We are doing a couple of things in parallel. We are focusing on our costs, in some cases taking costs out, adjusting our engineering footprint to be able to be more cost effective. So I shouldn't say that we are very confident, but we're confident in delivering our margins that we have talked about for 2016. For the sequential growth in the margins, let me hand it over to Jeff to maybe provide a little bit more color there.

Itay, the biggest driver you're going to see is the synergies as it relates to the JCI acquisition. As we said, we were on the high end of delivering our range, and we delivered it in 2015 of $70 million. That was offset a little bit by foreign currency. If you look a year ago, you had, what, $1.26 on the euro and this year it was $1.09 or so, so that hurt. But at the same time, all those synergies and improvements we had from the JCI acquisition and also just good performance across the board helped us improve the margin year-over-year.

Your next question comes from the line of David Leiker with Robert W. Baird.

This is Joe Vruwink for David. I will start with a similar margin question, but I just wanted to get some more color on the business equation contribution in the EBITDA walk, the $48 million for the full year. So I would think of that as 2% of sales, which means before price, you're probably generating gross savings of 4% to 5%. Is that a sustainable number? Are there some synergies caught up in there, so it's maybe a bit elevated? What would maybe be a normal level of gross savings activity?

So let me ask Jeff to take this question.

Yes. Joe, there's a lot of things in there, as you can guess. The savings and the improvements we had year over year in the electronics business were driven quite significantly by the JCI synergies. If you look year-over-year, we were $123 million higher. Last year only at have half a year of JCI, so you have to account for that. But really the majority of what you're seeing in the $123 million was great synergy performance, which is coming through in that business equation line. What we have always said, and I think the guidance we have going forward is, the electronics business benefits is somewhat attractive here, as we obviously give price concessions to our customers every year. But between what we're able to save on the factory floor, what we're able to save in the material savings, et cetera, we're able to offset that. And we think with SG&A performance and engineering performance we should be able to grow margin in line to what we've showed at your conference at Baird in early November and the Barclays conference thereafter. Improving that margin, sort of getting up to where we see our peer group is up towards the 12% range. So we do see some marginal improvements there, but 2015 was a special year because of the JCI acquisition.

And then I wanted to dig in a bit on your BMW cluster award. So it's normal for BMW to take what they have on their marquee 7 Series and then migrate that throughout the lineup, which it looks like Visteon is seeing the benefits of that strategy just given the awards you announced. But I really was interested in getting your bigger picture thoughts on what it means that Visteon is winning this business at a German premium brand, BMW, when, quite frankly, it would seem like two of your strongest cluster competitors are two German suppliers that typically have commanded that cluster space with those automakers.

Great question, Joe, because what this really means is that our high-end cluster technologies are extremely attractive to that market. As you know, BMW is one of the drivers of technology in this space and it is a validation of our technical capabilities. We have always said that we have been one of the leaders. In fact, in terms of volume at the high-end of the cluster business, we definitely, even today, are the leaders in that space. So what this represents is the fact that we have a very competitive offering at the high end. And just to go back a little bit on what's happening in that segment, so similar to what has happened in infotainment, our clusters have always had this entry, mid, and high segment, and much of the volume today is in the mid and some lower volumes in the high. Where we see this go in the future is that the volume in the high will see highest growth. Volumes in the entry, which is still driven largely by gauges, will start to reduce and the mid segment of the market will have modest growth. So we are putting a lot of our new technology development initiatives and investments in ensuring that our position in the high end of our instrument cluster business remains strong and the BMW launch is a proof point for that strategy.

And does that sort of win at high-end cluster carry some sort of gravitas with other premium brands? I noticed within your backlog the German automakers are a bigger contribution than they represent of your actual sales today, so it seemed like you are picking up business at the German premium segment, but does it carry across to other products or the non-German premium brands?

Yes, we do see that. What that represents is that transition that is happening right now from, let me say, a hybrid cluster with displays and gauges to more and more fully-digital clusters. That's the trend we are on and that's the big, big trend in that space. It's, again, starting with the German OEMs and it's migrating to other OEMs as we speak. So you're right; that's exactly what we are seeing happen in this industry.

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

So just a question on, we have the AllGo acquisition pending here and I know you want to focus on closing that. But if we think out longer term, are there other assets or asset types that are of interest to you in terms of kind of these sub-segments that you talk about where you would focus on future acquisitions?

Yes, so our strategy is very clear and we are extremely focused on it. And that is to focus on the near-term opportunities that are presented by the connected car trend and then also keep an eye on how we can really play effectively in the autonomous driving technology space. As you know, Visteon has not been a part of that dialogue, but that doesn't mean that we can continue to ignore it. So what we have been focusing on right now in the acquisition of AllGo and what that really helps is in strengthening our capabilities in the connected car space. In that space, I do not expect to need further capabilities brought in inorganically. I think we are in a pretty good shape there, but we are continuing to investigate and understand this autonomous driving space, being extremely careful and selective about where we think we can play and where we think we can have that white space that allows us to create intellectual property and a differentiation for Visteon. A good example of that is the V2X technology that we have talked about previously as well, but we are extending our investigations beyond that. I would not like to say a whole lot more on this call on that front, but other than that we are paying attention to it and there might be some opportunities in that space that we might be talking about in the future. So that's how I see it. The focus is pretty clear in the immediate term. There's a lot of work to be done to emerge as leaders in the connected car space and also plant the seeds for our future success in the autonomous driving space.

Brent, we've got time for one more question.

Your final question will come from the line of David Lim with Wells Fargo Securities.

Just quickly on the 2016 revenue guidance, can you sort of dimension the walk between currency launches and volume? And then I have one follow-up after that.

Jeff, would you like to take that one?

Yes. I think, David, currency is a drag, starting there. We have -- I think we said something around $30 million or so is going to be a currency drag between the two years. The remaining piece should be launches in excess of the price productivity that we would give to customers.

And then, Sachin, a little bit more on the infotainment side, the GM win. Can that translate into other GM volume and maybe even -- I know that HARMAN has been talking about their GM business in the mid-to-high. Can you sort of couch how all of this sort of falls into shape, given that it is GM China, but just wanted to better understand that dynamic?

Yes, I was about to clarify. This is GM China and there is definitely opportunity to take this across other car platforms within GM China. In fact, that's the plan at the company in China. Just to be clear, HARMAN's business with GM is for the global platforms; it doesn't apply to all platforms. There are certain platforms that are really driven by the specific organization in the geography. So with GM China we believe we have a good opportunity to expand this business beyond what we have won to date. End of Q&A