Financial Overview

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Overall
Sales	7,509	6,371	17.9	1)
Net Income	(295)	690	-	-
Sales by Segment
Climate	5,092	4,871	4.5	2)
Electronics	2,386	1,455	64.0	3)

Factors
1) Net Sales
-The Company's sales for the fiscal year ended December 31, 2014 increased by 17.9% over the previous year to USD 7,509 million. Sales increases of USD 665 million and USD 291 million were gained from the acquisition of Johnson Controls' electronics business and acquisition of a controlling interest in Yanfeng Visteon Electronics Co., Ltd., respectively. Additionally, product mix, and currency effects all increased sales.

2) Climate
-Sales for the Company's Climate segment in the fiscal year ended December 31, 2014 were 4.5% higher than the previous year, reaching USD 5,092 million. Higher production volumes in Asia and Europe contributed towards a USD 262 million increase in sales, while favorable currency effects caused an increase of USD 19 million. A decrease of USD 60 million was caused by lowered prices on the segment's products.

3) Electronics
-In the fiscal year ended December 31, 2014, the Company's Electronics had sales of USD 2,386 million, an increase of 64.0% over the previous year. The main causes for the increase in sales was due to the acquisition of Johnson Controls' electronics business, which increased sales by USD 665 million, and the acquisition of a controlling interest in Yanfeng Visteon Electronics Co., Ltd., causing a sales increase of 291 million. Larger production volumes also increased sales by USD 15 million. These gains were partially offset by unfavorable currency effects and lowered product prices.

Restructuring

<Climate>
Agreement to divest Halla Visteon Climate Control Corporation
-The Company announced that it has entered into an agreement to sell its approximately 70% ownership interest in Halla Visteon Climate Control Corp. (HVCC) to an affiliate of Hahn & Company – a South Korea-based private equity company – and Hankook Tire Co. Ltd. for approximately USD 3.6 billion. The transaction is expected to be completed in the first half of 2015. (From a press release on December 17, 2014)

<Interiors/Other>
Divestiture of Interiors operations in India
-The Company has completed the sale of its Interiors operations in India to Reydel Automotive Holdings B.V. The transaction is part of the previously announced divestiture of the majority of the Company's interiors business to Reydel. Other interiors transaction closings with Reydel are expected to be completed by the end of the first half of 2015. The India interiors operations sold to Reydel include all manufacturing operations in Pune and the Company's interiors business in Chennai, although the Company retains the Chennai facility itself. The operations sold to Reydel have approximately 550 employees and produce instrument and door panels, floor consoles and other plastic trim parts. (From a press release on December 1, 2014)

Divestiture of Interiors operations in Europe, Asia and South America
-On November 1, the Company completed the first and largest phase of the sale of its remaining automotive interiors business to Reydel Automotive Holdings B.V., an affiliate of Cerberus Capital Management, L.P. The series of transaction closings with Reydel are expected to continue through the end of the first quarter of 2015. The operations being sold supply vehicle manufacturers with products including cockpit modules, instrument panels, door panels, floor consoles and custom products. Revenues of the divested operations totaled approximately USD 1 billion in 2013. The operations consist of 17 manufacturing facilities, six just-in-time assembly plants and eight engineering centers in Europe, Asia and South America. Approximately 5,000 manufacturing, engineering and administrative employees are part of the interiors business involved in the transaction. (From a press release on November 3, 2014)

Divestiture of Interiors joint venture in Korea, Duckyang Industry Co., Ltd.
-The Company announced that it completed the divestiture of its 50% ownership stake in a Korean automotive interiors joint venture, Duckyang Industry Co., Ltd., to certain management shareholders and associated parties. The transaction was valued at USD 24.1 million. (From a press release on May 2, 2014)

Acquisitions

<Climate>
-Halla Visteon Climate Control Corp. announced that it has completed the acquisition of the automotive thermal and emissions product line of Cooper-Standard Automotive Inc., a subsidiary of Cooper-Standard Holdings Inc., in a cash transaction valued at USD 46 million. Products acquired include exhaust gas recirculation modules (EGRs), electronic coolant pumps and valves, electronic wastegate actuators and electronic throttle bodies. (From a press release on August 1, 2014)

-Halla Visteon Climate Control Corp. (HVCC) announced that it has reached an agreement to acquire an ownership stake in Jie Xi Si (Nanjing) Automotive Climate Control Co., Ltd., a subsidiary of Japan Climate Systems, of 51% and become the majority shareholder. The cash transaction, valued at USD 6.4 million, is expected to be complete in the third quarter of 2014. Jie Xi Si (Nanjing) Automotive Climate Control Co., Ltd. manufactures heat exchangers for automotive applications. Japan Climate Systems currently has an ownership structure evenly distributed among HVCC, Mazda and Panasonic. (From a press release on June 3, 2014)

<Electronics>
-The Company announced that it has completed the acquisition of the automotive electronics business of Johnson Controls Inc. Plans for the USD 265 million cash transaction were announced in January 2014. Johnson Controls electronics operations provide automakers with driver information, infotainment, connectivity and body electronics products. The transaction involves about 5,000 employees, including approximately 1,000 engineers, electronics specialists and designers in Europe, Asia and North America. With the acquisition, the Company's new electronics business has 24 manufacturing locations, eight global technical centers and about 10,500 employees worldwide. (From a press release on July 1, 2014)

-Johnson Controls Asia Holdings Co., Ltd., will transfer its entire 50% share it holds in its joint venture with Changchun Faway Automobile Components Co. Ltd., to the Company. With the completion of the transaction, 50% of Changchun Faway Johnson Controls Automotive Electronics will be owned each by Changchun Faway and the Company. (From an announcement by the company on June 13, 2014)

Contracts

-The Company announced that it is presenting its infotainment systems and tablet display featured on Mazda's cross-vehicle line including the Mazda2, Mazda3 and Mazda at Electronica 2014 in Munich, Germany. (From a press release on November 12, 2014)
>>>Mazda3 infotainment system exhibited at 2014 ITS World Congress Detroit

-The Company has been awarded the first production program for its Fusion connected platform by a major European automaker. The vehicle line is expected to launch in 2018. Fusion is a highly innovative solution combining traditional driver information, infotainment and Cloud connectivity into one connected platform, offering drivers and passengers a seamless human machine interaction experience. (From a press release on November 10, 2014)

-The Company is debuting its first-to-market wireless charging system with General Motors. This solution uses inductive coupling technology to support both wireless charging standards – Power Matters Alliance (PMA)/Powermat and Wireless Power Consortium (WPC)/Qi. The system was designed so that it can be integrated into a number of locations within the cockpit, such as the center console or an area in the instrument panel. Cadillac is featuring it on the 2015 ATS, and will add it to the CTS sports sedan this fall and Escalade SUV at the end of 2014. (From a press release on August 28, 2014)

-Halla Visteon Climate Control Corp. (HVCC) is supplying an array of technologies to support the world's first mass-produced hydrogen fuel cell electric vehicle manufactured by Hyundai Motor Group. Introduced in Europe in 2013, the ix35, also known as the Tucson, is slated for a limited U.S. distribution in spring 2014. Products supplied by HVCC on the Tucson compact crossover SUV include a centrifugal air compressor, coolant heater, high-voltage cooling module and positive temperature coefficient heater, and an HVAC system with an electric compressor. (From a press release on February 21, 2014)

-The Company has been awarded the first production program for its OpenAir I1.1 infotainment product by an Asian automaker. The vehicle line is expected to launch in the second half of 2015, targeted for Southeast Asia, South Africa, South America, Middle East and East Europe markets. Visteon's OpenAir I1.1 entry-level infotainment product provides flexible in-vehicle connectivity and an advanced entertainment solution. The application features a 7-inch touch display, high-quality audio, navigation and multi-device connectivity to deliver apps, features and media streaming. Internet access enables download of cloud-based and local content as well as over-the-air system updates. (From a press release on February 20, 2014)
>>>OpenAir infotainment system exhibited at 2014 ITS World Congress Detroit

Outlook

-For the fiscal year ending December 31, 2015, the Company expects to have sales of USD 3.3 billion and an adjusted EBITDA of USD 240 million.

-For the fiscal year ending December 31, 2018, the Company expects to have sales of USD 3.7 billion and an adjusted EBITDA of USD 335 million.

Awards

-Major awards the Company received in 2014 are as follows:

Receiving Company	Awarding Company	Award
Halla Visteon Climate Control Corp.	Fiat-Chrysler	2013 Supplier of the Year (Electrical export category)
Halla Visteon Climate Control Corp.	Volvo Cars	Quality Excellence Award (VQE Award)
Halla Visteon Russia	Renault-AvtoVAZ	Quality Performance Award

R&D Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	446	325	299

-After its restructuring, the Company expects to budget approximately 12% to 12.5% of its sales for research and development spending.

R&D Facilities

Climate	Electronics
-Daejeon, Korea -Kerpen, Germany -Bhiwadi, India -Hiroshima, Japan -Rayon, Thailand -Van Buren, Michigan, U.S.	-Van Buren, Michigan, U.S. -Chelmsford, UK -Shanghai, China -Chennai, India -Hiroshima, Japan -Rayon, Thailand

-The Company unveiled a new Innovation Center at the global automotive supplier's corporate headquarters in Van Buren Township, Michigan, U.S. The 7,600-square-foot facility combines a technology showroom with a conferencing area, design studio, collaboration space and "experience lab" – aimed at fostering creativity and teamwork in delivering new products and solutions for automakers. (From a press release on April 2, 2014)

Technological Alliance

-The Company and Rightware, a leader in user interaction (UI) design and benchmarking software, have extended their collaboration to a strategic partnership to deliver UI and graphics solutions for the automotive industry. The two companies will provide vehicle manufacturers with industry-leading human machine interaction solutions using high-definition 3D graphic rendering technologies, capable of delivering photorealistic graphics in various configurations inside the vehicle. The partners recently launched the first reconfigurable cluster program incorporating the Kanzi UI solution with a North American vehicle manufacturer. Further programs are under development for key European manufacturers. (From a press release on December 29, 2014)

-The Company and Autonet Mobile, Inc., an internet-based telematics and apps service provider, have entered into an exclusive agreement for the Company to integrate Autonet's telematics technology into the Company's next-generation products for automakers. Both parties will work together to provide vehicle manufacturers with a complete end-to-end software and app platform, designed to integrate with vehicle electrical architectures and networks, to enable new vehicle features. The solution incorporates a telematics control unit, OS software, apps and technical support. Under the agreement, the Company will lead design and integration efforts with automakers and Autonet Mobile will provide software, Internet Protocol and network operation services. The Company expects to begin manufacturing for various vehicle manufacturers in the second half of 2014. (From a press release on February 24, 2014)

-The Company and OpenSynergy, a Germany-based software company specializing in embedded automotive systems, announced a strategic alliance to advance the integration of consumer electronics in automotive infotainment applications. Together, the two companies will develop standards-based infotainment solutions that bridge the gap between open source In-Vehicle Infotainment applications and the "closed" automotive domain. The alliance's first collaboration incorporates OpenSynergy's COQOS operating system in the Company's OpenAir I1.2 infotainment platform, introducing virtualization technology in the Company's latest range of infotainment products. (From a press release on February 21, 2014)

Product Development

In-vehicle 4G LTE telematics system with Wi-Fi hotspot
-The Company has developed a demonstration vehicle equipped with a 4G LTE Telematics System with Wi-Fi Hotspot. This global product reduces manufacturing complexity as it is built on a single hardware architecture. Developed in partnership with Autonet Mobile, the system incorporates not only a telematics control unit, but OS software, apps and cloud services for a complete end-to-end solution. The Company's Telematics System provides infotainment services for all vehicle occupants to access local and cloud content through the Wi-Fi hotspot or 4G LTE network. Premium telematics services connect the vehicle to mobile devices and the Internet to enable remote diagnostics, remote commands and concierge apps. (From a press release on June 2, 2014)
>>>4G LTE global telematics system exhibited at 2014 ITS World Congress Detroit

Horizon cockpit concept
-The Company has developed the Horizon cockpit concept, a new automotive cockpit concept that combines three emerging technologies to transform the way a driver controls features such as interior temperature, audio and navigation.

• Gesture control – An advanced camera system maps the user's hand to replicate a virtual hand on the center stack. Horizon drivers can then easily operate certain vehicle controls simply by moving their hand or just a finger, without making contact with the instrument cluster. 
• Virtual touch screen – By integrating a pressure-sensitive touch pad, drivers can operate center stack controls without having to physically reach for them. 
• Dual-layered display – High-resolution graphics present information on two separate planes, bringing only those controls with which the driver is interacting to the forefront. (From a press release on May 14, 2014)

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Climate	215	187	152
Electronics	87	46	23
Other*	31	35	45
Corporate	7	1	9
Total	340	269	229

*Capital expenditures include amounts attributable to discontinued operations which are reported under Other.

Investments Outside U.S.

<Czech Republic>
-Halla Visteon Climate Control Corp. (HVCC) has announced the opening of a new production hall at its Halla Visteon Autopal, s.r.o. manufacturing facility in Hluk, Czech Republic. The expansion will increase the plant's capacity by approximately 30% by adding an additional 7,330 square meters of manufacturing space to the existing 37,230 square meters of floor space. Production is scheduled to begin in the first quarter of 2015. This is the second expansion at Hluk since HVCC's establishment in 2013. Employing approximately 450 people, the plant in Hluk produces powertrain cooling components including air- and water-cooled charge air coolers, low-temperature radiators and exhaust gas recirculation (EGR) coolers, for major European automakers. (From a press release on November 4, 2014)

<Mexico>
-Halla Visteon Climate Control Corp. (HVCC), plans to start production in September 2014 at a new plant, Climate Systems Mexicana, S.A. de C.V., in central Mexico. The plant will support its growing business with global vehicle manufacturers in the region. The new manufacturing facility in Queretaro will manufacture automotive heating, ventilation and air conditioning units for automakers. Production capacity is initially expected to be over 260,000 units annually, with the capability to expand to over 500,000 units annually. HVCC currently has three wholly owned manufacturing operations in Ciudad Juarez. (From a press release on September 12, 2014)

<Brazil>
-Halla Visteon Climate Control Corp. announced the opening of its first manufacturing facility in South America. The new plant in Atibaia, Sao Paulo, Brazil, HVCC Climatizacoes do Brasil Industria e Comercio Ltda., assembles heating, ventilation and air conditioning components for regional automakers. The facility has 3,000 square meters of manufacturing space, with room for expansion based on future needs. Production began in early June, with an initial staff of 40 employees. (From a press release on August 13, 2014)