Visteon Announces Completion of Independent Accounting Review
October 21 2005 - 4:45PM
PR Newswire (US)
- Results of independent review consistent with preliminary
conclusions announced August 1, 2005 - Restatement of 2004, 2003
and 2002 expected to increase net loss by about 3%, 2% and 4%,
respectively - Plan to complete updated SEC filings in Fourth
Quarter 2005 VAN BUREN TOWNSHIP, Mich., Oct. 21
/PRNewswire-FirstCall/ -- Visteon Corporation (NYSE:VC) today
announced that the Audit Committee of its Board of Directors has
completed its independent review of the accounting for certain
transactions relating to the company's North American purchasing
group. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO ) As
previously reported, the Audit Committee -- which retained Paul,
Weiss, Rifkind, Wharton & Garrison LLP, as outside counsel, who
retained Navigant Consulting, as forensic accountants -- determined
that certain expenses for freight, raw materials and other supplier
costs originating in North America were recorded in periods after
December 31, 2004, and should have been recorded in prior periods;
the company's management has concurred in that determination. Based
on the results of this review, the company concluded that its
financial statements for the years ended December 31, 2004, 2003
and 2002 included in its 2004 Form 10-K (and the related 2004
Management Report on Internal Control Over Financial Reporting)
should no longer be relied upon, and that restatements will be
required for these periods. The company estimates that the
restatements to correct these errors and other identified
adjustments will increase Visteon's previously reported $1.499
billion after-tax net loss for 2004 by $35-40 million, or
approximately 3 percent; its previously reported after-tax net loss
of $1.207 billion for 2003 by $20-25 million, or approximately 2
percent; and its previously reported after-tax net loss of $368
million for 2002 by $10-15 million, or approximately 4 percent.
Visteon is assessing the impact of these corrections and other
adjustments on previously announced financial results for 2005 and
will include the results of that assessment in the company's
quarterly reports on Form 10-Q for 2005. Visteon plans to complete
its review of the proposed adjustments to facilitate the filing of
restated quarterly and annual financial results for 2004, 2003 and
2002, to be included in an amended 2004 annual report on Form 10-K
and quarterly reports on Form 10-Q for 2005, with the SEC in the
fourth quarter of 2005. Although management has not completed its
analysis of the impact of the matters noted on its internal
controls over financial reporting, management expects that there
are one or more material weaknesses (as defined by the Public
Company Accounting Oversight Board's Auditing Standard No. 2) as of
December 31, 2004, in addition to those previously reported. The
Audit Committee's independent review has also determined that many
of the accounting errors resulted principally from improper conduct
on the part of two former, non-executive finance employees
responsible for the accounting oversight of these matters, and
specifically from the periodic setting of accruals for freight
expenses at inadequate levels, as well as delays in the processing
of freight payments and raw material price increases without
adequate consideration of applicable accounting standards. Visteon
Corporation is a leading global automotive supplier that designs,
engineers and manufactures innovative climate, interior, electronic
and lighting products for vehicle manufacturers, and also provides
a range of products and services to aftermarket customers. With
corporate offices in Van Buren Township, Mich. (U.S.); Shanghai,
China; and Kerpen, Germany; the company has more than 170
facilities in 24 countries and employs approximately 50,000 people.
This press release 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 forward-looking
statements, including the automotive vehicle production volumes and
schedules of our customers, and in particular Ford's North American
vehicle production volumes; our ability to satisfy our future
capital and liquidity requirements and comply with the terms of our
credit agreements; the company's failure to make timely filings
with the SEC; the financial distress of our suppliers; our ability
to implement, and realize the anticipated benefits of,
restructuring and other cost-reduction initiatives and our
successful execution of internal performance plans and other
productivity efforts; charges resulting from restructurings,
employee reductions, acquisitions or dispositions; our ability to
offset or recover significant material surcharges; the effect of
pension and other post- employment benefit obligations; as well as
those factors identified in our filings with the SEC (including our
Annual Report on Form 10-K for the year- ended December 31, 2004).
We assume no obligation to update these forward- looking
statements. http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO
DATASOURCE: Visteon Corporation CONTACT: Media Inquiries: Jim
Fisher, +1-734-710-5557, or Investor Inquiries: Derek Fiebig,
+1-734-710-5800, both of Visteon Corporation Web site:
http://www.visteon.com/
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