Good morning. I’m Kris Doyle, Director of Investor Relations for Visteon. Welcome to our Earnings Call for the Third Quarter of 2018. Please note this call is being recorded and all lines have been placed on listen only mode to prevent background noise. Before we begin this morning’s 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 page 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-Q was filed earlier this morning with the news release. Joining us today are Sachin Lawande, President and Chief Executive Officer; and Christian Garcia, Executive Vice President and Chief Financial Officer. We have scheduled the call for one hour, and we will open the lines for your questions after Sachin and Christian’s remarks. Please limit your questions to one question and one follow-up. Again, thank you for joining us. Now I will turn it over to Sachin.

Thank you, Kris, and good morning, everyone. On Page 2 we provide an overview of our results for the third quarter. The Company reported sales of $681 million within adjusted EBITDA margin of 10.4%. The third quarter is seasonally the weakest quarter for the Company due to customer plant shutdowns. However since the last time we talked, automotive sales and production deteriorated across all regions globally in the third quarter, resulting in a year-over-year reduction in Visteon’s sales. I will discuss the industry environment in more detail on the next page. At the same time, our new products and technologies, continue to perform well in generating new business. At the end of the third quarter, our new business wins stand at $5.4 billion and are in-line with our goal of winning about $7 billion for the full-year. Our third quarter new business wins were noteworthy and that they included several key wins for next generation products and technologies. These included the win for an integrated digital cluster and IVI display with the Japanese automaker, a significant display audio win with an European OEM and another win for our SmartCore cockpit domain controller with a leading Chinese vehicle manufacturer. And we will talk more about these wins a bit later. On the capital allocation front we have now completed $250 million in share repurchases year-to-date. It should be noted that we have authorization for an additional 450 million for share repurchases. Our balance sheet remains strong with cash of $442 million and debt of $380 million. Turning to Page 3. The automotive industry experienced several headwinds in the third quarter that resulted in lower vehicle sales and production with the top Visteon customers globally. Some of the signs of slowdown were already visible in the second quarter, but the rapid decline…

Thank you, Sachin, and good morning everyone. On Page 12, we percent our key financial results for 2018 versus the comparable periods in 2017. sales of $681 million in the third quarter decreased $84 million due to lower customer production volumes in all regions. Impact of pricing net of design changes, partially offset by net new launches. Adjusted EBITDA was $71 million, representing a $12 million decrease from third quarter 2017. Adjusted EBITDA was down by 14% compared to last year, resulting from the impact of production volumes and product mix, partially offset by continued operating efficiencies across our organization, as well as lower compensation expense. To mitigate the impact of the industry weakness in our results. We are executing on restructuring program and recognized and $18 million charge in the quarter to aligned our manufacturing cost structure and optimize our engineering footprint. On a year-to-date basis, sales were $2.3 billion, representing a decrease of $96 million. Adjusted EBITDA margins are flat year-over-year despite the decrease in top-line sales. Adjusted free cash flow was negative $42 million in Q3 and positive $35 million year-to-date. Q3 cash flows were impacted by lower adjusted EBITDA, as well as the adverse timing of trade working capital, I will provide more detail on the following pages. Turning to Page 13, we provide sales and adjusted EBITDA for the third quarter and year-to-date for 2018 versus last year. Sales for the quarter were $681 million, 11% lower than 2017, our sales decreased in all regions. The third quarter is typically the seasonally weakest quarter of the year due to normal plant shutdowns in the Americas and Europe exacerbated this year by headwinds in all the regions. In Asia, our domestic China sales were adversely impacted by a rapid and significant decrease in production volumes in…

[Operator Instructions] Your first question comes from the line of Steven Fox with Cross Research.

Hi good morning. I guess first off on the near-term financials. Can you just sort of walk through the decline in the SG&A expense in the quarter and your expectations going forward given the new charges. And longer term, is it possible to talk a little bit about the tie up with Tencent and how that maybe influences your ability to win new programs or is that a little harder to discuss and then I had a quick follow-up.

Okay Steven, this is Christian. I will take the first part of your question and Sachin can talk about the Tencent tie up. It’s good that you asked about the SG&A, it give me the opportunity to provide more color on this. In my prepared remarks I mentioned that our costs included lower compensation expense in the quarter besides some level of savings from our current restructuring program we also had a benefit from reversing the provision relating to our incentive compensation plans and the benefit is around 15 million in the quarter and therefore Q4 would not have that benefit.

Alright thank you Christian and regarding Tencent. Steven this is a phenomenon that we are observing in the Chinese market. As I have mentioned in my remarks, that market is more advanced with this type two connectivity than other parts of the world, and these large ecosystems from Baidu, Alibaba and Tencent are this move to provide access to this ecosystem from within the vehicle. We are working already with Alibaba, this relationship with Tencent broadens our market appeal in China. In this particular case we are integrating Tencent's software on top of our infotainment system which has delivered on top of the SmartCore domain controller platform. We expect that this would be applicable not only to this customer, this first customer that we have, but to be a broadly interesting solution to OEMs that are addressing China. So we are really excited about this collaboration and this relationship.

Great, that’s very helpful and then a quick follow-up. Is there any way to think about working capital serve on a smoothed out basis, whether it's Q3 over Q4 or thinking about what a normalized number looks like under reduced demand conditions?

Alright. So let me take that. So we anticipate that working capital will be a positive contributor for cash flow in the fourth quarter so our inventory turns improve, however we project that our inventory will still be about one turn higher than Q2 levels at the end of the year and one turns is about $15 million worth again this is timing and we should be back at our historical inventory trends by the first quarter of 2019.

Steven even if I may. I just want to complete the picture for our Q4 cash flow. Our EBITDA, full-year guidance indicate a decline in Q4 EBITDA levels from last year and together with a positive contribution from working capital as I mentioned, we should have our Q4 adjusted free cash flow to be about similar to Q4 of last year. So I hope that helps.

No that’s very helpful. Thank you.

And your next question is from Colin Langan with UBS.

Oh great. Thanks for taking my question. Can you talk a bit about the 4.7 billion 2021 target. I think in the past, you have indicated that if you do six billion and when since 2017 and 2018, you would be able to hit that target. It seems like you are ahead of that, but then you are indicating that some of your platforms are down, so next year is not as promise or expecting. I mean is there enough cushions still since you sort of over won that has - 4.7 how should we think about things there?

Hi Colin, yes. So, if you look at where we are at with new business wins of $5.4 billion year-to-date Q3, we are ahead of where we were at the same time last year. But I have to also remind everyone that last year the fourth quarter was a very strong quarter in terms of new business wins. and although from where we stand today the new business pipeline for the fourth quarter is strong and we are cautiously optimistic that we will achieve the $7 billion win target for this year as well. We will have to wait and see how that turns out. As we have said before in the past that we would like to be at over 80% of this 4.7 billion in 2021 number by the end of this year. We will have to see where we are at, at the end of the year, what has happened here in Q3 with respect to the volumes coming down as well as what we expect which is a softer Q4, we will need to factor that into how the forecast would shape up. So we will provide more details in January on that front, there will be some impact, but as we look ahead here and hopefully accomplish some of these goals we have for new business wins in the quarter, we will be able to tell you in a better detail in January where we stand with respect to the 4.7 billion. Anything you would like to add Christian.

No. I just want to reiterate that if we finish the year and our backlog provides us with 80% plus source revenue for 2021, then we should have some confidence around our long-term target.

Okay. Can you talk a bit about the android opportunity that you have on those infotainment systems. How does an android when compared to like a pure Phoenix win or Linux win?

Very good question. Android basically now offers us an alternative for the infotainment operating system and it reduces in some ways our effort and the engineering that we have to put into developing the systems. Android release be onwards have now built in some of this capabilities that were previously lacking in that operating system, that now makes it much more suitable for infotainment. And that allows us to focus more on the value add on top of the operating system when it comes to things such as the user experience, the HMI, speech and smart assistant technologies and so on. So we think that that's a very good thing in terms of just being able to reduce our cost and bring this products to market sooner. A great example is the system that we discussed on the second quarter call where we would be launching the system in high volume in the beginning of 2020, that's a very short development time. If you remember prior discussions in earlier years, infotainment used to take several years to develop and also take a lot of investment in terms of engineering. So we are very optimistic and very positive about this. There is one more thing I would like to add, with the introduction of android and our and our AllGo acquisition that we made in 2016, we are now competitively in a much better position at Visteon than we have ever been in this segment. It does open up as a result more opportunities for us to compete for infotainment business.

I mean, so only think about the margin profile though if you had just a pure - that would be higher margin right there is more of the content you are providing or am I think about that incorrectly.

No. If you look at the way we price these systems, they are not priced separately in terms of the software and the hardware line items, it's a aggregate value, we are not seeing any margin erosion as we go to Android, we are able to protect our margin quite well there.

Got it. And just lastly, any color on the voice recognition. It seems like there is a lot of competition on the tech side and I would say are you partnering with somebody there or is that all just in internally developed and how do you think you are going to be able to back up again some of the large technique.

So we are developing this voice recognition capability in-house, as I mentioned in my remarks the shift towards machine learning also has really opened up a totally different approach to accomplishing voice recognition that does not require the same level of heavy hand coding and engineering and all of that the earlier approach is required. So we are at the same time focusing very closely on the in-car use of speech recognition, we are not going to be replacing systems like Alexa or Google Smart Assistant or Cortana which are more cloud based. This system will enable users to use it for in-car use and then punch through to these cloud system if they need to go to the cloud. So it's a collaborative and co-operative approach with the cloud based smart systems and this is what our car OEMs, our customers have been asking us for. And we do not see yet any third-party solution out there, we think we can implement this capabilities internally, we have been demonstrating these already to some lead customers and the response has been very good.

Okay. Thank you very much.

And your next question is from David Leiker with Baird.

Hi this is Joe Vruwink for David. I wanted to follow-up on the backlog question and this $4.7 billion figure, if I just think about how things have changed, so obviously this year is going to run closer to $3 billion. You said on the last call that in the 2019 you hope to grow, but if you did grow it would maybe be a little bit of growth. So let's simplify it and say 2019 is looking like $3.0 billion. The original plan entailed getting to $3.5 billion in 2019, and so are you able to put just some parameter on the $4.7 billion in the context that it seems like the near-term numbers at least are running maybe $500 million below the original plan. So maybe it’s not $4.7 billion in 2021 but is it $4.2 billion is it $4.0 billion because either of those numbers still imply significant [Technical Difficulty] growth as we get a few years out and I think the market seems to have lost sight of that so any help there?

Yes, let me start and I will let Christian to perhaps expand on it later. First of all, I would say that we are not going to provide any guidance for 2019 on this call and anything specific will be provided on our January discussion. But as we have said before, we expect 2019 to be the final year of transition as we start to see more meaningful growth in sales from the conversion of the backlog and as the old products this roll off starts to then dissipate and we get into a more normal cycle. So post 2019 we do expect to see more significant growth simply based on this new product launches from the backlog. Now based on what has happened as I said before, there is in an impact on the backlog, which has been reflected in the updated backlog figure that were provided where we have marked down some of the backlog due to this reduction in volume forecast. Now that hopefully or some of that at least would be offset by the new business wins that we are hoping to achieve in this quarter and it will also depend when we look at 2021, it will also depend on how we perform with new business wins in 2019. So when we look at all of this, we will be in a better position to say is it $4.7 or is it somewhere around that. But you are absolutely right that we do expect significant growth in those years as the backlog starts to convert into revenue and as the older products that have been phasing out start to be flushed out of the system. Anything you would like to add more than that?

Not really Sachin, but yes just to reiterate, the business provides us with very good visibility on the phase-out of the end of production programs, and we know how that evolves overtime. So that's one point. The second point is that we have stronger than what we anticipated as new business wins. And the question is what volumes would we apply against those new business wins. So you are actually right Joe. We will see an inflection point in 2020 and 2021, whether or not it's $4.7 or something lower we will report back to everybody in January.

Great. And then if I can ask maybe more of a near-term focus question. One thing that definitely impacted revenues this year is your customers are losing share and through no fault of your own, but if they are in the wrong segment or they just have any effective product they are not performing with the industry. At the same time Sachin, I know when you joined Visteon there was a big emphasis to pivot away from some of the legacy programs and really get the business and segment of the market that could outperform longer-term. So as you think about where new business wins has been over the last year, is there a point on the horizon and it could be as soon as 2019 the way things sound where the new business that's launching is in the favorable segments and so this underperformance for your customers should start to improve.

Yes, Joe. If you look at what impacted us in Q3, it has largely been the reduction in volume with our largest customers and this is going to impact us as well in Q4. Now I have always said that in order for us to really grow, we need to build a pipeline this backlog of new business that separates our future from just what the market dynamics imply. Now, we will be still impacted by the market dynamics in 2019 simply because we still have quite a bit of this older product. When I talk about older products these are analog clocks, analog clusters, Bluetooth modules et cetera that are no longer actually used in our new vehicles and these products are being phased out. What is replacing them is product from our 2015 onwards this business that we have been winning and if you look at the $5.4 billion of new business that we won this year 70% of them are these new digital products. When you look at 2019, we will be offsetting with this new products, just impact of the roll-off of older products and that offset and that impact will be much more pronounced in 2020 and going onwards beyond 2020. So to us, 2019 is a transition year, we are very happy with the new business that we are winning which is all in the more emerging areas of the digital cockpit, this is where we expect to see continuous growth. So we are right at this point where we thought we would always be, this reduction in the volumes is something that we have to deal with, this is a result of where we stand with respect to product rolling off and the new product rolling on and we have always said that 2018 and 2019 would be these years that we would be subject more to the market than to what we can do on our own. Beyond on 2019, we expect to be able to grow, is somewhat disconnected from what the market dynamics might imply.

Great. Thank you very much.

And with that, thank you Sachin. Thank you Christian, and thanks again to everyone for participating in today's call and for your ongoing interest in Visteon. If you have any follow-up questions please contact me directly. At this point we will end the call. Thank you.

This concludes Visteon's third quarter 2018 earnings call. You may now disconnect.