VISTEON CORPVC
VISTEON CORP Fair Value Disclosure
Fair Value Measurements
Fair Value Hierarchy
The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs.
•Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
•Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.
•Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy but are included in the total assets for reporting and reconciliation purposes.
The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis are as follows:
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||
| Asset Category: | ||||||||||||||||||||||||||||||||
| Retirement plan assets | $ | 130 | $ | 73 | $ | 21 | $ | 371 | $ | 595 | ||||||||||||||||||||||
| Interest rate swaps | $ | — | $ | 2 | $ | — | $ | — | $ | 2 | ||||||||||||||||||||||
| Liability Category: | ||||||||||||||||||||||||||||||||
| Cross currency swaps | $ | — | $ | 16 | $ | — | $ | — | $ | 16 | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||
| Asset Category: | ||||||||||||||||||||||||||||||||
| Retirement plan assets | $ | 121 | $ | 56 | $ | 18 | $ | 434 | $ | 629 | ||||||||||||||||||||||
| Interest rate swaps | $ | — | $ | 8 | — | — | $ | 8 | ||||||||||||||||||||||||
| Liability Category: | ||||||||||||||||||||||||||||||||
| Cross currency swaps | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | ||||||||||||||||||||||
Cross currency swaps and interest rate swaps are valued using industry-standard models that consider various assumptions, including time value, volatility factors, current market, and contractual prices for the underlying and non-performance risk. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. The carrying amounts of all other non-retirement plan financial instruments approximate their fair values due to their relatively short-term maturities.
Retirement plan assets pertain to a diverse set of securities and investment vehicles held by the Company’s defined benefit pension plans. These assets possess varying fair value measurement attributes such that certain portions are categorized within each level of the fair value hierarchy as based upon the level of observability of the inputs utilized in the valuation of the particular asset. The Company may, as a practical expedient, estimate the fair value of certain investments using NAV of the investment as of the reporting date. This practical expedient generally deals with investments that permit an investor to redeem its investment directly with, or receive distributions from, the investee at times specified in the investee’s governing documents. Examples of these investments (often referred to as alternative investments) may include ownership interests in real assets, certain credit strategies, and hedging and diversifying strategies. They are commonly in the form of limited partnership interests. The Company uses NAV as a practical expedient when valuing investments in alternative asset classes and funds which are a limited partnership or similar investment vehicle.
Derivative financial instruments
Derivative financial instruments are measured at fair value on a recurring basis under an income approach using industry-standard models that consider various assumptions, including time value, volatility factors, current market and contractual prices for the underlying, and non-performance risk. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument or may derived from observable data. Accordingly, the Company's derivative instruments are classified as Level 2, "Other Observable Inputs" in the fair value hierarchy.
Retirement Plan Assets
Retirement plan assets consist of the following:
•Cash and cash equivalents, are immediately available or are highly liquid and not subject to significant market risk. Assets comprised of cash, short-term sovereign debt, or high credit-quality money market securities and instruments held directly by the plan are categorized as Level 1. Assets in a short-term investment fund ("STIF") are categorized as Level 2. Cash and cash equivalent assets denominated in currencies other than the U.S. dollar are reflected in U.S. dollar terms at the exchange rate prevailing at the balance sheet dates.
•Treasury and government securities consist of debt securities issued by the U.S. and non-U.S. sovereign governments and agencies, thereof. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 1
while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are categorized as Level 2.
•Corporate debt securities consist of fixed income securities issued by corporations. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 2 while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are categorized as Level 2.
•Bond funds are comprised of corporate and municipal bonds. These securities are generally priced by independent pricing services. The spreads are sourced from broker/dealers, trade prices and the new issue market. As the significant inputs used to price corporate bonds are observable market inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy.
•Common and preferred stocks consist of shares of equity securities. These are directly-held assets that are generally publicly traded in regulated markets that provide readily available market prices and are categorized as Level 1.
•Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds, including equities and fixed income securities, are generally publicly traded in regulated markets that provide readily available market prices. The entire balance of an investment in a common trust fund that does not have a readily observable market prices as available on a third-party information source, notwithstanding whether the investment has daily liquidity, is categorized as Level 2; or the fund is considered as an alternative strategy (including hedge and diversifying strategies) for which valuation is established by NAV as a practical expedient.
•Liability Driven Investments (“LDI”) utilizes certain funds that invest in instruments and securities, interest-rate swaps and other financial derivative instruments intended to hedge a portion of the changes in pension liabilities associated with changes in the actuarial discount rate as applied to the plan’s liabilities. The valuation methodology of the funds that invest in fixed income derivative instruments, the assets contained in this category utilize standard pricing models associated with fixed income derivative instruments and are categorized as Level 2.
•Repurchase agreements represent the plans’ short-term borrowing to hedge against interest rate and inflation risks. The plans have an obligation to return the cash after the term of the agreements. Due to the short-term nature of the agreements, the outstanding balance of the obligation approximates fair value. These borrowings are categorized as Level 2.
•Other investment funds include funds that hold various short-term, real-estate related, and fixed income assets and are categorized as Level 1, Level 2, and NAV, consistent with the valuation techniques of investment funds described above.
•Limited partnerships and hedge funds represent investment vehicles with underlying exposures in alternative credit, hedge and diversifying strategies (including hedge fund of funds), real assets, and certain equity exposures. The underlying assets in these funds may include securities transacted in active markets as well as other assets that have values less readily observable and may require valuation techniques that require inputs that are not readily observable. Investment in these funds may be subject to a specific notice period prior to the intended transaction date. In addition, transactions in these funds may require longer settlement terms than traditional mutual funds. These assets are valued based on their respective NAV as a practical expedient to estimate fair value due to the absence of readily available market prices.
•Insurance contracts are reported at cash surrender value and have significant unobservable inputs and are categorized as Level 3.
The fair values of the Company’s U.S. retirement plan assets are as follows:
| (In millions) | December 31, 2025 | |||||||||||||||||||||||||
| Asset Category | Level 1 | Level 2 | NAV | Total | ||||||||||||||||||||||
| Common trust funds | $ | — | $ | — | $ | 133 | $ | 133 | ||||||||||||||||||
| LDI | — | 47 | — | 47 | ||||||||||||||||||||||
| Limited partnerships and hedge funds | — | — | 207 | 207 | ||||||||||||||||||||||
| Cash and cash equivalents | — | 30 | — | 30 | ||||||||||||||||||||||
Total | $ | — | $ | 77 | $ | 340 | $ | 417 | ||||||||||||||||||
| (In millions) | December 31, 2024 | |||||||||||||||||||||||||
| Asset Category | Level 1 | Level 2 | NAV | Total | ||||||||||||||||||||||
| Common trust funds | $ | — | $ | — | $ | 310 | $ | 310 | ||||||||||||||||||
| LDI | — | 56 | — | 56 | ||||||||||||||||||||||
| Limited partnerships and hedge funds | — | — | 89 | 89 | ||||||||||||||||||||||
| Cash and cash equivalents | — | 17 | — | 17 | ||||||||||||||||||||||
Total | $ | — | $ | 73 | $ | 399 | $ | 472 | ||||||||||||||||||
The fair values of the Company’s Non-U.S. retirement plan assets are as follows:
| (In millions) | December 31, 2025 | |||||||||||||||||||||||||||||||
| Asset Category | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||
| Treasury and government securities | $ | 121 | $ | 14 | $ | — | $ | — | $ | 135 | ||||||||||||||||||||||
| Insurance contracts | — | — | 21 | — | 21 | |||||||||||||||||||||||||||
| Bond funds | — | 26 | — | — | 26 | |||||||||||||||||||||||||||
| Limited partnerships | — | — | — | 13 | 13 | |||||||||||||||||||||||||||
| Corporate debt securities | — | 5 | — | — | 5 | |||||||||||||||||||||||||||
| Common and preferred stock | 4 | — | — | — | 4 | |||||||||||||||||||||||||||
| Cash and cash equivalents | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
| Repurchase agreements | — | (60) | — | — | (60) | |||||||||||||||||||||||||||
| Other investment funds | 4 | 11 | — | 18 | 33 | |||||||||||||||||||||||||||
Total | $ | 130 | $ | (4) | $ | 21 | $ | 31 | $ | 178 | ||||||||||||||||||||||
| (In millions) | December 31, 2024 | |||||||||||||||||||||||||||||||
| Asset Category | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||||||||||||||
| Treasury and government securities | $ | 114 | $ | 10 | $ | — | $ | — | $ | 124 | ||||||||||||||||||||||
| Bond funds | — | 16 | — | — | 16 | |||||||||||||||||||||||||||
| Insurance contracts | — | — | 18 | — | 18 | |||||||||||||||||||||||||||
| Limited partnerships | — | — | — | 12 | 12 | |||||||||||||||||||||||||||
| Corporate debt securities | — | 6 | — | — | 6 | |||||||||||||||||||||||||||
| Common and preferred stock | 3 | — | — | — | 3 | |||||||||||||||||||||||||||
| Cash and cash equivalents | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
| Repurchase agreements | — | (67) | — | — | (67) | |||||||||||||||||||||||||||
| Other investment funds | 3 | 18 | — | 23 | 44 | |||||||||||||||||||||||||||
Total | $ | 121 | $ | (17) | $ | 18 | $ | 35 | $ | 157 | ||||||||||||||||||||||
Items Measured at Fair Value on a Non-recurring Basis
The Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy.
The Company evaluates its long-lived assets for impairment whenever events or circumstances indicate the value of these long-lived asset groups are not recoverable.
No impairment charges were recorded for the years ended December 31, 2025 and 2024.
Fair Value of Debt
The fair value of debt was $304 million and $319 million as of December 31, 2025 and 2024, respectively. Fair value estimates were based on quoted market prices or current rates for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Accordingly, the Company's debt is classified as Level 1 "Market Prices" and Level 2 "Other Observable Inputs" in the fair value hierarchy.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 25, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.