For the first nine months of 1999, net income was $640 million, up 11 percent from 1998. Revenue for the first nine months was $14.4 billion, up 9 percent. After-tax return on sales for the first nine months of 1999 was 4.5 percent, up from 4.3 percent.
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Photo: Automotive Intelligence

Craig H. Muhlhauser at the Frankfurt International Motorshow

"Visteon's reputation as a world-class systems supplier is growing in every automotive market," said Craig H. Muhlhauser, president, Visteon Automotive Systems. "We are building an outstanding portfolio of innovative technologies and breakthrough systems solutions by listening to the needs of consumers. In a recent survey, automotive executives named Visteon the world's leading systems integrator, best body exterior supplier and best supplier of transmission and drivetrain systems. Visteon's Superintegration(TM), an innovative technology destined to define the future of automotive design, and its Voice Technology are preeminent in the industry.

Visteon showcased a number of its consumer-driven technology systems -- including Superintegration(TM) and Voice Technology – at last month's Frankfurt Motor Show. Other leading-edge products and partnerships highlighting Visteon's technology and consumer focus at the show were: Visteon's night visibility system; ICES, Visteon's Information, Communication, Entertainment, Safety and Security in-car computing platform; the NavMate(R) navigation system; the in-dash 6 CD radio; the European Rear Seat Entertainment System; and partnerships with Nintendo, 3Com and Bang & Olufsen.

During third quarter 1999, Ford recognized a $125 million after-tax charge resulting from actuarial valuations of post-retirement health care and life insurance benefits for certain Visteon operations. Visteon retroactively reflected this adjustment in its historical financial statements.

"Lear is ready for the new millennium and any indication to the contrary is erroneous and without merit," said Lear Chief Information Officer and Vice President - Information Technology John Crary. "All of the company's business critical elements involving information technology - including manufacturing site computer systems – were completed and tested as of September 30, 1999. "Lear launched its Y2K readiness effort in 1996 and also was an early and active participant in the development of the Y2K program guidelines established by the Automotive Industry Action Group (AIAG), the independent organization that is directing the industry's Y2K preparedness strategy," Crary said. "Lear has played an ongoing leadership role in the AIAG's Y2K effort and Jim Lloyd, Lear Vice President - Information Technology, currently serves as AIAG Chairman of the Board.

Lear's Information Technology staff members have been a part of the Y2K teams assembled by each of the global automotive manufacturers that make up Lear's customer base, traveling to Lear plant sites around the world to validate the company's readiness. Lear also has been instrumental in monitoring the Y2K compliance of the company's supply base.

Propelled by strong North American volumes and continued increases in sales to customers other than General Motors, Delphi Automotive Systems today reported earnings of $136 million, or $0.24 per share on a diluted basis. "The third quarter is typically a challenging period for us," said Delphi Chairman, Chief Executive Officer and President J.T. Battenberg III. "This year, despite the usual production changes for the new model year and the seasonality of OEM schedules, we were able to post very solid results. These results reflect the continued strong North American vehicle market as well as increases in sales to customers other than GM."

The $136 million in third-quarter net income compares to a pro forma, strike-impacted third quarter 1998 loss of $214 million, or ($0.38) per share on a diluted basis. Sales revenue of $6.8 billion was up 18 percent over strike-impacted 1998 levels after adjusting for the impact of businesses divested in late 1998. Sales to customers other than GM totaled $1.7 billion for the quarter, climbing 16 percent on a comparable basis.

The increased sales revenue is largely the result of new Delphi content on several vehicle models that went into production this quarter. Importantly, the third quarter marked the start of production of the 2000 Fiat Punto featuring Delphi's E-STEER(TM) Electric Power Steering system, several Volkswagen models featuring Delphi's Monsoon(TM) audio system, the 2000 Land Rover Discovery featuring Delphi's Dynamic Body Control system, and the 2000 Jaguar XKR sports coupe featuring Delphi's FOREWARN(TM) Adaptive Cruise Control system.

Balance Sheet/Cash Generation

Delphi generated $484 million in operating cash flow during the quarter, primarily driven by improvements in working capital and the high cash content of earnings. This continued strong cash generation allowed Delphi to make a pension contribution of $300 million, bringing the total voluntary pension contributions for the year to $900 million.

The Delphi Board of Directors also announced a regular quarterly dividend of $0.07 per share on Delphi $0.01 par value common stock. The dividend is payable October 18, 1999, to shareholders of record as of September 20, 1999.

New Business Bookings

In line with the company's objective of diversifying its customer base, Delphi booked new business totaling $2 billion with customers other than GM. In addition, the company booked $8 billion of new business with its largest customer, GM. The impact of this new business will be reflected in Delphi's revenues in the years 2001 and beyond, over an average five-year contract life.

In addition, Delphi yesterday announced it signed a significant contract with Caterpillar Inc., the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Delphi Delco Electronics Systems, a division of Delphi, will co-develop engine controllers for all of Caterpillar's diesel engines and many Caterpillar machines starting in mid-2001. In addition, Delphi Delco will partner with Delphi Energy & Engine Management Systems, also a Delphi division, to develop a new line of hydraulic control modules for Caterpillar.

Other contracts announced during the quarter include:

- PSA Peugeot Citroen -- wiring harnesses for a 2001 model year vehicle
- Volkswagen -- airbags for a future global program
- Opel -- driver and passenger airbags for a program on a global basis
- DaimlerChrysler -- Level 3 Modular Door Systems for the Mercedes-Benz Actros
- DaimlerChrysler -- modular cockpits for the M-Class through a four-year contract with Mercedes-Benz U.S. International in Graz, Austria

Aftermarket

Separately, Delphi announced the creation of a new division, Delphi Aftermarket, to bolster its brand support and sales in the aftermarket. The announcement was made at Equip 'Auto, a vehicle and aftermarket show in Paris.

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