Segment Information

Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker, the Chief Executive Officer, evaluates the performance of the Company’s segment primarily based on net sales, before elimination of inter-company shipments and Adjusted EBITDA (a non-GAAP financial measure, as defined below).

The Company’s current reportable segment is Electronics, which provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment systems, audio systems, telematics solutions and head-up displays.

Adjusted EBITDA

The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, restructuring expense, net interest expense, equity in net income of non-consolidated affiliates, loss on divestiture, gain on non-consolidated affiliate transactions, provision for income taxes, discontinued operations, net income attributable to non-controlling interests, non-cash stock-based compensation expense, and other gains and losses not reflective of the Company's ongoing operations. The Company has changed the presentation of the reconciliation of Adjusted EBITDA to Net income attributable to Visteon Corporation, due to the adoption of ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the presentation of net periodic pension cost and net periodic postretirement benefit cost."

Adjusted EBITDA is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under GAAP and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. In addition, the Company uses Adjusted EBITDA (i) as a factor in incentive compensation decisions, (ii) to evaluate the effectiveness of the Company's business strategies and (iii) the Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.

Electronics sales were $758 million and $774 million for the three months ended June 30, 2018 and 2017, respectively. Segment Adjusted EBITDA was $81 million and $84 million for the three months ended June 30, 2018 and 2017, respectively.

Electronics sales were $1,572 million and $1,584 million for the six months ended June 30, 2018 and 2017, respectively. Segment Adjusted EBITDA was $185 million for both six month periods ended ended June 30, 2018 and 2017, respectively.

The reconciliation of Adjusted EBITDA to net income attributable to Visteon is as follows:



	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
	(Dollars in Millions)
Adjusted EBITDA	$	81		$	84		$	185		185
Depreciation and amortization	(23		)	(22		)	(45		)	(41		)
Restructuring expense	(5		)	(3		)	(10		)	(4		)
Interest expense, net	(2		)	(4		)	(4		)	(9		)
Equity in net income of non-consolidated affiliates	4			3			7			5
Provision for income taxes	(12		)	(10		)	(33		)	(26		)
(Loss) income from discontinued operations, net of tax	(1		)	—			1			8
Net income attributable to non-controlling interests	(1		)	(3		)	(5		)	(7		)
Non-cash, stock-based compensation expense	(6		)	(4		)	—			(6		)
Other	—			4			4			3
Net income attributable to Visteon Corporation	$	35		$	45		$	100		$	108