Segment Information

12 Months Ended

Dec. 31, 2018

NOTE 3. 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, Adjusted EBITDA (a non-GAAP financial measure, as defined below) and operating assets. As the Company has one reportable segment, total assets, depreciation, amortization and capital expenditures are equal to consolidated results.

The accounting policies for the reportable segments are the same as those described in the Note 1, "Summary of Significant Accounting Policies” to the Company’s consolidated financial statements.

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

Key financial measures reviewed by the Company’s chief operating decision maker are as follows.

Segment Sales

Segment Sales were $2,945 million, $2,984 million and $3,146 million for the years ended December 31, 2019, 2018 and 2017.

Segment 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, 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.

Segment Adjusted EBITDA was $234 million, $330 million and $370 million for the years ended December 31, 2019, 2018 and 2017.

The reconciliation of Adjusted EBITDA to net income attributable to Visteon for the years ended December 31, 2019, 2018 and 2017 is as follows:



	Year Ended December 31
(In millions)	2019			2018			2017
Net income attributable to Visteon Corporation	$	70		$	164		$	176
Depreciation and amortization	100			91			87
Restructuring expense, net	4			29			14
Interest expense, net	9			7			16
Equity in net income of non-consolidated affiliates	(6		)	(13		)	(7		)
Loss on divestiture	—			—			33
Provision for income taxes	24			43			48
Net (income) loss from discontinued operations, net of tax	1			(1		)	(17		)
Net income attributable to non-controlling interests	11			10			16
Non-cash, stock-based compensation expense	17			8			12
Other	4			(8		)	(8		)
Adjusted EBITDA	$	234		$	330		$	370

Financial Information by Geographic Region

Sales by geographic region for the years ended December 31, 2019, 2018 and 2017 are as follows:



	Year Ended December 31
(In millions)	2019			2018			2017
United States	$	663		$	654		$	776
Mexico	38			67			70
Total North America	701			721			846
Portugal	602			563			508
Slovakia	237			235			294
Tunisia	71			96			109
France	53			70			84
Other Europe	16			20			20
Intra-region eliminations	(1		)	(3		)	(11		)
Total Europe	978			981			1,004
China Domestic	527			405			381
China Export	262			309			363
Total China	789			714			744
Japan	393			494			495
India	110			114			92
Thailand	57			69			81
Korea	—			2			12
Intra-region eliminations	—			(1		)	(1		)
Total Other Asia-Pacific	560			678			679
South America	91			79			68
Inter-region eliminations	(174		)	(189		)	(195		)
	$	2,945		$	2,984		$	3,146
Company sales based on geographic region where sale originates and not where customer is located.

Tangible long-lived assets by geographic region as of December 31, 2019 and 2018 are as follows:



	Year Ended December 31
(In millions)	2019		2018
Europe	$	207	$	152
North America	186		74
China	93		86
Other Asia-Pacific	86		60
South America	29		25
	$	601	$	397
Tangible long-lived assets include property, plant and equipment and right-of-use assets.