Segment Information and Revenue Recognition

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Segment Information and Revenue Recognition

Segment Information and Revenue Recognition

The Company’s single 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, head-up displays, as well as battery monitoring systems. As the Company has one reportable segment, total assets, depreciation, amortization, and capital expenditures are equal to consolidated results.

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-U.S. GAAP financial measure, as defined below), and operating assets.

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, gain and 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.

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 U.S. 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. The Company uses Adjusted EBITDA as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.

Segment Adjusted EBITDA and reconciliation to net income (loss) attributable to Visteon is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Net income (loss) attributable to Visteon Corporation	$	5	$	6	$	10	$	(74)
Depreciation and amortization	27		25		82		75
Non-cash, stock-based compensation expense	4		4		13		13
Provision for income taxes	4		12		20		19
Interest expense, net	2		5		6		10
Net income (loss) attributable to non-controlling interests	2		4		5		6
Restructuring, net	(2)		32		(2)		69
Equity in net income of non-consolidated affiliates	(2)		(2)		(2)		(4)
Other	2		1		4		3
Adjusted EBITDA	$	42	$	87	$	136	$	117

Revenue Recognition

Disaggregated net sales by geographical market and product lines is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Geographical Markets
Europe	$	212	$	281	$	707	$	667
Americas	158		192		519		446
China Domestic	145		140		384		323
China Export	51		58		148		145
Other Asia-Pacific	94		107		309		261
Eliminations	(29)		(31)		(80)		(81)
	$	631	$	747	$	1,987	$	1,761

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020
Product Lines
Instrument clusters	$	345	$	388	$	1,062	$	901
Audio and infotainment	122		134		369		333
Information displays	71		135		282		298
Body and security	25		28		88		66
Telematics	15		14		49		43
Climate controls	13		14		42		31
Other	40		34		95		89
	$	631	$	747	$	1,987	$	1,761

During the three and nine months ended September 30, 2021, revenue recognized related to performance obligations satisfied in previous periods represented less than 1% of consolidated net sales. The Company has no material contract assets, contract liabilities, or capitalized contract acquisition costs as of September 30, 2021.