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false--12-31Q320190001111335100000.010.01250000000250000000550000005500000031000000300000001000000100000010000000.010.0150000000500000000000<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description of Business</font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Visteon Corporation (the "Company" or "Visteon") is a global technology company that designs, engineers and manufactures innovative cockpit electronics and connected car solutions for the world&#8217;s major vehicle manufacturers including Ford, Mazda, Renault/Nissan, General Motors, Volkswagen, Jaguar/Land Rover, Daimler, Honda and BMW. Visteon is headquartered in Van Buren Township, Michigan, and has an international network of manufacturing operations, technical centers and joint venture operations, supported by approximately </font><font style="font-family:inherit;font-size:10pt;">10,000</font><font style="font-family:inherit;font-size:10pt;"> employees, dedicated to the design, development, manufacture and support of its product offerings and its global customers. The Company's manufacturing and engineering footprint is principally located outside of the U.S., primarily in Mexico, Bulgaria, Portugal, Germany, India and China.&#160; </font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Visteon is driving the smart, learning, digital cockpit of the future, to improve safety and the user experience. Visteon is a global leader in cockpit electronic products including digital instrument clusters, information displays, infotainment, head-up displays ("HUD"), telematics, SmartCore&#8482; cockpit domain controllers, and the DriveCore&#8482; autonomous driving platform. Visteon also delivers artificial intelligence based technologies, connected car, cybersecurity, interior sensing, embedded multimedia and smartphone connectivity software solutions.</font></div></div> 0001111335 2019-01-01 2019-09-30 0001111335 2019-10-17 0001111335 2018-07-01 2018-09-30 0001111335 2018-01-01 2018-09-30 0001111335 2019-07-01 2019-09-30 0001111335 us-gaap:RetainedEarningsMember 2019-01-01 2019-09-30 0001111335 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001111335 2018-12-31 0001111335 2019-09-30 0001111335 2019-03-31 0001111335 2018-09-30 0001111335 2017-12-31 0001111335 us-gaap:ParentMember 2019-01-01 2019-03-31 0001111335 us-gaap:ParentMember 2019-06-30 0001111335 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0001111335 2019-04-01 2019-06-30 0001111335 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001111335 us-gaap:NoncontrollingInterestMember 2019-07-01 2019-09-30 0001111335 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 001-15827
VISTEON CORPORATION
(Exact name of registrant as specified in its charter)
State of
Delaware
 
38-3519512
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Village Center Drive,
Van Buren Township,
Michigan
48111
(Address of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code: (800)-VISTEON
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, Par Value $.01 Per Share
VC
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No__
Indicate by check mark whether the registrant: has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ü No __
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer," "accelerated filer,” "smaller reporting company" and “emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ü  Accelerated filer  __   Non-accelerated filer __   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. __
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ü
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ü No__
As of October 17, 2019, the registrant had outstanding 27,965,336 shares of common stock.
Exhibit index located on page number 44.


1





Visteon Corporation and Subsidiaries
Index

Page
 
 
 
 
 
Consolidated Statements of Changes in Equity (Unaudited)
 
 
 
 
 
 
 

2




Part I
Financial Information

Item 1.
Consolidated Financial Statements
 
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
 
Three Months Ended September 30
 
Nine Months Ended
September 30
 
2019
 
2018
 
2019
 
2018
Sales
$
731

 
$
681

 
$
2,201

 
$
2,253

Cost of sales
(647
)
 
(599
)
 
(1,981
)
 
(1,938
)
Gross margin
84

 
82

 
220

 
315

Selling, general and administrative expenses
(52
)
 
(40
)
 
(167
)
 
(139
)
Restructuring expense, net
(1
)
 
(18
)
 
(2
)
 
(28
)
Interest expense
(4
)
 
(4
)
 
(10
)
 
(11
)
Interest income
1

 
2

 
3

 
5

Equity in net income of non-consolidated affiliates
1

 
3

 
7

 
10

Other income, net
2

 
7

 
7

 
17

Income before income taxes
31

 
32

 
58

 
169

Provision for income taxes
(13
)
 
(9
)
 
(16
)
 
(42
)
Net income from continuing operations
18

 
23

 
42

 
127

Income from discontinued operations, net of tax

 
1

 

 
2

Net income
18

 
24

 
42

 
129

Net income attributable to non-controlling interests
(4
)
 
(3
)
 
(7
)
 
(8
)
Net income attributable to Visteon Corporation
$
14

 
$
21

 
$
35

 
$
121

 
 
 
 
 
 
 
 
Comprehensive income (loss)
$
(4
)
 
$
8

 
$
21

 
$
91

Comprehensive income (loss) attributable to Visteon Corporation
$
(5
)
 
$
8

 
$
17

 
$
87

 
 
 
 
 
 
 
 
Basic earnings per share:
 
 
 
 
 
 
 
    Continuing operations
$
0.50

 
$
0.68

 
$
1.25

 
$
3.99

    Discontinued operations

 
0.03

 

 
0.07

    Basic earnings per share attributable to Visteon Corporation
$
0.50

 
$
0.71

 
$
1.25

 
$
4.06

Diluted earnings per share:
 
 
 
 
 
 
 
    Continuing operations
$
0.50

 
$
0.68

 
$
1.24

 
$
3.95

    Discontinued operations

 
0.03

 

 
0.07

    Diluted earnings per share attributable to Visteon Corporation
$
0.50

 
$
0.71

 
$
1.24

 
$
4.02


See accompanying notes to the consolidated financial statements.

3




VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
 
(Unaudited)
 
 
 
September 30
 
December 31
 
2019
 
2018
ASSETS
Cash and equivalents
$
443

 
$
463

Restricted cash
3

 
4

Accounts receivable, net
457

 
486

Inventories, net
192

 
184

Other current assets
192

 
159

Total current assets
1,287

 
1,296

Property and equipment, net
410

 
397

Intangible assets, net
124

 
129

Right to use assets, net
156

 

Investments in non-consolidated affiliates
48

 
42

Other non-current assets
139

 
143

Total assets
$
2,164

 
$
2,007

LIABILITIES AND EQUITY
Short-term debt
$
47

 
$
57

Accounts payable
464

 
436

Accrued employee liabilities
73

 
67

Current lease liabilities
28

 

Other current liabilities
150

 
161

Total current liabilities
762

 
721

Long-term debt
348

 
348

Employee benefits
247

 
257

Non-current lease liabilities
132

 

Deferred tax liabilities
27

 
23

Other non-current liabilities
64

 
76

Stockholders’ equity:
 
 
 
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of September 30, 2019 and December 31, 2018)

 

Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 28 million shares outstanding as of September 30, 2019 and December 31, 2018)
1

 
1

Additional paid-in capital
1,340

 
1,335

Retained earnings
1,644

 
1,609

Accumulated other comprehensive loss
(234
)
 
(216
)
Treasury stock
(2,277
)
 
(2,264
)
Total Visteon Corporation stockholders’ equity
474

 
465

Non-controlling interests
110

 
117

Total equity
584

 
582

Total liabilities and equity
$
2,164

 
$
2,007


See accompanying notes to the consolidated financial statements.

4




VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS1 
(Dollars in Millions)
(Unaudited)
 
Nine Months Ended
September 30
 
2019
 
2018
Operating Activities
 
 
 
Net income
$
42

 
$
129

Adjustments to reconcile net income to net cash provided from operating activities:
 
 
 
Depreciation and amortization
74

 
67

Non-cash stock-based compensation
14

 
4

Equity in net income of non-consolidated affiliates, net of dividends remitted
(7
)
 
(10
)
Gains on transactions

 
(8
)
Other non-cash items
5

 
2

Changes in assets and liabilities:
 
 
 
Accounts receivable
17

 
82

Inventories
(13
)
 
(38
)
Accounts payable
49

 
(17
)
Other assets and other liabilities
(63
)
 
(104
)
Net cash provided from operating activities
118

 
107

Investing Activities
 
 
 
Capital expenditures, including intangibles
(109
)
 
(96
)
Loan repayments from non-consolidated affiliates
11

 

Acquisition of business, net of cash acquired

 
16

Other
2

 
13

Net cash used by investing activities
(96
)
 
(67
)
Financing Activities
 
 
 
Repurchase of common stock
(20
)
 
(250
)
Short-term debt, net
(8
)
 
(13
)
Dividends paid to non-controlling interests
(7
)
 
(12
)
Distribution payments

 
(14
)
Stock compensation tax withholding payments

 
(7
)
Other

 
2

Net cash used by financing activities
(35
)
 
(294
)
Effect of exchange rate changes on cash
(8
)
 
(13
)
Net decrease in cash
(21
)
 
(267
)
Cash and restricted cash at beginning of the period
467

 
709

Cash and restricted cash at end of the period
$
446

 
$
442

1The Company has combined cash flows from discontinued and continuing operations within the operating and financing categories.

See accompanying notes to the consolidated financial statements.

5




VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in Millions)
(Unaudited)
 
Total Visteon Corporation Stockholders' Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Total Visteon Corporation Stockholders' Equity
 
Non-Controlling Interests
 
Total Equity
December 31, 2018
$
1

 
$
1,335

 
$
1,609

 
$
(216
)
 
$
(2,264
)
 
$
465

 
$
117

 
$
582

Net income

 

 
14

 

 

 
14

 
2

 
16

Other comprehensive income

 

 

 
4

 

 
4

 
1

 
5

Stock-based compensation, net

 
(5
)
 

 

 
7

 
2

 

 
2

Acquisition of non-controlling interest

 
2

 

 

 

 
2

 
(2
)
 

March 31, 2019
$
1

 
$
1,332

 
$
1,623

 
$
(212
)
 
$
(2,257
)
 
$
487

 
$
118

 
$
605

Net income

 

 
7

 

 

 
7

 
1

 
8

Other comprehensive loss

 

 

 
(3
)
 

 
(3
)
 
(1
)
 
(4
)
Stock-based compensation, net

 
6

 

 

 

 
6

 

 
6

Repurchase of shares of common stock

 

 

 

 
(20
)
 
(20
)
 

 
(20
)
Dividends payable

 

 

 

 

 

 
(2
)
 
(2
)
June 30, 2019
$
1

 
$
1,338

 
$
1,630

 
$
(215
)
 
$
(2,277
)
 
$
477

 
$
116

 
$
593

Net income

 

 
14

 

 

 
14

 
4

 
18

Other comprehensive loss

 

 

 
(19
)
 

 
(19
)
 
(3
)
 
(22
)
Stock-based compensation, net

 
2

 

 

 

 
2

 

 
2

Cash dividends

 

 

 

 

 

 
(7
)
 
(7
)
September 30, 2019
$
1

 
$
1,340

 
$
1,644

 
$
(234
)
 
$
(2,277
)
 
$
474

 
$
110

 
$
584

 
Total Visteon Corporation Stockholders' Equity
 
 
 
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Total Visteon Corporation Stockholders' Equity
 
Non-Controlling Interests
 
Total Equity
December 31, 2017
$
1

 
$
1,339

 
$
1,445

 
$
(174
)
 
$
(1,974
)
 
$
637

 
$
124

 
$
761

Net income

 

 
65

 

 

 
65

 
4

 
69

Other comprehensive income

 

 

 
17

 

 
17

 
6

 
23

Stock-based compensation, net

 
(18
)
 

 

 
5

 
(13
)
 

 
(13
)
Repurchase of shares of common stock

 
(30
)
 

 

 
(170
)
 
(200
)
 

 
(200
)
Dividends payable

 

 

 

 

 

 
(25
)
 
(25
)
March 31, 2018
$
1

 
$
1,291

 
$
1,510

 
$
(157
)
 
$
(2,139
)

$
506

 
$
109

 
$
615

Net income

 

 
35

 

 

 
35

 
1

 
36

Other comprehensive loss

 

 

 
(38
)
 

 
(38
)
 
(7
)
 
(45
)
Stock-based compensation, net

 
11

 

 

 
2

 
13

 


 
13

Dividends payable

 

 

 

 

 

 
(3
)
 
(3
)
June 30, 2018
$
1

 
$
1,302

 
$
1,545

 
$
(195
)
 
$
(2,137
)
 
$
516

 
$
100

 
$
616

Net income

 

 
21

 

 

 
21

 
3

 
24

Other comprehensive loss

 

 

 
(13
)
 

 
(13
)
 
(3
)
 
(16
)
Stock-based compensation, net

 
(1
)
 

 

 
3

 
2

 

 
2

Repurchase of shares of common stock

 
30

 

 

 
(80
)
 
(50
)
 

 
(50
)
Business acquisition

 

 

 

 

 

 
15

 
15

September 30, 2018
$
1

 
$
1,331

 
$
1,566

 
$
(208
)
 
$
(2,214
)
 
$
476

 
$
115

 
$
591


See accompanying notes to the consolidated financial statements.

6





VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Summary of Significant Accounting Policies
The unaudited consolidated financial statements of Visteon Corporation (the "Company" or "Visteon") have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim consolidated financial statements include all adjustments (consisting of normal recurring adjustments, except as otherwise disclosed) that management believes are necessary for a fair presentation of the results of operations, financial position and cash flows of the Company for the interim periods presented. Interim results are not necessarily indicative of full-year results.
Other Income, Net:

Three Months Ended September 30
 
Nine Months Ended
September 30

2019

2018
 
2019
 
2018

(Dollars in Millions)
Pension financing benefits, net
$
2

 
$
3

 
$
7

 
$
9

Transformation initiatives






4

Gain on non-consolidated affiliate transactions, net

 
4

 

 
4


$
2


$
7

 
$
7

 
$
17



Pension financing benefits, net include return on assets net of interest costs and other amortization.
Transformation initiatives for the nine months ended September 30, 2018 include a $4 million benefit on settlement of litigation matters with the Company’s former President and Chief Executive Officer (“former CEO”) as further described in Note 19, "Commitments and Contingencies."

On September 1, 2018, Visteon acquired an additional 1% ownership interest in Changchun Visteon FAWAY Auto Electronics Co., Ltd, ("VFAE" or the "VFAE acquisition"), a former non-consolidated affiliate, resulting in a total 51% controlling interest and a non-cash gain of $4 million as further described in Note 17, "Acquisitions."

Recently Adopted Accounting Pronouncements:
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, “Leases (Subtopic 842).” The standard increases the transparency and comparability of organizations by recognizing right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheets and disclosing key quantitative and qualitative information about leasing arrangements. In transition, the standard provides for certain practical expedients. Management elected certain practical expedients including the election not to reassess existing or expired contracts to determine if such contracts contain a lease or if the lease classification would differ, as well as the election not to separate lease and non-lease components for arrangements where the Company is a lessee.

The Company adopted the standard January 1, 2019, by applying the modified retrospective method without restatement of comparative periods' financial information, as permitted by the transition guidance. The standard had a material impact on the Company's consolidated balance sheets, but did not have an impact on its consolidated results of operations and cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the Company's accounting for finance leases remained substantially unchanged. Adoption of the new standard resulted in the recording of additional net lease assets and lease liabilities of approximately $172 million and $176 million, respectively, as of January 1, 2019. For additional information, refer to Note 10, "Leases."
In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220)." This standard provides an option to reclassify stranded tax effects within accumulated other comprehensive income (loss) to retained earnings due to the U.S. federal corporate income tax rate change in the Tax Cuts and Jobs Act of 2017 (the "Act").  The Company adopted the standard January 1, 2019 and elected to reclassify stranded amounts related to the Act from accumulated other comprehensive income (loss) to retained earnings.  However, due to the U.S. valuation allowance, there were no stranded tax

7




effects within accumulated other comprehensive income (loss) as of the enactment date, and thus, no amount to reclassify to retained earnings.

Accounting Pronouncements Not Yet Adopted:
In June 2016, the FASB issued ASU 2016-13, "Credit Losses - Measurement of Credit Losses on Financial Instruments." The guidance requires that for most financial assets, losses be based on an expected loss approach which includes estimates of losses over the life of exposure that considers historical, current and forecasted information. Expanded disclosures related to the methods used to estimate the losses as well as a specific disaggregation of balances for financial assets are also required. The change is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect application of this accounting standards update to have a material impact on its consolidated financial statements.
NOTE 2. Revenue Recognition
Disaggregated revenue by geographical market and product lines is as follows:

Three Months Ended September 30
 
Nine Months Ended
September 30
 
2019
 
2018
 
2019

2018

(Dollars in Millions)
Geographical Markets

 
 
 
 
 
 
Europe
$
221

 
$
223

 
$
726

 
$
759

Americas
201

 
180

 
597

 
611

China Domestic
143

 
90

 
372

 
281

China Export
70

 
77

 
204

 
239

Other Asia-Pacific
141

 
155

 
440

 
508

Eliminations
(45
)
 
(44
)
 
(138
)
 
(145
)

$
731

 
$
681

 
$
2,201

 
$
2,253


 
Three Months Ended September 30
 
Nine Months Ended
September 30
 
2019
 
2018
 
2019
 
2018
 
(Dollars in Millions)
Product Lines
 
 
 
 
 
 
 
Instrument clusters
$
322

 
$
275

 
$
959

 
$
908

Audio and infotainment
182

 
176

 
562

 
578

Information displays
120

 
116

 
365

 
382

Body and security
27

 
25

 
91

 
86

Climate controls
18

 
27

 
59

 
98

Telematics
29

 
17

 
51

 
51

Other
33

 
45

 
114

 
150

 
$
731

 
$
681

 
$
2,201

 
$
2,253


During the three and nine months ended September 30, 2019 and 2018, the Company recognized approximately $8 million and $19 million and $10 million and $22 million net increases in transaction price related to performance obligations satisfied in previous periods, respectively. The Company has no material contract assets, contract liabilities or capitalized contract acquisition costs as of September 30, 2019.


8




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, net sales, total assets, depreciation, amortization and capital expenditures are equal to consolidated results.
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, 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 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.

The reconciliation of net income attributable to Visteon to Adjusted EBITDA is as follows:
 
Three Months Ended September 30
 
Nine Months Ended
September 30
 
2019
 
2018
 
2019
 
2018
 
(Dollars in Millions)
Net income attributable to Visteon Corporation
$
14

 
$
21

 
$
35

 
$
121

  Depreciation and amortization
25

 
22

 
74

 
67

  Non-cash, stock-based compensation expense
3

 
4

 
14

 
4

  Provision for income taxes
13

 
9

 
16

 
42

  Interest expense, net
3

 
2

 
7

 
6

  Net income attributable to non-controlling interests
4

 
3

 
7

 
8

  Restructuring expense, net
1

 
18

 
2

 
28

  Income from discontinued operations, net of tax

 
(1
)
 

 
(2
)
  Equity in net income of non-consolidated affiliates
(1
)
 
(3
)
 
(7
)
 
(10
)
  Other

 
(4
)
 
1

 
(8
)
Adjusted EBITDA
$
62

 
$
71

 
$
149

 
$
256



9




NOTE 4. Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to Visteon by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding. Performance based share units are considered contingently issuable shares, and are included in the computation of diluted earnings per share based on the number of shares that would be issuable if the reporting date were the end of the contingency period and if the result would be dilutive.
The table below provides details underlying the calculations of basic and diluted earnings per share:
 
Three Months Ended September 30
 
Nine Months Ended
September 30
 
2019
 
2018
 
2019
 
2018
 
(In Millions, Except Per Share Amounts)
Numerator:
 
 
 
 
 
 
 
Net income from continuing operations attributable to Visteon
$
14

 
$
20

 
$
35

 
$
119

Net income from discontinued operations attributable to Visteon

 
1

 

 
2

Net income attributable to Visteon
$
14

 
$
21

 
$
35

 
$
121

Denominator:
 
 
 
 
 
 
 
Average common stock outstanding - basic
28.0

 
29.3

 
28.1

 
29.8

Dilutive effect of performance based share units and other
0.1

 
0.2

 
0.1

 
0.3

Diluted shares
28.1

 
29.5

 
28.2

 
30.1

Basic and Diluted Per Share Data:
 
 
 
 
 
 
 
Basic earnings per share attributable to Visteon:
 
 
 
 
 
 
 
Continuing operations
$
0.50

 
$
0.68

 
$
1.25

 
$
3.99

Discontinued operations

 
0.03

 

 
0.07

 
$
0.50

 
$
0.71

 
$
1.25

 
$
4.06

Diluted earnings per share attributable to Visteon:
 
 
 
 
 
 
 
Continuing operations
$
0.50

 
$
0.68

 
$
1.24

 
$
3.95

Discontinued operations

 
0.03

 

 
0.07

 
$
0.50

 
$
0.71

 
$
1.24

 
$
4.02