In this press release the Company has provided information regarding non- GAAP financial measures of "EBIT-R" and "free cash flow." Such non-GAAP financial measures are reconciled to their closest US GAAP financial measure below.
EBIT-R: EBIT-R represents net loss before net interest expense, provision for income taxes and extraordinary item and excludes impairment of long-lived assets and net unreimbursed restructuring charges. Related amounts included in loss from discontinued operations are reflected in the totals below. Management believes EBIT-R 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.
Three-Months Ended Nine-Months Ended FY 2007 September 30 September 30 Estimate 2007 2006 2007 2006 Net loss $(109) $(177) $(329) $(124) $(430) - (400) Interest expense, net 42 40 123 117 170 Provision for income taxes 20 10 65 57 95 Asset impairments 14 - 77 22 77 Extraordinary item, net of tax - - - (8) - Restructuring and other reimbursable costs 27 14 121 35 137 Reimbursement from escrow account (27) (14) (121) (35) (129) EBIT-R $(33) $(127) $(64) $64 $(80) - (50)
EBIT-R is not a recognized term under US GAAP and does not purport to be an alternative to net income (loss) as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBIT-R may not be comparable to other similarly titled measures of other companies. Additionally, EBIT-R is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
Free Cash Flow: Free cash flow represents cash flow from operating activities less capital expenditures. Management believes that free cash flow is useful in analyzing the Company's ability to service and repay its debt and it uses the measure for planning and forecasting future periods, as well as in compensation decisions.
Three-Months Ended Nine-Months Ended 2007 September 30 September 30 Estimate* 2007 2006 2007 2006 Cash provided from operating activities $(53) $(34) $(38) $42 $90 - 150 Capital expenditures (88) (82) (232) (265) (350) Free cash flow $(141) $(116) $(270) $(223) $ (260) - (200)
Free cash flow is not a recognized term under US GAAP and does not reflect cash used to service debt and does not reflect funds available for investment or other discretionary uses.
*As of September 30, 2007 Visteon had $96 million of total receivable sales. This represents a $61 million decrease from the $157 million at December 31, 2006. Full year 2007 estimates are based on receivables sales equal to the December 31, 2006 level.
Web site: http://www.visteon.com/