In this press release the Company has provided information regarding certain non-GAAP financial measures including "EBIT-R" and "free cash flow." Such non-GAAP financial measures are reconciled to their closest US GAAP financial measure in the schedules below.
EBIT-R: EBIT-R represents net (loss) income before net interest expense and provision for income taxes and excludes asset impairments, gains and losses on business divestitures and net unreimbursed restructuring expenses and other reimbursable costs. 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 continuing operating activities.
Three-Months Ended Six-Months Ended FY 2008 June 30 June 30 Estimate 2008 2007 2008 2007 Net loss $(42) $(67) $(147) $(220) $(506) to (456) Interest expense, net 42 41 84 81 175 Provision for income taxes 49 28 100 45 170 Asset impairments and loss on divestitures 11 13 51 63 66 Restructuring and other reimbursable costs 36 53 83 94 140 Reimbursement from Escrow Account (18) (53) (42) (94) (70) EBIT-R $78 $15 $129 $(31) $(25) to 25
EBIT-R is not a recognized term under GAAP and does not purport to be an alternative to net (loss) income 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 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.
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, for planning and forecasting future periods and as a measure for compensation purposes. Three-Months Ended Six-Months Ended 2008 June 30 June 30 Estimate* 2008 2007 2008 2007 Cash provided from operating activities $133 $146 $7 $15 $(40) to 60 Capital expenditures (80) (80) (154) (144) (310) Free cash flow $53 $66 $(147) $(129) $(350) to (250)
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 June 30, 2008 Visteon had $105 million of total receivable sales, which is equal to the balance at December 31, 2007 after adjusting for exchange. Full year 2008 estimates are based on receivables sales equal to the December 31, 2007 level.
Web site: http://www.visteon.com/