Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 12, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ALV | |
Security Exchange Name | NYSE | |
Entity Registrant Name | AUTOLIV, INC. | |
Entity Central Index Key | 0001034670 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock (par value $1.00 per share) | |
Entity Common Stock, Shares Outstanding | 87,472,019 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-12933 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0378542 | |
Entity Address, Address Line One | Klarabergsviadukten 70, Section B7 | |
Entity Address, Address Line Two | Box 70381 | |
Entity Address, City or Town | Stockholm | |
Entity Address, Country | SE | |
Entity Address, Postal Zip Code | SE-107 24 | |
City Area Code | +46 8 | |
Local Phone Number | 587 20 600 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Income Statement [Abstract] | |||||
Net sales | $ 2,022 | $ 1,048 | $ 4,265 | $ 2,893 | |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | |
Cost of sales | $ (1,638) | $ (1,033) | $ (3,422) | $ (2,548) | |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | |
Gross profit | $ 384 | $ 14 | $ 843 | $ 345 | |
Selling, general and administrative expenses | (111) | (98) | (219) | (192) | |
Research, development and engineering expenses, net | (107) | (88) | (213) | (191) | |
Amortization of intangibles | (3) | (2) | (5) | (5) | |
Other income (expense), net | 0 | (59) | (4) | (57) | |
Operating income (loss) | 164 | (234) | 401 | (99) | |
Income from equity method investment | 0 | 0 | 2 | 0 | |
Interest income | 2 | 1 | 2 | 3 | |
Interest expense | (16) | (16) | (32) | (32) | |
Other non-operating items, net | 2 | 1 | (4) | (7) | |
Income (loss) before income taxes | 152 | (247) | 370 | (135) | |
Income tax (expense) benefit | (48) | 72 | (108) | 36 | |
Net income (loss) | 105 | (174) | 262 | (99) | |
Less: Net income attributable to non-controlling interest | 0 | 0 | 1 | 0 | |
Net income (loss) attributable to controlling interest | $ 104 | $ (175) | $ 261 | $ (100) | |
Net earnings (loss) per share - basic | [1] | $ 1.19 | $ (2) | $ 2.98 | $ (1.14) |
Net earnings (loss) per share - diluted | [1] | $ 1.19 | $ (2) | $ 2.98 | $ (1.14) |
Weighted average number of shares outstanding, net of treasury shares (in millions) | [2] | 87.4 | 87.3 | 87.4 | 87.3 |
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions) | 87.7 | 87.3 | 87.7 | 87.3 | |
Cash dividend per share - declared | [3],[4] | $ 0.62 | $ 0 | $ 0.62 | $ 0 |
Cash dividend per share – paid | [4] | $ 0.62 | $ 0 | $ 0.62 | $ 0.62 |
[1] | Participating share awards with the right to receive dividend equivalents are (under the two-class method) excluded from the earnings per share calculation (see Note 11 to the unaudited condensed consolidated financial statements). | ||||
[2] | The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. | ||||
[3] | As earlier communicated, on April 2, 2020, the Company announced it canceled its declared dividend for the second quarter of 2020. | ||||
[4] | On May 12, 2021, the Company announced it will reinstate quarterly dividends and declared a dividend of 62 cents for the second quarter of 2021. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 105 | $ (174) | $ 262 | $ (99) |
Other comprehensive income (loss) before tax: | ||||
Change in cumulative translation adjustments | 37 | 27 | (27) | (75) |
Net change in unrealized components of defined benefit plans | 1 | 3 | 3 | 4 |
Other comprehensive income (loss), before tax | 38 | 30 | (24) | (71) |
Tax effect allocated to other comprehensive loss | 0 | (1) | (1) | (1) |
Other comprehensive income (loss), net of tax | 38 | 29 | (25) | (72) |
Total comprehensive income (loss) | 143 | (145) | 237 | (172) |
Less: Comprehensive income attributable to non-controlling interest | 1 | 1 | 1 | 0 |
Comprehensive income (loss) attributable to controlling interest | $ 142 | $ (146) | $ 236 | $ (172) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | |
Assets | |||
Cash and cash equivalents | $ 893 | $ 1,178 | |
Receivables, net | 1,719 | 1,822 | |
Inventories, net | 901 | 798 | |
Prepaid expenses and accrued income | 230 | 164 | |
Other current assets | 60 | 307 | |
Total current assets | 3,804 | 4,269 | |
Property, plant and equipment, net | 1,833 | 1,869 | |
Operating lease right-of-use assets | 133 | 141 | |
Goodwill | 1,393 | 1,398 | |
Intangible assets, net | 11 | 14 | |
Other non-current assets | 462 | 466 | |
Total assets | 7,636 | 8,157 | |
Liabilities and equity | |||
Short-term debt | [1] | 363 | 302 |
Accounts payable | 1,125 | 1,254 | |
Accrued expenses | 1,066 | 1,270 | |
Operating lease liabilities - current | 39 | 37 | |
Other current liabilities | 260 | 284 | |
Total current liabilities | 2,852 | 3,147 | |
Long-term debt | [1] | 1,712 | 2,110 |
Pension liability | 239 | 248 | |
Operating lease liabilities - non-current | 94 | 103 | |
Other non-current liabilities | 125 | 126 | |
Total non-current liabilities | 2,170 | 2,587 | |
Common stock | 103 | 103 | |
Additional paid-in capital | 1,329 | 1,329 | |
Retained earnings | 2,678 | 2,471 | |
Accumulated other comprehensive loss | (372) | (347) | |
Treasury stock | (1,138) | (1,147) | |
Total controlling interest's equity | 2,600 | 2,409 | |
Non-controlling interest | 15 | 14 | |
Total equity | 2,615 | 2,423 | |
Total liabilities and equity | $ 7,636 | $ 8,157 | |
[1] | Debt as reported in balance sheet. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net income (loss) | $ 262 | $ (99) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation and amortization | 199 | 175 |
Deferred income taxes | 3 | (101) |
Other, net | (1) | 28 |
Net change in operating assets and liabilities | (214) | 25 |
Net cash provided by operating activities | 249 | 28 |
Investing activities | ||
Expenditures for property, plant and equipment | (191) | (154) |
Proceeds from sale of property, plant and equipment | 1 | 2 |
Net cash used in investing activities | (189) | (152) |
Financing activities | ||
Net decrease in short-term debt | (291) | (142) |
Increase in long-term debt | 14 | 1,720 |
Decrease in long-term debt | 0 | (630) |
Dividends paid | (54) | (54) |
Common stock options exercised | 2 | 0 |
Net cash (used in) provided by financing activities | (329) | 895 |
Effect of exchange rate changes on cash and cash equivalents | (16) | 8 |
(Decrease) increase in cash and cash equivalents | (285) | 779 |
Cash and cash equivalents at beginning of period | 1,178 | 445 |
Cash and cash equivalents at end of period | $ 893 | $ 1,223 |
CONSOLIDATED STATEMENTS OF TOTA
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total controlling interest's equity | Non-controlling interest | |
Balance at Dec. 31, 2019 | $ 2,122 | $ 103 | $ 1,329 | $ 2,284 | $ (449) | $ (1,158) | $ 2,109 | $ 13 | |
Comprehensive Income (loss): | |||||||||
Net income | 75 | 75 | 75 | 0 | |||||
Foreign currency translation adjustment | (102) | (102) | (102) | 0 | |||||
Pension liability | 1 | 1 | 1 | ||||||
Total comprehensive income (loss) | (26) | 75 | (101) | (26) | 0 | ||||
Stock-based compensation | 2 | 2 | 2 | ||||||
Cash dividends declared | [1] | (54) | (54) | (54) | |||||
Balance at Mar. 31, 2020 | 2,044 | 103 | 1,329 | 2,305 | (550) | (1,156) | 2,031 | 13 | |
Balance at Dec. 31, 2019 | 2,122 | 103 | 1,329 | 2,284 | (449) | (1,158) | 2,109 | 13 | |
Comprehensive Income (loss): | |||||||||
Net income | (99) | ||||||||
Total comprehensive income (loss) | (172) | ||||||||
Balance at Jun. 30, 2020 | 1,955 | 103 | 1,329 | 2,184 | (521) | (1,154) | 1,942 | 14 | |
Balance at Mar. 31, 2020 | 2,044 | 103 | 1,329 | 2,305 | (550) | (1,156) | 2,031 | 13 | |
Comprehensive Income (loss): | |||||||||
Net income | (174) | (175) | (175) | 1 | |||||
Foreign currency translation adjustment | 27 | 27 | 27 | 0 | |||||
Pension liability | 2 | 2 | 2 | ||||||
Total comprehensive income (loss) | (145) | (175) | 29 | (146) | 1 | ||||
Stock-based compensation | 2 | 0 | 2 | 2 | |||||
Cash dividends declared - reversal | [1] | 54 | 54 | 54 | |||||
Balance at Jun. 30, 2020 | 1,955 | 103 | 1,329 | 2,184 | (521) | (1,154) | 1,942 | 14 | |
Balance at Dec. 31, 2020 | 2,423 | 103 | 1,329 | 2,471 | (347) | (1,147) | 2,409 | 14 | |
Comprehensive Income (loss): | |||||||||
Net income | 157 | 157 | 157 | 0 | |||||
Foreign currency translation adjustment | (64) | (64) | (64) | 0 | |||||
Pension liability | 1 | 1 | 1 | ||||||
Total comprehensive income (loss) | 94 | 157 | (63) | 94 | 0 | ||||
Stock-based compensation | 4 | 4 | 4 | ||||||
Balance at Mar. 31, 2021 | 2,521 | 103 | 1,329 | 2,628 | (410) | (1,143) | 2,507 | 14 | |
Balance at Dec. 31, 2020 | 2,423 | 103 | 1,329 | 2,471 | (347) | (1,147) | 2,409 | 14 | |
Comprehensive Income (loss): | |||||||||
Net income | 262 | ||||||||
Total comprehensive income (loss) | 237 | ||||||||
Balance at Jun. 30, 2021 | 2,615 | 103 | 1,329 | 2,678 | (372) | (1,138) | 2,600 | 15 | |
Balance at Mar. 31, 2021 | 2,521 | 103 | 1,329 | 2,628 | (410) | (1,143) | 2,507 | 14 | |
Comprehensive Income (loss): | |||||||||
Net income | 105 | 104 | 104 | 1 | |||||
Foreign currency translation adjustment | 37 | 37 | 37 | 0 | |||||
Pension liability | 1 | 1 | 1 | ||||||
Total comprehensive income (loss) | 143 | 104 | 38 | 0 | 142 | 1 | |||
Stock-based compensation | 5 | 5 | 5 | 0 | |||||
Cash dividends declared | [2] | (54) | (54) | (54) | |||||
Balance at Jun. 30, 2021 | $ 2,615 | $ 103 | $ 1,329 | $ 2,678 | $ (372) | $ (1,138) | $ 2,600 | $ 15 | |
[1] | Reversal of canceled dividend declared for the second quarter of 2020 which was announced by the Company on April 2, 2020. | ||||||||
[2] | Dividend for the second quarter of 2021 was declared on May 12, 2021. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited consolidated financial statements and all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2021. The Condensed Consolidated Balance Sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The Company has one reportable segment, which includes Autoliv’s airbag and seatbelt products and components. Certain amounts in the condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. Certain amounts in prior periods have been reclassified to conform to current year presentation. Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the "SEC"). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 19, 2021. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
New Accounting Standards | 2. NEW ACCOU NTING STANDARDS Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates ("ASUs") to the FASB’s Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements. Adoption of new accounting standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 prospectively as of January 1, 2021, and the adoption did not have a material impact on the Company’s consolidated financial statements. Accounting standards issued but not yet adopted None that are expected to have an impact on the Company. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. FAIR VALU E MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The carrying value of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and other current financial assets and liabilities approximate their fair value because of the short-term maturity of these instruments. The Company uses derivative financial instruments (“derivatives”) as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial policy. All derivatives are recognized in the consolidated financial statements at fair value. For certain derivatives, hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although each hedge is entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates. The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability. Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value. All the Company’s derivatives are classified as Level 2 financial instruments in the fair value hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements ("ISDA agreements") with all derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets at June 30, 2021 and December 31, 2020 have been presented on a gross basis. According to the ISDA agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below. Derivatives designated as hedging instruments There were no derivatives designated as hedging instruments as of June 30, 2021 and December 31, 2020 related to the operations. Derivatives not designated as hedging instruments Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding at June 30, 2021 and December 31, 2020 were foreign exchange swaps. For the three month periods ended June 30, 2021 and June 30, 2020, the gains and losses recognized in other non-operating items, net were a gain of $ 20 million and a gain of $ 7 million, respectively, for derivative instruments not designated as hedging instruments. For the six month periods ended June 30, 2021 and June 30, 2020, the gains and losses recognized in other non-operating items, net were a loss of $ 38 million and a loss of $ 2 million, respectively, for derivative instruments not designated as hedging instruments. The realized part of the gains and losses referred to above are reported under financing activities in the statement of cash flows. For the three and six month periods ended June 30, 2021 and June 30, 2020, the gains and losses recognized as interest expense were immaterial. The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions). June 30, 2021 December 31, 2020 Fair Value Measurements Fair Value Measurements Description Nominal Derivative Derivative Nominal Derivative Derivative Derivatives not designated as hedging Foreign exchange swaps, less $ 1,300 1) $ 1 2) $ 16 3) $ 1,463 4) $ 25 5) $ 3 6) Total derivatives not designated $ 1,300 $ 1 $ 16 $ 1,463 $ 25 $ 3 1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,300 million. 2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 1 million. 3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. 4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,463 million. 5) Net amount after deducting for offsetting swaps under ISDA agreements is $ 25 million. 6) Net amount after deducting for offsetting swaps under ISDA agreements is $ 3 million. Fair Value of Debt The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside within Level 2 of the fair value hierarchy. The fair value and carrying value of debt is summarized in the table below (dollars in millions). June 30, 2021 December 31, 2020 Carrying 1) Fair Carrying 1) Fair Long-term debt Bonds $ 1,359 $ 1,453 $ 1,377 $ 1,483 Loans 352 367 732 753 Other long-term debt 1 1 1 1 Total long-term debt 1,712 1,821 2,110 2,237 Short-term debt Short-term portion of long-term debt 353 356 275 278 Overdrafts and other short-term debt 10 10 27 27 Total short-term debt $ 363 $ 366 $ 302 $ 305 1) Debt as reported in balance sheet. Assets and liabilities measured at fair value on a nonrecurring basis In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its balance sheet that are measured at fair value on a nonrecurring basis, including certain long-lived assets, including equity method investments, goodwill and other intangible assets, typically as it relates to impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. For the three and six month periods ended June 30, 2021 and June 30, 2020, the Company did no t record any material impairment charges on its long-lived assets for its operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. INCO ME TAXES The effective tax rate for the three months period ended June 30, 2021 was 31.3 % compared to 29.3 % for the three months period ended June 30, 2020. Discrete tax items, net for the three months period ended June 30, 2021 had an unfavorable impact of 0.2 %. Discrete tax items, net for the three months period ended June 30, 2020 had a favorable impact of 4.4 %. The effective tax rate for the six months period ended June 30, 2021 was 29.2 % compared to 26.5 % for the six months period ended June 30, 2020. Discrete tax items, net for the six months period ended June 30, 2021 had a favorable impact of 0.1 %. Discrete tax items, net for the six months period ended June 30, 2020, had a favorable impact of 7.6 %. The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2010. As of June 30, 2021, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods. During the six months period ended June 30, 2021, the Company recorded a net increase of $ 4 million to income tax reserves for unrecognized tax benefits based on tax positions related to the current year, including accruing additional interest related to unrecognized tax benefits from prior years. Of the total unrecognized tax benefits of $ 50 million recorded at June 30, 2021, $ 6 million is classified as current tax payable within Other current liabilities and $ 44 million is classified as non-current tax payable within Other non-current liabilities on the Condensed Consolidated Balance Sheet. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INV ENTORIES Inventories are stated at the lower of cost ("FIFO") and net realizable value. The components of inventories were as follows (dollars in millions): As of June 30, 2021 December 31, 2020 Raw materials $ 416 $ 379 Work in progress 326 292 Finished products 249 220 Inventories 991 891 Inventory valuation reserve ( 90 ) ( 93 ) Total inventories, net of reserve $ 901 $ 798 |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2021 | |
Restructuring And Related Activities [Abstract] | |
Restructuring | 6. REST RUCTURING As of June 30, 2021, approximately $ 52 million out of the $ 107 million in total reserve balance can be attributed to the structural efficiency program initiated in the second quarter of 2020. This program is expected to be concluded in 2021. Approximately $ 38 million of the total reserve balance can be attributed to footprint optimization activities in Europe initiated in the third quarter of 2020. These activities are expected to be concluded in 2023. The table below summarizes the change in the balance sheet position of the employee related restructuring reserves (dollars in millions). The restructuring reserve balance is included within Accrued expenses in the Condensed Consolidated Balance Sheet. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented. Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Reserve at beginning of the period $ 113 $ 52 $ 126 $ 56 Provision - charge 1 69 2 71 Provision - reversal ( 0 ) ( 7 ) ( 0 ) ( 7 ) Cash payments ( 8 ) ( 16 ) ( 17 ) ( 20 ) Translation difference 1 2 ( 4 ) 0 Reserve at end of the period $ 107 $ 100 $ 107 $ 100 |
Product-Related Liabilities
Product-Related Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Product Warranties Disclosures [Abstract] | |
Product-Related Liabilities | 7. PRODUCT-REL ATED LIABILITIES The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability and warranty issues. For further explanation, see Note 9. Contingent Liabilities below. For the three and six month periods ended June 30, 2021, provisions primarily related to recall related issues. Cash payments in the three and six month periods ended June 30, 2021 mainly related to the “Toyota Recall” that was settled in April 2021. For the three and six month periods ended June 30, 2020, provisions and cash paid primarily related to recall and warranty related issues. As of June 30, 2021, the reserve for product related liabilities mainly related to recall related issues. Pursuant to the agreements entered into in connection with the spin-off of Veoneer, Inc. on June 29, 2018 (collectively, the “Spin-off Agreements”), Autoliv is required to indemnify Veoneer for recalls related to certain qualified Electronics products. As of June 30, 2021, the indemnification liabilities are approximately $ 8 million and included within Accrued expenses on the Condensed Consolidated Balance Sheet. The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). A majority of the Company’s recall related issues as of June 30, 2021 are covered by insurance. Insurance receivables are included within Other current assets and Other non-current assets on the Condensed Consolidated Balance Sheet. As of June 30, 2021, the Company had total insurance receivables related to recall issues of $ 126 million. The total product liability reserve currently is less than the product liability insurance receivable because the timing of insurance recoveries does not match the timing of our product liability. Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Reserve at beginning of the period $ 328 $ 54 $ 341 $ 72 Change in reserve 1 8 5 11 Cash payments ( 237 ) ( 4 ) ( 243 ) ( 25 ) Translation difference 11 0 0 0 Reserve at end of the period $ 103 $ 58 $ 103 $ 58 |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jun. 30, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plans | 8. RETIR EMENT PLANS The components of total Net Periodic Benefit Cost associated with the Company’s defined benefit retirement plans are as follows (dollars in millions): U.S. Plans Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Service cost $ 2 $ 2 $ 4 $ 4 Interest cost 2 3 5 7 Expected return on plan assets ( 5 ) ( 4 ) ( 9 ) ( 8 ) Amortization of prior service (credit) cost 1 ( 1 ) 0 ( 1 ) Amortization of actuarial loss 1 1 1 1 Net Periodic Benefit Cost $ 1 $ 1 $ 1 $ 3 Non-U.S. Plans Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Service cost $ 3 $ 3 $ 6 $ 6 Interest cost 2 1 3 3 Expected return on plan assets ( 1 ) ( 0 ) ( 1 ) ( 1 ) Amortization of prior service (credit) cost ( 0 ) 0 0 0 Amortization of actuarial loss 1 0 1 1 Net Periodic Benefit Cost $ 5 $ 4 $ 9 $ 9 The Service cost and Amortization of prior service cost components in the tables above are reported in Operating Income in the Consolidated Statements of Income. The remaining components - Interest cost, Expected return on plan assets, Amortization of actuarial loss and Settlement loss - are reported as Other non-operating items, net in the Consolidated Statements of Income. |
Contingent Liabilities
Contingent Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingent Liabilities | 9. CONTINGE NT LIABILITIES Legal Proceedings Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in the future. ANTITRUST MATTERS Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products that the Company sells. In addition to concluded matters, authorities of other countries with significant light vehicle manufacturing or sales may initiate similar investigations. PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage or other loss, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer. Accordingly, the future costs of warranty claims by customers may be material. However, the Company believes its established reserves are adequate. Autoliv’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates. In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations. The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance. Specific Recalls: On June 29, 2016, the Company announced that it was cooperating with Toyota Motor Corp. in its recall of approximately 1.4 million vehicles equipped with a certain model of the Company’s side curtain airbag (the “Toyota Recall”). The Company determined pursuant to ASC 450 that a loss with respect to the Toyota Recall was probable and accrued an amount that was included in the total product liability accrual in the fourth quarter of 2020. The amount by which the product liability accrual exceeded the product liability insurance receivable with respect to the Toyota Recall was $ 25 million and included deductibles and replacement parts. The Company settled and resolved the Toyota Recall on April 27, 2021. The final amount by which the product liability accrual exceeded the product liability insurance receivable was $ 26 million, which is generally in line with our expectations disclosed in prior quarters. The matter is now closed. Additionally, in the fourth quarter of 2020, the Company was made aware of a potential recall by one of its customers (the “Unannounced Recall”). The Company continues to evaluate this matter with its customer. The Company has determined pursuant to ASC 450 that a loss with respect to the Unannounced Recall is probable and has accrued an amount that is reflected in the total product liability accrual in the fourth quarter of 2020. The amount by which the product liability accrual exceeds the product liability insurance receivable with respect to the Unannounced Recall is $ 26 million and includes self-insurance retention costs and deductibles. The ultimate loss to the Company of the Unannounced Recall could be materially different from the amount the Company has accrued. Intellectual Property: In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material. The table in Note 7. Product-Related Liabilities above summarizes the change in the balance sheet position of the product-related liabilities. |
Stock Incentive Plan
Stock Incentive Plan | 6 Months Ended |
Jun. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Incentive Plan | 10. STOCK IN CENTIVE PLAN Eligible employees and non-employee directors of the Company participate in the Autoliv, Inc.1997 Stock Incentive Plan, as amended and received Autoliv stock-based awards which include stock options ("SOs"), restricted stock units ("RSUs") and performance stock units ("PSUs"). For the three and six month periods ended June 30, 2021, the Company recorded approximately $ 4 million and $ 7 million, respectively, in stock-based compensation expense related to RSUs and PSUs. For the three and six month periods ended June 30, 2020, the Company recorded approximately $ 2 million and $ 4 million, respectively, in stock-based compensation expense related to RSUs and PSUs. During the three and six month periods ended June 30, 2021, approximately 47 thousand and 116 thousand shares, respectively, of common stock from the treasury stock were utilized by the Plan. During the three and six month periods ended June 30, 2020, approximately 16 thousand and 86 thousand shares, respectively, of common stock from the treasury stock were utilized by the Plan. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | 11. EARNING S PER SHARE The computation of basic and diluted EPS under the two-class method is set forth in the table below. Anti-dilutive shares outstanding were immaterial for all periods presented below. For the three and six month periods ended June 30, 2020, shares in the diluted loss per share calculation represent basic shares due to the net loss. Three months ended June 30 Six months ended June 30 (In millions, except per share amounts) 2021 2020 2021 2020 Numerator: Basic and diluted: Net income (loss) attributable to controlling interest $ 104 $ ( 175 ) $ 261 $ ( 100 ) Participating share awards with dividend 0 0 0 0 Net income (loss) applicable to common 104 ( 175 ) 261 ( 100 ) Earnings allocated to participating 1) 0 0 0 0 Net income (loss) attributable to common $ 104 $ ( 175 ) $ 261 $ ( 100 ) Denominator: 1) Basic: Weighted average common stock 87.4 87.3 87.4 87.3 Add: Weighted average stock options/ 0.3 0.0 0.3 0.0 Diluted: 87.7 87.3 87.7 87.3 Net earnings (loss) per share - basic $ 1.19 $ ( 2.00 ) $ 2.98 $ ( 1.14 ) Net earnings (loss) per share - diluted $ 1.19 $ ( 2.00 ) $ 2.98 $ ( 1.14 ) 1) The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. RELATED PAR TY TRANSACTIONS The Company purchases finished goods from Veoneer. For the three and six month periods ended June 30, 2021, related party purchases from Veoneer amounted to $ 20 million and $ 41 million, respectively. For the three and six month periods ended June 30, 2020, related party purchases from Veoneer amounted to $ 11 million and $ 29 million, respectively. Amounts due to and due from related party as of June 30, 2021 and December 31, 2020 were as follows: As of (Dollars in millions) June 30, 2021 December 31, 2020 Related party receivables 1) $ 1 $ 2 Related party payables 2) 26 27 Related party accrued expenses 3) 8 10 1) Included in Receivables, net in the Condensed Consolidated Balance Sheet. 2) Included in Accounts payable in the Condensed Consolidated Balance Sheet. 3) Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Revenue Disaggregation
Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Disaggregation | 13. REVENUE DISAGGREGATION The Company’s disaggregated revenue for the three and six month periods ended June 30, 2021 and June 30, 2020 were as follows. Net Sales by Products Three months ended June 30 Six months ended June 30 (Dollars in millions) 2021 2020 2021 2020 Airbag Products and Other 1) $ 1,310 $ 654 $ 2,773 $ 1,856 Seatbelt Products 1) 712 394 1,491 1,037 Total net sales $ 2,022 $ 1,048 $ 4,265 $ 2,893 1) Including Corporate and other sales. Net Sales by Region Three months ended June 30 Six months ended June 30 (Dollars in millions) 2021 2020 2021 2020 Asia $ 794 $ 588 $ 1,671 $ 1,185 Whereof: China 399 366 814 564 Japan 175 105 386 308 Rest of Asia 219 117 471 314 Americas 621 213 1,307 886 Europe 608 246 1,287 823 Total net sales $ 2,022 $ 1,048 $ 4,265 $ 2,893 Contract Balances Contract assets relate to the Company's rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts and is included in Other current assets in the Condensed Consolidated Balance Sheet. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. The net change in the contract assets balance, reflecting the adjustments needed to align revenue recognition for work completed but not billed, for the three and six month periods ended June 30, 2021 and for the three and six month periods ended June 30, 2020 were not material in any period. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSE QUENT EVENTS There were no reportable events subsequent to June 30, 2021. |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
New Accounting Standards | Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates ("ASUs") to the FASB’s Accounting Standards Codification ("ASC"). The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements. Adoption of new accounting standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company adopted ASU 2019-12 prospectively as of January 1, 2021, and the adoption did not have a material impact on the Company’s consolidated financial statements. Accounting standards issued but not yet adopted None that are expected to have an impact on the Company. |
Contingent Liabilities | Autoliv’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions). June 30, 2021 December 31, 2020 Fair Value Measurements Fair Value Measurements Description Nominal Derivative Derivative Nominal Derivative Derivative Derivatives not designated as hedging Foreign exchange swaps, less $ 1,300 1) $ 1 2) $ 16 3) $ 1,463 4) $ 25 5) $ 3 6) Total derivatives not designated $ 1,300 $ 1 $ 16 $ 1,463 $ 25 $ 3 1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,300 million. 2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 1 million. 3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. 4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,463 million. 5) Net amount after deducting for offsetting swaps under ISDA agreements is $ 25 million. 6) Net amount after deducting for offsetting swaps under ISDA agreements is $ 3 million. |
Fair Value of Debt | The fair value and carrying value of debt is summarized in the table below (dollars in millions). June 30, 2021 December 31, 2020 Carrying 1) Fair Carrying 1) Fair Long-term debt Bonds $ 1,359 $ 1,453 $ 1,377 $ 1,483 Loans 352 367 732 753 Other long-term debt 1 1 1 1 Total long-term debt 1,712 1,821 2,110 2,237 Short-term debt Short-term portion of long-term debt 353 356 275 278 Overdrafts and other short-term debt 10 10 27 27 Total short-term debt $ 363 $ 366 $ 302 $ 305 1) Debt as reported in balance sheet. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories are stated at the lower of cost ("FIFO") and net realizable value. The components of inventories were as follows (dollars in millions): As of June 30, 2021 December 31, 2020 Raw materials $ 416 $ 379 Work in progress 326 292 Finished products 249 220 Inventories 991 891 Inventory valuation reserve ( 90 ) ( 93 ) Total inventories, net of reserve $ 901 $ 798 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Change in Balance Sheet Position of Employee Related Restructuring Reserves | The table below summarizes the change in the balance sheet position of the employee related restructuring reserves (dollars in millions). The restructuring reserve balance is included within Accrued expenses in the Condensed Consolidated Balance Sheet. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented. Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Reserve at beginning of the period $ 113 $ 52 $ 126 $ 56 Provision - charge 1 69 2 71 Provision - reversal ( 0 ) ( 7 ) ( 0 ) ( 7 ) Cash payments ( 8 ) ( 16 ) ( 17 ) ( 20 ) Translation difference 1 2 ( 4 ) 0 Reserve at end of the period $ 107 $ 100 $ 107 $ 100 |
Product-Related Liabilities (Ta
Product-Related Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Change in Balance Sheet Position of Product-Related Liabilities | The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Reserve at beginning of the period $ 328 $ 54 $ 341 $ 72 Change in reserve 1 8 5 11 Cash payments ( 237 ) ( 4 ) ( 243 ) ( 25 ) Translation difference 11 0 0 0 Reserve at end of the period $ 103 $ 58 $ 103 $ 58 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Pension Plans, Defined Benefit | |
Schedule of Components of Net Periodic Benefit Cost | The components of total Net Periodic Benefit Cost associated with the Company’s defined benefit retirement plans are as follows (dollars in millions): U.S. Plans Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Service cost $ 2 $ 2 $ 4 $ 4 Interest cost 2 3 5 7 Expected return on plan assets ( 5 ) ( 4 ) ( 9 ) ( 8 ) Amortization of prior service (credit) cost 1 ( 1 ) 0 ( 1 ) Amortization of actuarial loss 1 1 1 1 Net Periodic Benefit Cost $ 1 $ 1 $ 1 $ 3 Non-U.S. Plans Three months ended June 30 Six months ended June 30 2021 2020 2021 2020 Service cost $ 3 $ 3 $ 6 $ 6 Interest cost 2 1 3 3 Expected return on plan assets ( 1 ) ( 0 ) ( 1 ) ( 1 ) Amortization of prior service (credit) cost ( 0 ) 0 0 0 Amortization of actuarial loss 1 0 1 1 Net Periodic Benefit Cost $ 5 $ 4 $ 9 $ 9 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted EPS under Two-class Method | The computation of basic and diluted EPS under the two-class method is set forth in the table below. Anti-dilutive shares outstanding were immaterial for all periods presented below. For the three and six month periods ended June 30, 2020, shares in the diluted loss per share calculation represent basic shares due to the net loss. Three months ended June 30 Six months ended June 30 (In millions, except per share amounts) 2021 2020 2021 2020 Numerator: Basic and diluted: Net income (loss) attributable to controlling interest $ 104 $ ( 175 ) $ 261 $ ( 100 ) Participating share awards with dividend 0 0 0 0 Net income (loss) applicable to common 104 ( 175 ) 261 ( 100 ) Earnings allocated to participating 1) 0 0 0 0 Net income (loss) attributable to common $ 104 $ ( 175 ) $ 261 $ ( 100 ) Denominator: 1) Basic: Weighted average common stock 87.4 87.3 87.4 87.3 Add: Weighted average stock options/ 0.3 0.0 0.3 0.0 Diluted: 87.7 87.3 87.7 87.3 Net earnings (loss) per share - basic $ 1.19 $ ( 2.00 ) $ 2.98 $ ( 1.14 ) Net earnings (loss) per share - diluted $ 1.19 $ ( 2.00 ) $ 2.98 $ ( 1.14 ) 1) The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Summary of Amounts Due to and Due from Related Party | Amounts due to and due from related party as of June 30, 2021 and December 31, 2020 were as follows: As of (Dollars in millions) June 30, 2021 December 31, 2020 Related party receivables 1) $ 1 $ 2 Related party payables 2) 26 27 Related party accrued expenses 3) 8 10 1) Included in Receivables, net in the Condensed Consolidated Balance Sheet. 2) Included in Accounts payable in the Condensed Consolidated Balance Sheet. 3) Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Revenue Disaggregation (Tables)
Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated Revenue by Products and Region | The Company’s disaggregated revenue for the three and six month periods ended June 30, 2021 and June 30, 2020 were as follows. Net Sales by Products Three months ended June 30 Six months ended June 30 (Dollars in millions) 2021 2020 2021 2020 Airbag Products and Other 1) $ 1,310 $ 654 $ 2,773 $ 1,856 Seatbelt Products 1) 712 394 1,491 1,037 Total net sales $ 2,022 $ 1,048 $ 4,265 $ 2,893 1) Including Corporate and other sales. Net Sales by Region Three months ended June 30 Six months ended June 30 (Dollars in millions) 2021 2020 2021 2020 Asia $ 794 $ 588 $ 1,671 $ 1,185 Whereof: China 399 366 814 564 Japan 175 105 386 308 Rest of Asia 219 117 471 314 Americas 621 213 1,307 886 Europe 608 246 1,287 823 Total net sales $ 2,022 $ 1,048 $ 4,265 $ 2,893 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2021Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Fair Value, Measurements, Nonrecurring | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Asset impairment charges | $ 0 | $ 0 | |||
Not Designated as Hedging Instrument | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Derivatives designated as hedging instruments | $ 0 | 0 | $ 0 | ||
Gains and losses recognized in other non-operating items, net | $ 20,000,000 | $ 7,000,000 | $ (38,000,000) | $ (2,000,000) |
Derivative Financial Assets and
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Not Designated as Hedging Instrument - Fair Value, Measurements, Recurring - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | ||
Derivatives, Fair Value [Line Items] | ||||
Nominal volume | $ 1,300,000,000 | $ 1,463,000,000 | ||
Other current assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset (Other current assets) | 1,000,000 | 25,000,000 | ||
Other current liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liability (Other current liabilities) | 16,000,000 | 3,000,000 | ||
Less Than Six Months | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Nominal volume | 1,300,000,000 | [1] | 1,463,000,000 | [2] |
Less Than Six Months | Other current assets | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset (Other current assets) | 1,000,000 | [3] | 25,000,000 | [4] |
Less Than Six Months | Other current liabilities | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liability (Other current liabilities) | $ 16,000,000 | [5] | $ 3,000,000 | [6] |
[1] | Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,300 million. | |||
[2] | Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,463 million. | |||
[3] | Net amount after deducting for offsetting swaps under ISDA agreements is $ 1 million. | |||
[4] | Net amount after deducting for offsetting swaps under ISDA agreements is $ 25 million. | |||
[5] | Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. | |||
[6] | Net amount after deducting for offsetting swaps under ISDA agreements is $ 3 million. |
Derivative Financial Assets a_2
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - Not Designated as Hedging Instrument - Foreign Exchange Swaps - Fair Value, Measurements, Recurring - Less Than Six Months - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative notional volume, amount after offsetting swaps | $ 1,300 | $ 1,463 |
Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, amount after offsetting swaps | 1 | 25 |
Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, amount after offsetting swaps | $ 16 | $ 3 |
Fair Value of Debt (Detail)
Fair Value of Debt (Detail) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | $ 1,712 | $ 2,110 |
Short-term debt | [1] | 363 | 302 |
Long-term debt, fair value | 1,821 | 2,237 | |
Short-term debt, fair value | 366 | 305 | |
Bonds | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 1,359 | 1,377 |
Long-term debt, fair value | 1,453 | 1,483 | |
Other Long-term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 1 | 1 |
Long-term debt, fair value | 1 | 1 | |
Loans | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 352 | 732 |
Long-term debt, fair value | 367 | 753 | |
Overdrafts and Other Short-Term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Short-term debt | [1] | 10 | 27 |
Short-term debt, fair value | 10 | 27 | |
Short-Term Portion of Long-Term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Short-term debt | [1] | 353 | 275 |
Short-term debt, fair value | $ 356 | $ 278 | |
[1] | Debt as reported in balance sheet. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Taxes [Line Items] | ||||
Effective income tax rate | 31.30% | 29.30% | 29.20% | 26.50% |
Increase/(decrease) in effective tax rate due to impact of discrete tax items | 0.20% | 4.40% | 0.10% | 7.60% |
Net increase to income tax reserves for unrecognized tax benefits based on tax positions related to current and prior years | $ 4 | |||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | $ 50 | 50 | ||
Current Tax Payable Within Other Current Liabilities | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | 6 | 6 | ||
Non-Current Tax Payable Within Other Non-current Liabilities | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | $ 44 | $ 44 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 416 | $ 379 |
Work in progress | 326 | 292 |
Finished products | 249 | 220 |
Inventories | 991 | 891 |
Inventory valuation reserve | (90) | (93) |
Total inventories, net of reserve | $ 901 | $ 798 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Millions | Jun. 30, 2021USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | $ 107 |
Structural Efficiency Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | 52 |
Footprint Optimization Activities | Europe | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | $ 38 |
Schedule of Changes in Balance
Schedule of Changes in Balance Sheet Position of Employee Related Restructuring Reserves (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reserve at end of the period | $ 107 | $ 107 | ||
Restructuring employee-related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reserve at beginning of the period | 113 | $ 52 | 126 | $ 56 |
Provision - charge | 1 | 69 | 2 | 71 |
Provision - reversal | 0 | (7) | 0 | (7) |
Cash payments | (8) | (16) | (17) | (20) |
Translation difference | 1 | 2 | (4) | 0 |
Reserve at end of the period | $ 107 | $ 100 | $ 107 | $ 100 |
Product-Related Liabilities - A
Product-Related Liabilities - Additional Information (Detail) $ in Millions | Jun. 30, 2021USD ($) |
Product Warranty Liability [Line Items] | |
Insurance receivables related to recall issues | $ 126 |
Accrued Expenses | |
Product Warranty Liability [Line Items] | |
Indemnification liabilities | $ 8 |
Summary of Change in Balance Sh
Summary of Change in Balance Sheet Position of Product-Related Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product Warranties Disclosures [Abstract] | ||||
Reserve at beginning of the period | $ 328 | $ 54 | $ 341 | $ 72 |
Change in reserve | 1 | 8 | 5 | 11 |
Cash payments | (237) | (4) | (243) | (25) |
Translation difference | 11 | 0 | 0 | 0 |
Reserve at end of the period | $ 103 | $ 58 | $ 103 | $ 58 |
Components of Net Periodic Bene
Components of Net Periodic Benefit Cost (Detail) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
U.S. Pension Plans | ||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 2 | $ 2 | $ 4 | $ 4 |
Interest cost | 2 | 3 | 5 | 7 |
Expected return on plan assets | (5) | (4) | (9) | (8) |
Amortization of prior service (credit) cost | 1 | (1) | 0 | (1) |
Amortization of actuarial loss | 1 | 1 | 1 | 1 |
Net Periodic Benefit Cost | 1 | 1 | 1 | 3 |
Non-U.S. Pension Plans | ||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 3 | 3 | 6 | 6 |
Interest cost | 2 | 1 | 3 | 3 |
Expected return on plan assets | (1) | 0 | (1) | (1) |
Amortization of prior service (credit) cost | 0 | 0 | 0 | 0 |
Amortization of actuarial loss | 1 | 0 | 1 | 1 |
Net Periodic Benefit Cost | $ 5 | $ 4 | $ 9 | $ 9 |
Contingent Liabilities - Additi
Contingent Liabilities - Additional Information (Detail) Vehicle in Millions, $ in Millions | Jun. 29, 2016Vehicle | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Loss Contingencies [Line Items] | |||||||
Product liability accrual | $ 103 | $ 328 | $ 341 | $ 58 | $ 54 | $ 72 | |
Damages from Product Defects | |||||||
Loss Contingencies [Line Items] | |||||||
Number of vehicles recalled | Vehicle | 1.4 | ||||||
Toyota Recall | Damages from Product Defects | |||||||
Loss Contingencies [Line Items] | |||||||
Product liability accrual | 25 | ||||||
Product liability insurance receivable | $ 26 | ||||||
Unannounced Recall | Damages from Product Defects | |||||||
Loss Contingencies [Line Items] | |||||||
Product liability accrual | $ 26 |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Detail) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share Based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares from treasury stock utilized by the Plan | 47 | 16 | 116 | 86 |
Restricted Stock Units And Performance Stock Units | ||||
Share Based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock compensation cost | $ 4 | $ 2 | $ 7 | $ 4 |
Schedule of Computation of Basi
Schedule of Computation of Basic and Diluted EPS under Two-class Method (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Basic and diluted: | |||||
Net income (loss) attributable to controlling interest | $ 104 | $ (175) | $ 261 | $ (100) | |
Participating share awards with dividend equivalent rights | 0 | 0 | 0 | 0 | |
Net income (loss) applicable to common shareholders | 104 | (175) | 261 | (100) | |
Earnings allocated to participating share awards | [1] | 0 | 0 | 0 | 0 |
Net income (loss) attributable to common shareholders | $ 104 | $ (175) | $ 261 | $ (100) | |
Denominator: | |||||
Basic: Weighted average common stock | [1] | 87.4 | 87.3 | 87.4 | 87.3 |
Add: Weighted average stock options/share awards | [1] | 0.3 | 0 | 0.3 | 0 |
Diluted: | 87.7 | 87.3 | 87.7 | 87.3 | |
Net earnings (loss) per share - basic | [2] | $ 1.19 | $ (2) | $ 2.98 | $ (1.14) |
Net earnings (loss) per share - diluted | [2] | $ 1.19 | $ (2) | $ 2.98 | $ (1.14) |
[1] | The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. | ||||
[2] | Participating share awards with the right to receive dividend equivalents are (under the two-class method) excluded from the earnings per share calculation (see Note 11 to the unaudited condensed consolidated financial statements). |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Veoneer, Inc. | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 20 | $ 11 | $ 41 | $ 29 |
Summary of Amounts Due to and D
Summary of Amounts Due to and Due from Related Party (Detail) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |||
Related party receivables | [1] | $ 1 | $ 2 |
Related party payables | [2] | 26 | 27 |
Related party accrued expenses | [3] | $ 8 | $ 10 |
[1] | Included in Receivables, net in the Condensed Consolidated Balance Sheet. | ||
[2] | Included in Accounts payable in the Condensed Consolidated Balance Sheet. | ||
[3] | Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Schedule of Disaggregated Reven
Schedule of Disaggregated Revenue by Products and Region (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | $ 2,022 | $ 1,048 | $ 4,265 | $ 2,893 | |
Airbag Products and Other | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | [1] | 1,310 | 654 | 2,773 | 1,856 |
Seatbelt Products | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | [1] | 712 | 394 | 1,491 | 1,037 |
Asia | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 794 | 588 | 1,671 | 1,185 | |
China | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 399 | 366 | 814 | 564 | |
Japan | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 175 | 105 | 386 | 308 | |
Rest of Asia | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 219 | 117 | 471 | 314 | |
Americas | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | 621 | 213 | 1,307 | 886 | |
Europe | |||||
Disaggregation Of Revenue [Line Items] | |||||
Net sales | $ 608 | $ 246 | $ 1,287 | $ 823 | |
[1] | Including Corporate and other sales. |