Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 19, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | VNE | |
Entity Registrant Name | Veoneer, Inc. | |
Entity Central Index Key | 1,733,186 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 87,166,935 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 526 | $ 567 | $ 1,692 | $ 1,729 |
Cost of sales | (428) | (458) | (1,371) | (1,387) |
Gross profit | 99 | 109 | 321 | 342 |
Selling, general and administrative expenses | (44) | (28) | (112) | (83) |
Research, development and engineering expenses, net | (109) | (91) | (334) | (280) |
Amortization of intangibles | (5) | (6) | (16) | (30) |
Other income, net | 1 | 0 | 18 | 12 |
Operating loss | (58) | (16) | (122) | (39) |
Loss from equity method investment | (15) | (10) | (45) | (18) |
Interest income | 3 | 0 | 4 | 0 |
Interest expense | 0 | 0 | (1) | 0 |
Other non-operating items, net | 1 | 0 | 1 | 0 |
Loss before income taxes | (70) | (26) | (163) | (56) |
Income tax expense | (3) | (10) | (12) | (32) |
Net loss | (72) | (36) | (175) | (88) |
Less: Net loss attributable to non-controlling interest | (5) | (3) | (13) | (7) |
Net loss attributable to controlling interest | $ (68) | $ (33) | $ (162) | $ (81) |
Net loss per share - basic (in dollars per share) | $ (0.78) | $ (0.38) | $ (1.86) | $ (0.93) |
Net loss per share - diluted (in dollars per share) | $ (0.78) | $ (0.38) | $ (1.86) | $ (0.93) |
Weighted average number of shares outstanding, (in millions) (in shares) | 87,150 | 87,130 | 87,150 | 87,130 |
Weighted average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,150 | 87,130 | 87,150 | 87,130 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (72) | $ (36) | $ (175) | $ (88) |
Other comprehensive income (loss), before tax: | ||||
Change in cumulative translation adjustment | (2) | 6 | (6) | 21 |
Net change in cash flow hedges | 0 | (4) | 1 | (10) |
Pension liability | (1) | 0 | (2) | 0 |
Other comprehensive income (loss), before tax | (3) | 2 | (7) | 11 |
Expense for taxes | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | (3) | 2 | (7) | 11 |
Comprehensive loss | (75) | (34) | (182) | (77) |
Less: Comprehensive loss attributable to non-controlling interest | (9) | (2) | (16) | (4) |
Comprehensive loss attributable to controlling interest | $ (66) | $ (32) | $ (166) | $ (73) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 919 | $ 0 |
Short-term investments | 5 | 0 |
Receivables, net | 437 | 460 |
Inventories, net | 166 | 154 |
Related party receivables | 63 | 0 |
Prepaid expenses and contract assets | 33 | 34 |
Other current assets | 25 | 0 |
Total current assets | 1,648 | 648 |
Property, plant and equipment, net | 456 | 362 |
Equity method investment | 120 | 98 |
Goodwill | 291 | 292 |
Intangible assets, net | 102 | 122 |
Deferred tax assets | 28 | 30 |
Related party notes receivables | 0 | 76 |
Other non-current assets | 82 | 34 |
Total assets | 2,728 | 1,662 |
Liabilities and equity | ||
Accounts payable | 356 | 323 |
Related party payables | 3 | 5 |
Accrued expenses | 237 | 195 |
Income tax payable | 10 | 41 |
Other current liabilities | 24 | 26 |
Total current liabilities | 630 | 590 |
Related party long-term debt | 12 | 62 |
Pension liability | 19 | 14 |
Deferred tax liabilities | 16 | 17 |
Other non-current liabilities | 11 | 22 |
Total non-current liabilities | 58 | 115 |
Commitments and contingencies | ||
Equity | ||
Common stock (par value $1.00, 325 million shares authorized, 87 million shares issued and outstanding at September 30, 2018 and December 31, 2017) | 87 | 0 |
Additional paid-in capital | 1,929 | 0 |
Accumulated deficit | (68) | 0 |
Net Former Parent investment | 0 | 844 |
Accumulated other comprehensive income (loss) | (12) | (8) |
Total equity | 1,936 | 836 |
Non-controlling interest | 104 | 121 |
Total equity and non-controlling interest | 2,040 | 957 |
Total liabilities, equity and non-controlling interest | $ 2,728 | $ 1,662 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Par Value (in dollars per share) | $ 1 | $ 1 |
Shares Authorized (in shares) | 325,000,000 | 325,000,000 |
Shares Issued (in shares) | 87,000,000 | 87,000,000 |
Shares Outstanding (in shares) | 87,000,000 | 87,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid In Capital | Net Former Parent Investment | Accumulated deficit | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2016 | $ 1,090 | $ 877 | $ (29) | $ 242 | |||
Comprehensive Income (Loss): | |||||||
Net loss | (88) | (81) | (7) | ||||
Foreign currency translation | 21 | 18 | 3 | ||||
Net change in cash flow hedges | (10) | (10) | |||||
Total Comprehensive Income (Loss) | (77) | (81) | 8 | (4) | |||
Net transfers from Former Parent | 179 | 180 | (1) | ||||
Balance at end of period at Sep. 30, 2017 | 1,193 | 976 | (21) | 237 | |||
Balance at beginning of period at Dec. 31, 2017 | 957 | $ 0 | $ 0 | 844 | $ 0 | (8) | 121 |
Comprehensive Income (Loss): | |||||||
Net loss | (175) | (95) | (68) | (13) | |||
Foreign currency translation | (6) | (3) | (3) | ||||
Net change in cash flow hedges | 1 | 1 | |||||
Pension liability | (2) | (2) | |||||
Reclassification of Former Parent's net investment and issuance of ordinary shares in connection with separation | 11 | 87 | 1,926 | (2,002) | |||
Stock based compensation expense | 3 | 3 | |||||
Total Comprehensive Income (Loss) | (169) | 87 | 1,929 | (2,097) | (68) | (4) | (16) |
Net transfers from Former Parent | 1,252 | 1,253 | (1) | ||||
Balance at end of period at Sep. 30, 2018 | $ 2,040 | $ 87 | $ 1,929 | $ 0 | $ (68) | $ (12) | $ 104 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net loss | $ (175) | $ (88) |
Depreciation and amortization | 82 | 91 |
Contingent consideration write-down | (14) | (13) |
Other, net | (4) | (23) |
Change in operating assets and liabilities: | ||
Accounts payable | 0 | (34) |
Related party receivables and payables, net | (58) | 2 |
Income taxes | (31) | 4 |
Accrued expenses | 51 | (8) |
Other current assets and liabilities, net | (22) | 1 |
Receivables, gross | 13 | 18 |
Inventories, gross | (16) | 12 |
Prepaid expenses and contract assets | (7) | (12) |
Net cash used in operating activities | (181) | (50) |
Investing activities | ||
Net decrease (increase) in related party notes receivable | 76 | (5) |
Capital expenditures | (123) | (70) |
Equity method investment | (71) | (112) |
Short-term investments | (5) | 0 |
Proceeds from sale of property, plant and equipment | 3 | 5 |
Net cash used in investing activities | (120) | (182) |
Financing activities | ||
Cash provided at separation by Former Parent | 980 | 0 |
Net transfers from Former Parent | 275 | 179 |
(Decrease) / increase in related party long-term debt | (49) | 53 |
Net cash provided by financing activities | 1,206 | 232 |
Effect of exchange rate changes on cash and cash equivalents | 14 | 0 |
Increase in cash and cash equivalents | 919 | 0 |
Cash and cash equivalents at beginning of year | 0 | 0 |
Cash and cash equivalents at end of year | $ 919 | $ 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation On June 29, 2018 (the “Distribution Date”), Veoneer, Inc. (“Veoneer” or “the Company”) became an independent, publicly-traded company as a result of the distribution by Autoliv, Inc. (“Autoliv” or “Former Parent”) of 100 percent of the outstanding common stock of Veoneer to the stockholders of Autoliv (the “Spin-Off”). Each Autoliv stockholder and holder of Autoliv’s Swedish Depository Receipts (SDRs) of record as of certain specified dates received one share of Veoneer common stock or one Veoneer SDR, respectively, for every one share of Autoliv common stock or Autoliv SDR held as of a certain date. The Spin-Off was completed on June 29, 2018 in a tax free transaction pursuant to Section 355 of the U.S. Internal Revenue Code. On July 2, 2018, Veoneer common stock began regular trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “VNE” and Veoneer SDRs began trading on National Association of Securities Dealers (“NASDAQ”) Stockholm under the symbol “VNE-SDB”. Agreements entered into between Veoneer and Autoliv in connection with the Spin-Off govern the relationship between the parties following the Spin-Off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided on a temporary basis between the parties. In advance of the Spin-Off, Autoliv completed a series of internal transactions, in which Autoliv transferred its Electronics business to Veoneer. These transactions are referred to herein as the “internal reorganization”. The internal reorganization was completed on April 1, 2018. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provides brake control and actuation systems. The accompanying Unaudited Condensed Consolidated Financial Statements for all periods presented have been prepared from Autoliv’s historical accounting records and are presented on a stand-alone basis as if the operations had been conducted independently from Autoliv. Prior to the Spin-Off, Autoliv’s net investment in these operations (Former Parent equity) is shown in lieu of a controlling interest’s equity in the Unaudited Condensed Consolidated Financial Statements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) will be reflected in Retained earnings (Accumulated deficit). Accordingly, for periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Condensed Consolidated Financial Statements"). The Unaudited Condensed Consolidated Financial Statements include the historical operations, assets, and liabilities that are considered to comprise the Veoneer business. All of the allocations and estimates in the Unaudited Condensed Consolidated Financial Statements are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of Veoneer included herein may not be indicative of what they would have been had Veoneer actually been a stand-alone entity during such periods, nor are they necessarily indicative of Veoneer future results. The accompanying Unaudited Condensed Consolidated Financial Statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Combined Financial Statements for the year ended December 31, 2017 and corresponding notes in the Company’s Information Statement included in the current report on Form 8-K filed with the SEC on July 2, 2018. Certain amounts in the prior year’s Condensed Combined Financial Statements and related footnotes thereto have been reclassified to conform to the current year presentation. Certain amounts in the Unaudited Condensed Consolidated Financial Statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A summary of significant accounting policies is included in the Company’s Information Statement included in the current report on Form 8-K filed with the SEC on July 2, 2018. A discussion of cash and cash equivalents is included here as an additional significant policy which has become relevant beginning in the quarter ended June 30, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Veoneer held approximately $919 million of cash and cash equivalents and $5 million of short-term investments as of September 30, 2018. The carrying amounts reflected in the Condensed Consolidated Balance Sheets for cash and cash equivalents and short-term investments approximate their fair values based on Level 1 of the fair value hierarchy. New Accounting Standards Adoption of New Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI) , which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”). Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company adopted early ASU 2018-02 as of January 1, 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost , which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the Unaudited Condensed Consolidated Statements of Operations separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic post-retirement benefit cost in the Unaudited Condensed Consolidated Statements of Operations. The Company adopted ASU 2017-07 in the first quarter of 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented (see Note 10 Retirement Plans). In October 2016, the FASB issued ASU 2016-16 , Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory , which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Historical GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to equity as of the beginning of the period of adoption. The Company's adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Consolidated Financial Statements. The table below shows the adjustments made due to ASU 2014-09. Balance Sheet (Dollars in millions) Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Assets Inventories, net $ 154 $ (5 ) $ 149 Prepaid expenses and contract assets 34 7 41 Equity Net Former Parent investment 844 1 845 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Income Statement (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes As Reported Balances without adoption of ASC 606 Effect of Changes Net sales $ 526 $ 525 $ 1 $ 1,692 $ 1,691 $ 1 Cost of sales (428 ) (427 ) (1 ) (1,371 ) (1,370 ) (1 ) Operating loss (58 ) (58 ) — (122 ) (122 ) — As of September 30, 2018 Balance Sheet (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Assets Inventories, net $ 166 $ 173 $ (6 ) Prepaid expenses and contract assets 33 25 8 Equity Additional paid-in capital 1,929 1,928 1 Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The ASU removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. The ASU requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The ASU removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The ASU requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact on its disclosures. In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815) , Targeted improvements to accounting for hedging activities . The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of ASU 2017-12 will not have a material impact on the Unaudited Condensed Consolidated Financial Statements since the Company closed its cash flow hedges in the first quarter of 2018. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016-02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period financial statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. In addition, we intend to elect the application of permitted practical expedients under the transition guidance within the new standard, which amongst other things, will allow Veoneer to retain the historical lease classification. During the third quarter, the Company continued its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. Further, the Company is assessing if there are any “embedded leases” in arrangements with its suppliers that may result in right-of-use assets. In addition, the Company has continued its implementation of a new system to assist with lease accounting. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard, including consideration of control and process changes to capture lease data necessary to apply ASU 2016-02. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue In accordance with ASC 606, Revenue from Contracts with Customers , revenue is measured based on consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price concessions or annual price adjustments) and estimated at contract inception. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. In addition, from time to time, Veoneer may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless certain criteria are met warranting capitalization. If the payments are capitalized, the amounts are amortized as the related goods are transferred. As of September 30, 2018, and December 31, 2017, the Company capitalized $52 million and $23 million , respectively, in Other non-current assets related to capitalized payments. The Company assesses these amounts for impairment. There was no impairment. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. Nature of goods and services The following is a description of principal activities from which the Company generates its revenue. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The principal activities are essentially the same for each of the segments. Both of the segments generate revenue from the sale of production parts to original equipment manufacturers (“OEMs”). The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any price concession or annual price adjustments, is based on their stand-alone selling prices for each of the products. The stand-alone selling prices are determined based on the cost-plus margin approach. The Company recognizes revenue for production parts primarily at a point in time. For production parts with revenue recognized at a point in time, the Company recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically F.O.B. shipping point). There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and a related asset and associated cost of goods sold and inventory. However, the financial impact of these contracts is immaterial considering the very short production cycles and limited inventory days on hand, which is typical for the automotive industry. The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e. price concessions or annual price adjustments). Customers typically pay for the production parts based on customary business practices with payment terms averaging 30 days . Disaggregation of revenue In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region (Dollars in millions) Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 98 $ 85 $ 183 $ 114 $ 89 $ 203 Americas 166 15 181 166 29 195 Europe 163 — 163 170 — 170 Total region sales 426 100 526 449 118 567 Less: intercompany sales — — — — — — Total $ 426 $ 100 $ 526 $ 449 $ 118 $ 567 Net Sales by Region (Dollars in millions) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 314 $ 280 $ 594 $ 353 $ 264 $ 617 Americas 517 45 562 525 98 624 Europe 537 — 537 491 — 491 Total region sales 1,367 325 1,692 1,369 363 1,732 Less: intercompany sales — — — — (2 ) (3 ) Total $ 1,367 $ 325 $ 1,692 $ 1,369 $ 361 $ 1,729 Net Sales by Products (Dollars in millions) Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 226 $ — $ 226 $ 251 $ — $ 251 Active Safety products 201 — 201 198 — 198 Brake Systems — 100 100 — 118 118 Total product sales 426 100 526 449 118 567 Less: intercompany sales — — — — — — Total net sales $ 426 $ 100 $ 526 $ 449 $ 118 $ 567 Net Sales by Products (Dollars in millions) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 739 $ — $ 739 $ 788 $ — $ 788 Active Safety products 628 — 628 581 — 581 Brake Systems — 325 325 — 363 363 Total product sales 1,367 325 1,692 1,369 363 1,732 Less: intercompany sales — — — — (2 ) (3 ) Total net sales $ 1,367 $ 325 $ 1,692 $ 1,369 $ 361 $ 1,729 Contract balances The contract assets related 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. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. There have been no impairment losses recognized related to contract assets arising from the Company’s contracts with customers. The following tables provide information about receivables and contract assets from contracts with customers. Contract Balances with Customers (Dollars in millions) As of September 30, 2018 December 31, 2017 Receivables, net $ 437 $ 460 Contract assets 1 8 — 1 Included in prepaid expenses and contract assets Receivables, net of allowance (Dollars in millions) As of September 30, 2018 December 31, 2017 Receivables $ 440 $ 462 Allowance at beginning of period (2 ) (4 ) Net decrease/(increase) of allowance (1 ) 2 Allowance at end of period (3 ) (2 ) Receivables, net of allowance $ 437 $ 460 Changes in the contract asset balances during the period are as follows: Change in Contract Balances with Customers 1 (Dollars in millions) Three months ended September 30, 2018 Nine months ended September 30, 2018 Contract assets Contract assets Beginning balance $ 7 $ — Increases due to cumulative catch up adjustment 1 8 Increases due to revenue recognized 8 23 Decreases due to transfer to receivables (8 ) (23 ) Ending balance $ 8 $ 8 1 The contract asset is determined at each period end, this table reflects the rollforward of the period end balance. Contract costs As of September 30, 2018, the Company has capitalized $12 million of direct and incremental contract costs incurred in connection with obtaining a contract with a customer. These costs will be amortized as the related goods are transferred. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The amount of fulfillment costs was not material for any period presented. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s Unaudited Condensed Consolidated Financial Statements prospectively from their date of acquisition. Fotonic i Norden dp AB On November 1, 2017, Autoliv completed the acquisition of all the shares in Fotonic i Norden dp AB (Fotonic), headquartered in Stockholm and Skellefteå in Sweden which were transferred to Veoneer in connection with the Spin-Off. The final acquisition date fair value of the total consideration transferred was $17 million , consisting of a $15 million cash payment and $2 million of deferred purchase consideration, payable at the 18 month anniversary of the closing date. The deferred purchase consideration reflects the hold-back amount as stipulated in the share purchase agreement. The transaction has been accounted for as a business combination. The balance of the deferred purchase consideration remains unchanged at $2 million as of September 30, 2018. Fotonic provides Lidar and Time of Flight camera expertise and the acquisition included 35 Lidar and Time of Flight engineering experts, in addition to defined tangible and intangible assets. The strength of the acquired competence is on the Lidar and Time of Flight camera hardware side which form a complement to Veoneer’s skillset in the Lidar software and algorithms area. Lidar technology is an enabling technology for Highly Automated Driving and considered the primary sensor by all system developers. Fotonic is being reported in the Electronics segment. The net assets acquired as of the acquisition date amounted to $17 million . The final fair values of identifiable assets acquired consisted of intangible assets of $4 million and goodwill of $13 million . Acquired intangibles consisted of the fair value of background IP (patent & technical know-how). The useful life of the IP is five years and will be amortized on a straight-line basis . The recognized goodwill primary reflects the valuation of the acquired workforce of specialist engineers. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Items Measured at Fair Value on a Recurring Basis Derivative instruments - The Company uses derivative financial instruments, “derivatives”, to mitigate the market risk that occurs from its exposure to changes in interest 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 risk policy. The derivatives outstanding as of September 30, 2018 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying debt and no swaps have a maturity beyond six months . All derivatives are recognized in the Unaudited Condensed Consolidated Financial Statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other 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 entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates. The Company’s derivatives are classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods. During the first quarter of 2018, forward contracts designated as cash flow hedges of certain external purchasing were terminated. The loss associated with such termination was not material. Financial Statement Presentation The Company enters into master netting agreements, International Swaps and Derivatives Association (ISDA) agreements with all derivative counterparties. The netting agreements allow for netting of exposures in the event of default or breach of the counterparty agreement. The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, as follows: September 30, 2018 Fair Value Measurements Nominal Value Derivative Asset (Other current/non current assets) Derivative Liability (Other current/non current liabilities) Derivatives not designated as hedging instruments Foreign exchange swaps, less than 6 months $ 108 $ 1 $ — Total derivatives not designated as hedging instruments $ 108 $ 1 $ — December 31, 2017 Fair Value Measurements Nominal Value Derivative Asset (Other current/non current assets) Derivative Liability (Other current/non current liabilities) Derivatives designated as hedging instruments Foreign exchange forward contracts, less than 1 year (cash flow hedge) $ 67 $ — $ 1 Total derivatives designated as hedging instruments $ 67 $ — $ 1 Gains and losses on derivative financial instruments for the three and nine months ended September 30, 2018 and 2017 are as follows: Three months ended September 30, 2018 September 30, 2017 Foreign exchange forward contracts Foreign exchange swaps Foreign exchange forward contracts Foreign exchange swaps Foreign currency risk - Cost of sales: Recorded into gain (loss) $ — $ (1 ) $ — $ (1 ) Recorded gains (loss) into AOCI net of tax — — (3 ) — Less: reclassified from AOCI into gain (loss) — — 2 — $ — $ (1 ) $ (4 ) $ (1 ) Nine months ended September 30, 2018 September 30, 2017 Foreign exchange forward contracts Foreign exchange swaps Foreign exchange forward contracts Foreign exchange swaps Foreign currency risk - Cost of sales: Recorded into gain (loss) $ — $ — $ — $ 1 Recorded gains (loss) into AOCI net of tax — — (6 ) — Less: Reclassified from AOCI gain (loss) (1 ) — 5 — $ (1 ) $ — $ (10 ) $ 1 Contingent consideration - The fair value of the contingent consideration relating to the M/A-COM acquisition on August 17, 2015 is re-measured on a recurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. The Company adjusted the fair value of the earn-out liability to $14 million in the first quarter of 2017 based on actual revenue levels to date as well as changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period. Income of approximately $13 million was recognized within Other income in the Unaudited Condensed Consolidated Statements of Operations in the first quarter of 2017 due to the decrease in the contingent consideration liability. The remaining fair value of the earn-out liability of $14 million as of December 31, 2017 was fully released to and recognized within Other income in the first quarter of 2018, driven by changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period such that management no longer believes that there are any scenarios under which the earn-out criteria could be met. Management has updated its analysis as of September 30, 2018 and continues to believe that the fair value of the contingent consideration is $0 million . Items Measured at Fair Value on a Non-Recurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of 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. The tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of September 30, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 (Dollars in millions) Fair value measurements Level 3 Impairment Losses Fair value measurements Level 3 Impairment Losses Goodwill 1 $ 291 $ — $ 292 $ (234 ) Intangible assets, net 2 102 — 122 (12 ) 1 In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to VNBS, resulting in an impairment loss of $234 million , which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of September 30, 2018 and December 31, 2017 was not measured at fair value as impairment indicators did not exist. 2 In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of September 30, 2018 and December 31, 2017 was not measured at fair value as impairment indicators did not exist. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision for the three month and nine month periods ended September 30 , 2018 was $3 million and $12 million , respectively. The income tax provision for the three month and nine month periods ended September 30, 2017 was $10 million and $32 million , respectively. The income tax provision in 2018 was primarily impacted by a reduction in the pre tax earnings of the Company’s profitable subsidiaries. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has completed its accounting for the effects on the Company’s deferred tax balances as of the enactment date. Pursuant to the Tax Matters Agreement entered into with Autoliv in connection with the Spin-Off, Autoliv is the primary obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the Company is not liable for any transition taxes under the Act. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. Valuation allowances have been established for the Company’s United States, Swedish, and Japanese operations and the Company’s joint venture in Japan. The Company has reserves for income taxes that represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. Any income tax liabilities resulting from operations prior to April 1, 2018, are assumed to be settled with Former Parent on the last day Veoneer was part of the Autoliv group and were relieved through the Former Parent company investment. There were no material changes to the Company’s uncertain tax positions as of September 30, 2018. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. Under local tax law, a Veoneer entity may have been required to file its income tax returns combined with an Autoliv entity up to and including the date of the Spin-Off. Subsequent to the Spin-Off, Veoneer will file its income tax returns on a stand-alone basis. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost (principally on a first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of September 30, 2018 December 31, 2017 Raw materials $ 107 $ 90 Work in progress 11 21 Finished products 71 70 Inventories $ 189 $ 181 Inventory valuation reserve (23 ) (27 ) Total inventories, net of reserve $ 166 $ 154 |
Equity Method Investment
Equity Method Investment | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment As of September 30, 2018, the Company has one equity method investment. On April 18, 2017, Autoliv and Volvo Cars completed the formation of their joint venture, Zenuity AB. Autoliv’s interest in Zenuity was transferred to Veoneer in connection with the Spin-Off. Autoliv made an initial cash contribution of SEK 1 billion (approximately $111 million as of April 18, 2017) and also contributed intellectual property, lab equipment and an assembled workforce. Veoneer and Volvo Cars each have a 50% ownership of Zenuity and neither entity has the ability to exert control over the joint venture, in form or in substance. Veoneer accounts for its investment in Zenuity under the equity method and the investment is shown in the line item Equity method investment in the Condensed Consolidated Balance Sheets. The contributed intellectual property, lab equipment, and an assembled workforce have been assessed to constitute a business as defined by ASU 2017-1, Business Combinations (Topic 805) – Clarifying the Definition of a Business . FASB ASC Topic 810, Consolidation states that when a group of assets that constitute a business is derecognized, the carrying amounts of the assets and liabilities are removed from the Condensed Consolidated Balance Sheets. The investor would recognize a gain or loss based on the difference between the sum of the fair value of any consideration received less the carrying amount of the group of assets and liabilities contributed at the date of the transaction. The equity value of Zenuity on the date of the closing of the transaction of approximately $250 million has been calculated using the discounted cash flow method of the income approach. Veoneer’s 50% share of the equity value, approximately $125 million , represented its investment in Zenuity, including its cash contribution at inception. At the end of the first quarter of 2018, Veoneer contributed SEK 600 million (approximately $71 million ) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs. The profit and loss attributed to the investment is shown in the line item Loss from equity method investment in the Unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the three and nine months ended September 30, 2018 was $15 million and $45 million , respectively. Veoneer’s share of Zenuity’s loss for the three and nine months ended September 30, 2017 was $10 million and $18 million , respectively. As of September 30, 2018, the Company’s equity investment in Zenuity amounted to $120 million after consideration of foreign exchange movements. Certain Unaudited Summarized Income Statement information of Zenuity, for the three and nine months ended September 30, 2018 and 2017, is shown below: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Net sales $ 1 $ 2 $ 4 $ 4 Gross profit — — — — Operating loss (31 ) (20 ) (90 ) (35 ) Loss before income taxes (30 ) (20 ) (90 ) (35 ) Net loss $ (30 ) $ (20 ) $ (90 ) $ (35 ) |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As of September 30, 2018 December 31, 2017 Operating related accruals $ 58 $ 55 Employee related accruals 71 57 Customer pricing accruals 64 36 Product related liabilities 1 24 22 Other accruals 20 25 Total Accrued Expenses $ 237 $ 195 1 At September 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Defined Benefit Pension Plans The defined benefit pension plans impacting the Veoneer financial results include the following: Existing Veoneer Plans which are comprised of plans in Japan, Canada, and France, Transferred Veoneer Plans which are comprised of plans in Germany, India, Japan, and South Korea, and Autoliv Sponsored Plans which are comprised of plans in Sweden and the U.S. The combination of the Existing Veoneer Plans , Transferred Veoneer Plans , and Autoliv Sponsored Plans has resulted in a total pension expense of $1 million and $4 million for the three and nine months ended September 30, 2018, respectively. For the three and nine months ended September 30, 2017 total pension expense was $2 million and $5 million , respectively. Existing Veoneer Plans The defined benefit pension plans for eligible participants in Japan, Canada, and France prior to the Spin-Off continue to provide pension retirement benefits to the Company’s employees subsequent to the Spin-Off. The Company’s net periodic benefit costs for the Existing Veoneer Plans for the three and nine months ended September 30, 2017 and 2018 were as follows: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Service cost $ 2 $ 1 $ 4 $ 3 Interest cost — — 1 1 Expected return on plan assets (1 ) — (2 ) (1 ) Net periodic benefit cost $ 1 $ 1 $ 3 $ 3 The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as Other non-operating items, net in the Unaudited Condensed Consolidated Statements of Operations. Transferred Veoneer Plans Prior to the plan transfers to Veoneer legal entities on April 1, 2018, eligible Veoneer employees participated in the following Autoliv-sponsored plans: Country Name of Defined Benefit Plans Germany Direct Pension Promises Plan India Gratuity Plan Japan Retirement Allowances Plan Defined Benefit Corporate Plan South Korea Severance Pay Plan (statutory plan) On April 1, 2018, the assets, liabilities, and associated accumulated other comprehensive income (loss) of the pension plans in Germany, India, Japan, and South Korea related to active Veoneer employees were transferred to pension plans sponsored by various Veoneer legal entities. Benefit plan obligations of $6 million were recorded by Veoneer related to these plans in connection with the April 1, 2018 transfer. Plan assets in the transferred plans are immaterial. The amounts recorded for the transfer of the Veoneer plans were based on the assumptions incorporated into the plan measurements as of December 31, 2017; however, management determined that there were no material changes in assumptions from December 31, 2017 to April 1, 2018. The plans will be re-measured in connection with the December 31, 2018 actuarial valuation. Changes in Benefit Obligations and Plans Assets As of September 30, 2018 Benefit obligation as of April 1, 2018 $ — Service cost — Interest cost — Benefits paid — Obligation transferred in 6 Benefit obligation at end of the period $ 6 Fair value of plan assets as of April 1, 2018 — Company contributions — Benefits paid — Plan assets transferred in — Fair value of plan assets at end of the period $ — Funded status recognized in the balance sheet $ (6 ) Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan The allocated net periodic benefit costs related to transferred plans from Autoliv to Veoneer were less than $1 million for the three months ended March 31, 2018. The Company’s allocated net periodic benefit costs for these defined benefit plans were less than $1 million for the three and nine months ended September 30, 2017. Subsequent to the plan transfer on April 1, 2018, the components of net periodic benefit cost are less than $1 million for the three months ended September 30, 2018. Components of Accumulated other Comprehensive Income Before Tax As of September 30, 2018 Net actuarial loss (gain) $ (1 ) Prior service cost (credit) — Total accumulated other comprehensive income recognized in the balance sheet $ (1 ) The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as other non-operating items, net in the Unaudited Condensed Consolidated Statements of Operations. Autoliv Sponsored Plans Prior to certain legal decisions or plan amendments, Veoneer employees in Sweden and in the U.S. participated in the following Autoliv-sponsored multiemployer plans: Country Name of Defined Benefit Plans Sweden ITP plan U.S. Autoliv ASP, Inc. Pension Plan Autoliv ASP, Inc. Excess Pension Plan Autoliv ASP, Inc. Supplemental Pension Plan On April 1, 2018, it was determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the Sweden plan for all Veoneer employees included in the Sweden plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The allocation to capture the Company’s specific defined benefit plans expense and contributions prior to the plans amendment for the three months ended March 31, 2018 were less than $1 million and were less than $1 million for the three and nine months ended September 30, 2017, respectively. On June 29, 2018, it was also determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the U.S. plan for all Veoneer employees included in the U.S. plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The Veoneer employees were considered to be participating in the Autoliv sponsored plan through June 29, 2018 at which date the plan was amended to freeze the accrual of benefits for any Veoneer employees. The U.S. plan resulted in less than $1 million of defined benefit plan expense and contributions made allocated to Veoneer for the three and nine months ended September 30, 2018 and less than $1 million of defined benefit plan expense and contributions made allocated to Veoneer for the three and nine months ended September 30, 2017. Prior to the respective dates above for the Sweden and the U.S. plans, the Veoneer employees were considered to be participating in the Autoliv sponsored plans. Effective April 1, 2018 for the Sweden plan and June 29, 2018 for the U.S. plan the respective parties determined that Veoneer would not have additional expense or liability related to each of the existing plans. Post-Retirement Benefits other than Pension In addition to the existing benefit obligation from the Canadian medical plan as disclosed in the Audited Combined Financial Statements for the year ended December 31, 2017, the Company also assumed less than $1 million in benefit obligations transferred from Autoliv’s U.S. medical plan as of June 29, 2018 in connection with the Spin-Off. The net periodic benefit cost and impact on accumulated other comprehensive income related to the plans were immaterial. |
Stock Incentive Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan | Stock Incentive Plan Prior to the Spin-Off, certain eligible employees of Veoneer participated in the Autoliv, Inc. 1997 Stock Incentive Plan and received Autoliv stock-based awards which include stock options, restricted stock units and performance shares. In connection with the Spin-Off, each outstanding Autoliv stock-based award as of June 29, 2018 was converted to stock awards having underlying shares of both Autoliv and Veoneer common stock. The conversion that occurred on the Distribution Date was based on the following: • Stock Option (SOs) - A number of SOs comprising 50% of the value of the outstanding SOs calculated immediately prior to the Spin-Off continued to be applicable to Autoliv common stock. A number of SOs comprising the remaining 50% of the pre-spin value were replaced with options to acquire shares of Veoneer common stock. • Restricted Stock Units (RSUs) - A number of RSUs comprising 50% of the value of the outstanding RSU calculated immediately prior to the Spin-Off continued to be applicable to Autoliv common stock. A number of RSUs comprising the remaining 50% of the pre-spin value were replaced with RSUs with underlying Veoneer common stock. • Performance Shares (PSs) - Outstanding PSs were converted to time-based RSUs and were treated in the same manner as other outstanding RSUs (as described above) on the Distribution Date. The number of outstanding PSs were converted based on: 1) The level of actual achievement of performance goals for each outstanding PSs for the period between the first day of the performance period and December 31, 2017 (the “Performance Measurement Date”), referred to as “Level of Performance-to-Date”, and; 2) The greater of the Level of Performance-to-Date and estimated target performance level (i.e., 100% ) for the period between the Performance Measurement Date and the last day of the performance period. In each case above, the conversion was intended to generally preserve the intrinsic value of the original award determined as of the Distribution Date. The number of converted RSUs and SOs for Autoliv and Veoneer was based on the average of Autoliv closing stock prices for the last 5 days prior to the Spin-Off and the average of closing stock prices of Autoliv and Veoneer, respectively, for the first 5 days after the Spin-Off. As a result of the Spin-Off and the related conversion, it was determined that the stock based awards were modified in accordance with ASC 718, Compensation – Stock Compensation. As a result, the fair value of the RSUs and SOs immediately before and after the modification was assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards, including consideration of the impact of conversion using the 5 day average. Based on the valuation performed, it was determined that the conversion did not result in any incremental compensation cost for any of the outstanding awards. With certain limited exceptions, including the freezing of the Performance Measurement Date to December 31, 2017 as noted above, the SOs and RSUs after the Spin-Off are subject to the same terms and conditions (including with respect to vesting and expiration) that were applicable to such Autoliv stock-based awards immediately prior to the conversion and as described in the Audited Combined Financial Statements for the year ended December 31, 2017 and corresponding notes included in the Company’s Information Statement included in the current report on Form 8-K filed with the SEC on July 2, 2018. There were no stock-based compensation expense related to SOs for the three and nine months ended September 30, 2018 and 2017. The Company recorded approximately $1 million and $4 million stock-based compensation expense related to RSUs and PSs for the three and nine months ended September 30, 2018, respectively. During the three and nine months ended September 30, 2017, the Company recorded $1 million and $2 million , respectively, of stock-based compensation expense related to RSUs and PSs. The Veoneer, Inc. 2018 Stock Incentive Plan was established and effective on June 29, 2018 to govern the Company’s stock-based awards that will be granted in the future. The Veoneer, Inc. 2018 Stock Incentive Plan authorizes the grant of 3 million shares of Veoneer common stock for future equity awards to Veoneer employees and non-employee directors and authorizes up to 1.7 million additional shares to be used for the conversion of outstanding Autoliv stock awards in connection with the Spin-Off. Approximately 1 million shares were used for the conversion of the outstanding grants. |
Contingent Liabilities
Contingent Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Loss Contingency [Abstract] | |
Contingent Liabilities | Contingent Liabilities Legal Proceedings Various claims, lawsuits and proceedings are pending or threatened against the Company, 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 Veoneer, but the Company cannot provide assurance that Veoneer will not experience material litigation, product liability or other losses in the future. Product Warranty, Recalls, and Intellectual Property Veoneer 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, 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 the Company or expected by the customer. Accordingly, the future costs of warranty claims by the customers may be material. However, the Company believes its established reserves are adequate. Veoneer’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 carries insurance for potential recall and product liability claims at coverage levels based on the Company’s prior claims experience. Veoneer cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in the Company’s businesses, now or in the future, or that such coverage always will be available should the Company, now or in the future, wish to extend, increase or otherwise adjust the Company’s insurance. 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 9 – Accrued Expenses summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets. Product Related Liabilities The Company records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and volume of the products sold. The provisions are recorded on an accrual basis. The table below summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets. Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Reserve at beginning of the period $ 23 $ 20 $ 22 $ 30 Change in reserve 1 5 10 5 Cash payments — (2 ) (8 ) (12 ) Transfers — — — — Translation difference — — — 1 Reserve at end of the period $ 24 $ 23 $ 24 $ 23 For the three and nine months ended September 30, 2018 and 2017, provisions and cash paid primarily relate to recall and warranty related issues. The increase in the reserve balance as of September 30, 2018 compared to the prior year was mainly due to recall related issues offset by the cash payments for warranties and product liabilities. Agreements entered into between Autoliv and Veoneer in connection with the Spin-Off provide for Autoliv to indemnify Veoneer for certain liabilities related to electronics products manufactured before April 1, 2018. As of September 30, 2018 the indemnification asset amounting to $23 million represents substantially all of the product related liabilities included in the Other current assets in the Condensed Consolidated Balance Sheets. On May 18, 2018, the Company was informed by one of its customers that it would undertake a recall to proactively address a higher than usual warranty return ratio on one of the Company’s products. The estimated costs associated with this recall are approximately $6 million and were accrued as of September 30, 2018. A substantial portion of these costs are subject to indemnification by Autoliv. Guarantees Veoneer has certain guarantees in place and as of September 30, 2018 and December 31, 2017, direct guarantees are $15 million and $13 million , respectively, of such obligations. These represent the maximum potential amount of future (undiscounted) payments that Veoneer could be required to make under the guarantees in the event of default by the guaranteed parties. |
Loss per share
Loss per share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Loss per share | Loss per share Basic loss per share is computed by dividing net loss for the period by the weighted average number of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted loss per share by application of the treasury stock method. The calculation of diluted loss per share excludes all anti-dilutive common stock. The following table sets forth the computation of basic and diluted loss per share for the three and nine months ended September 30, 2018 and 2017. (U.S. dollars in millions, except per share amounts) Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Numerator: Basic and diluted: Net loss attributable to common shareholders $ (68 ) $ (33 ) $ (162 ) $ (81 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.15 87.13 87.15 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.15 87.13 87.15 87.13 Basic loss per share (0.78) (0.38) (1.86) (0.93) Diluted loss per share (0.78) (0.38) (1.86) (0.93) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. The shares excluded from the calculation were 815,627 for the three and nine months ended September 30, 2018 and 2017 because they are anti-dilutive. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The operating results of the operating segments are regularly reviewed by the Company’s chief operating decision maker to assess the performance of the individual operating segments and make decisions about resources to be allocated to the operating segments. Three Months Ended September 30 Nine Months Ended September 30 (Loss) Before Income Taxes 2018 2017 2018 2017 Electronics $ (36 ) $ (4 ) $ (66 ) $ (11 ) Brake Systems (9 ) (6 ) (23 ) (11 ) Segment operating (loss)/income (45 ) (10 ) (88 ) (22 ) Corporate and other (13 ) (6 ) (34 ) (17 ) Interest and other non-operating items, net 4 — 4 — Loss from equity method investment (15 ) (10 ) (45 ) (18 ) Loss before income taxes $ (70 ) $ (26 ) $ (163 ) $ (56 ) |
Relationship with Former Parent
Relationship with Former Parent and Related Entities | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Relationship with Former Parent and Related Entities | Relationship with Former Parent and Related Entities Historically, Veoneer has been managed and operated in the normal course of business with other affiliates of Autoliv. Accordingly, certain shared costs have been allocated to Veoneer and reflected as expenses in the stand-alone Unaudited Condensed Consolidated Financial Statements. Management of Autoliv and Veoneer consider the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Autoliv attributable to Veoneer for purposes of the stand-alone Financial Statements; however, the expenses reflected in the Unaudited Condensed Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the Unaudited Condensed Consolidated Financial Statements may not be indicative of expenses that will be incurred in the future by Veoneer. Prior to the Spin-Off, transactions between Autoliv and Veoneer, with the exception of sales and purchase transactions and reimbursements for payments made to third-party service providers by Autoliv on Veoneer’s behalf, are reflected in equity in the Condensed Consolidated Balance Sheets as Net Former Parent investment and in the Unaudited Condensed Consolidated Statements of Cash Flows as a financing activity in Net transfers from Former Parent. Transactions with Autoliv Businesses Veoneer and Autoliv entered into a Transition Services Agreement under which certain services are provided by Autoliv to Veoneer and certain services are provided by Veoneer to Autoliv. As of the three and nine months ended September 30, 2018, Veoneer recognized $2 million and $5 million of expenses, respectively, under the Transition Services Agreement. Throughout the periods covered by the Unaudited Condensed Consolidated Financial Statements, Veoneer sold finished goods to Autoliv. Related party sales to Autoliv businesses amount to $31 million and $73 million for the three and nine months ended September 30, 2018, respectively, and $19 million and $54 million for the three and nine months ended September 30, 2017, respectively. Related Party Balances Amounts due to and due from related parties are summarized in the below table: As of RELATED PARTY September 30, 2018 December 31, 2017 Related party receivable $ 63 $ — Related party notes receivable — 76 Related party payables 3 5 Related party long-term debt 12 62 Related party receivables are mainly driven by reseller agreements put in place in connection with the Spin-Off. The reseller agreements are between Autoliv and Veoneer and facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period after the Spin-Off. Autoliv will collect the customer payments and will remit the payments to Veoneer. As of December 31, 2017, related party notes receivables relate to a long term loan between Veoneer and Autoliv entities, which was subsequently settled prior to the Spin-Off. As of September 30, 2018, the related party payables mainly relate to an agreement between Veoneer-Nissin Brake Systems (VNBS) (a 51% owned subsidiary) and various Autoliv companies. A portion of the related party long-term debt is subject to a long term loan agreement that was settled on June 29, 2018. As of September 30, 2018, all related party debt agreements were settled or terminated, with the exception of a capital lease arrangement at VNBS of $12 million and $11 million as of September 30, 2018 and December 31, 2017, respectively. The capital lease is with Nissin Kogyo, the 49% owner of VNBS. In the third quarter, the Company recorded certain true-up adjustments related to amounts due to and from Autoliv with an offsetting increase to equity of $8 million . In addition, the Company recorded a true-up adjustment to its deferred tax amount of $3 million associated with the tax impacts of the legal organization prior to the Spin-Off, with an offsetting increase to equity. Corporate Costs/Allocations For the periods prior to April 1, 2018, the Unaudited Condensed Combined Financial Statements include corporate costs incurred by Autoliv for services that are provided to or on behalf of Veoneer. These costs consist of allocated cost pools and direct costs. Corporate costs have been directly charged to, or allocated to, Veoneer using methods management believes are consistent and reasonable. The method for allocating corporate function costs to Veoneer is based on various formulas involving allocation factors. The methods for allocating corporate administration costs to Veoneer are based on revenue, headcount, or other relevant metrics. However, the expenses reflected in the Unaudited Condensed Consolidated Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. All corporate charges and allocations have been deemed paid by Veoneer to Autoliv in the period in which the cost was recorded in the Unaudited Condensed Consolidated Statements of Operations. Effective April 1, 2018, Veoneer began performing certain functions using internal resources or third parties, and certain other services continued to be provided by Autoliv and directly charged to Veoneer. In addition, Veoneer personnel perform certain services for Autoliv, which are directly charged to Autoliv. Allocated corporate costs included in Costs of sales, Selling, general and administrative expenses and Research, development and engineering expenses were for shared services and infrastructure provided, which includes costs such as information technology, accounting, legal, real estate and facilities, corporate advertising, risk and insurance services, treasury, shareholder services and other corporate and infrastructure services. Cash Management and Financing Prior to the Spin-Off, Veoneer participated in Autoliv’s centralized cash management and financing programs. Disbursements were made through centralized accounts payable systems operated by Autoliv. Cash receipts were transferred to centralized accounts, also maintained by Autoliv. As cash was disbursed and received by Autoliv, it was accounted for by Veoneer through the Net Former Parent investment. All short-term and long-term debt was financed by Autoliv or by Nissin Kogyo and financing decisions for wholly and majority owned subsidiaries were determined by Autoliv’s corporate treasury operations. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents. Upon the Spin-Off, Veoneer created its own corporate treasury operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The carrying amounts reflected in the Condensed Consolidated Balance Sheets for cash and cash equivalents and short-term investments approximate their fair values based on Level 1 of the fair value hierarchy. |
New Accounting Standards | New Accounting Standards Adoption of New Accounting Standards In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI) , which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”). Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company adopted early ASU 2018-02 as of January 1, 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post-retirement Benefit Cost , which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the Unaudited Condensed Consolidated Statements of Operations separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic post-retirement benefit cost in the Unaudited Condensed Consolidated Statements of Operations. The Company adopted ASU 2017-07 in the first quarter of 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented (see Note 10 Retirement Plans). In October 2016, the FASB issued ASU 2016-16 , Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory , which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Historical GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to equity as of the beginning of the period of adoption. The Company's adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Consolidated Financial Statements. The table below shows the adjustments made due to ASU 2014-09. Balance Sheet (Dollars in millions) Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Assets Inventories, net $ 154 $ (5 ) $ 149 Prepaid expenses and contract assets 34 7 41 Equity Net Former Parent investment 844 1 845 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Income Statement (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes As Reported Balances without adoption of ASC 606 Effect of Changes Net sales $ 526 $ 525 $ 1 $ 1,692 $ 1,691 $ 1 Cost of sales (428 ) (427 ) (1 ) (1,371 ) (1,370 ) (1 ) Operating loss (58 ) (58 ) — (122 ) (122 ) — As of September 30, 2018 Balance Sheet (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Assets Inventories, net $ 166 $ 173 $ (6 ) Prepaid expenses and contract assets 33 25 8 Equity Additional paid-in capital 1,929 1,928 1 Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The ASU removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. The ASU requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on its disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The ASU removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The ASU requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact on its disclosures. In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815) , Targeted improvements to accounting for hedging activities . The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of ASU 2017-12 will not have a material impact on the Unaudited Condensed Consolidated Financial Statements since the Company closed its cash flow hedges in the first quarter of 2018. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on its Condensed Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016-02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period financial statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. In addition, we intend to elect the application of permitted practical expedients under the transition guidance within the new standard, which amongst other things, will allow Veoneer to retain the historical lease classification. During the third quarter, the Company continued its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. Further, the Company is assessing if there are any “embedded leases” in arrangements with its suppliers that may result in right-of-use assets. In addition, the Company has continued its implementation of a new system to assist with lease accounting. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard, including consideration of control and process changes to capture lease data necessary to apply ASU 2016-02. |
Revenue | The contract assets related 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. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. Revenue In accordance with ASC 606, Revenue from Contracts with Customers , revenue is measured based on consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price concessions or annual price adjustments) and estimated at contract inception. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. In addition, from time to time, Veoneer may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless certain criteria are met warranting capitalization. If the payments are capitalized, the amounts are amortized as the related goods are transferred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The Company recognizes revenue for production parts primarily at a point in time. For production parts with revenue recognized at a point in time, the Company recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically F.O.B. shipping point). There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and a related asset and associated cost of goods sold and inventory. However, the financial impact of these contracts is immaterial considering the very short production cycles and limited inventory days on hand, which is typical for the automotive industry. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The amount of fulfillment costs was not material for any period presented. |
Fair Value Measurements | Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of 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. The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of adjustments made due to ASU 2014-09 | The table below shows the adjustments made due to ASU 2014-09. Balance Sheet (Dollars in millions) Balance at December 31, 2017 Adjustments due to ASU 2014-09 Balance at January 1, 2018 Assets Inventories, net $ 154 $ (5 ) $ 149 Prepaid expenses and contract assets 34 7 41 Equity Net Former Parent investment 844 1 845 Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Income Statement (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes As Reported Balances without adoption of ASC 606 Effect of Changes Net sales $ 526 $ 525 $ 1 $ 1,692 $ 1,691 $ 1 Cost of sales (428 ) (427 ) (1 ) (1,371 ) (1,370 ) (1 ) Operating loss (58 ) (58 ) — (122 ) (122 ) — As of September 30, 2018 Balance Sheet (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Assets Inventories, net $ 166 $ 173 $ (6 ) Prepaid expenses and contract assets 33 25 8 Equity Additional paid-in capital 1,929 1,928 1 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue disaggregated by primary region and products of revenue recognition | In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region (Dollars in millions) Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 98 $ 85 $ 183 $ 114 $ 89 $ 203 Americas 166 15 181 166 29 195 Europe 163 — 163 170 — 170 Total region sales 426 100 526 449 118 567 Less: intercompany sales — — — — — — Total $ 426 $ 100 $ 526 $ 449 $ 118 $ 567 Net Sales by Region (Dollars in millions) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 314 $ 280 $ 594 $ 353 $ 264 $ 617 Americas 517 45 562 525 98 624 Europe 537 — 537 491 — 491 Total region sales 1,367 325 1,692 1,369 363 1,732 Less: intercompany sales — — — — (2 ) (3 ) Total $ 1,367 $ 325 $ 1,692 $ 1,369 $ 361 $ 1,729 Net Sales by Products (Dollars in millions) Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 226 $ — $ 226 $ 251 $ — $ 251 Active Safety products 201 — 201 198 — 198 Brake Systems — 100 100 — 118 118 Total product sales 426 100 526 449 118 567 Less: intercompany sales — — — — — — Total net sales $ 426 $ 100 $ 526 $ 449 $ 118 $ 567 Net Sales by Products (Dollars in millions) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 739 $ — $ 739 $ 788 $ — $ 788 Active Safety products 628 — 628 581 — 581 Brake Systems — 325 325 — 363 363 Total product sales 1,367 325 1,692 1,369 363 1,732 Less: intercompany sales — — — — (2 ) (3 ) Total net sales $ 1,367 $ 325 $ 1,692 $ 1,369 $ 361 $ 1,729 |
Summary of information about receivables and contract assets from contracts with customers | The following tables provide information about receivables and contract assets from contracts with customers. Contract Balances with Customers (Dollars in millions) As of September 30, 2018 December 31, 2017 Receivables, net $ 437 $ 460 Contract assets 1 8 — 1 Included in prepaid expenses and contract assets Receivables, net of allowance (Dollars in millions) As of September 30, 2018 December 31, 2017 Receivables $ 440 $ 462 Allowance at beginning of period (2 ) (4 ) Net decrease/(increase) of allowance (1 ) 2 Allowance at end of period (3 ) (2 ) Receivables, net of allowance $ 437 $ 460 |
Summary of changes in contract assets | Changes in the contract asset balances during the period are as follows: Change in Contract Balances with Customers 1 (Dollars in millions) Three months ended September 30, 2018 Nine months ended September 30, 2018 Contract assets Contract assets Beginning balance $ 7 $ — Increases due to cumulative catch up adjustment 1 8 Increases due to revenue recognized 8 23 Decreases due to transfer to receivables (8 ) (23 ) Ending balance $ 8 $ 8 1 The contract asset is determined at each period end, this table reflects the rollforward of the period end balance. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivative financial instruments designated and non-designated as hedging instruments | Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017, as follows: September 30, 2018 Fair Value Measurements Nominal Value Derivative Asset (Other current/non current assets) Derivative Liability (Other current/non current liabilities) Derivatives not designated as hedging instruments Foreign exchange swaps, less than 6 months $ 108 $ 1 $ — Total derivatives not designated as hedging instruments $ 108 $ 1 $ — December 31, 2017 Fair Value Measurements Nominal Value Derivative Asset (Other current/non current assets) Derivative Liability (Other current/non current liabilities) Derivatives designated as hedging instruments Foreign exchange forward contracts, less than 1 year (cash flow hedge) $ 67 $ — $ 1 Total derivatives designated as hedging instruments $ 67 $ — $ 1 |
Schedule of gains and losses on derivative financial instruments | Gains and losses on derivative financial instruments for the three and nine months ended September 30, 2018 and 2017 are as follows: Three months ended September 30, 2018 September 30, 2017 Foreign exchange forward contracts Foreign exchange swaps Foreign exchange forward contracts Foreign exchange swaps Foreign currency risk - Cost of sales: Recorded into gain (loss) $ — $ (1 ) $ — $ (1 ) Recorded gains (loss) into AOCI net of tax — — (3 ) — Less: reclassified from AOCI into gain (loss) — — 2 — $ — $ (1 ) $ (4 ) $ (1 ) |
Schedule of long-lived assets measured at fair value on non-recurring basis | The tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of September 30, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 (Dollars in millions) Fair value measurements Level 3 Impairment Losses Fair value measurements Level 3 Impairment Losses Goodwill 1 $ 291 $ — $ 292 $ (234 ) Intangible assets, net 2 102 — 122 (12 ) 1 In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to VNBS, resulting in an impairment loss of $234 million , which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of September 30, 2018 and December 31, 2017 was not measured at fair value as impairment indicators did not exist. 2 In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of September 30, 2018 and December 31, 2017 was not measured at fair value as impairment indicators did not exist. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories are stated at the lower of cost (principally on a first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of September 30, 2018 December 31, 2017 Raw materials $ 107 $ 90 Work in progress 11 21 Finished products 71 70 Inventories $ 189 $ 181 Inventory valuation reserve (23 ) (27 ) Total inventories, net of reserve $ 166 $ 154 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Unaudited Income Statement Information | Certain Unaudited Summarized Income Statement information of Zenuity, for the three and nine months ended September 30, 2018 and 2017, is shown below: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Net sales $ 1 $ 2 $ 4 $ 4 Gross profit — — — — Operating loss (31 ) (20 ) (90 ) (35 ) Loss before income taxes (30 ) (20 ) (90 ) (35 ) Net loss $ (30 ) $ (20 ) $ (90 ) $ (35 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | As of September 30, 2018 December 31, 2017 Operating related accruals $ 58 $ 55 Employee related accruals 71 57 Customer pricing accruals 64 36 Product related liabilities 1 24 22 Other accruals 20 25 Total Accrued Expenses $ 237 $ 195 1 At September 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of components of net periodic benefit cost | The Company’s net periodic benefit costs for the Existing Veoneer Plans for the three and nine months ended September 30, 2017 and 2018 were as follows: Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Service cost $ 2 $ 1 $ 4 $ 3 Interest cost — — 1 1 Expected return on plan assets (1 ) — (2 ) (1 ) Net periodic benefit cost $ 1 $ 1 $ 3 $ 3 |
Schedule of changes in benefit obligations and plan assets | Changes in Benefit Obligations and Plans Assets As of September 30, 2018 Benefit obligation as of April 1, 2018 $ — Service cost — Interest cost — Benefits paid — Obligation transferred in 6 Benefit obligation at end of the period $ 6 Fair value of plan assets as of April 1, 2018 — Company contributions — Benefits paid — Plan assets transferred in — Fair value of plan assets at end of the period $ — Funded status recognized in the balance sheet $ (6 ) |
Schedule of components of accumulated other comprehensive income before tax | Components of Accumulated other Comprehensive Income Before Tax As of September 30, 2018 Net actuarial loss (gain) $ (1 ) Prior service cost (credit) — Total accumulated other comprehensive income recognized in the balance sheet $ (1 ) |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Loss Contingency [Abstract] | |
Schedule of change in balance sheet position of product related liabilities | The table below summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets. Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Reserve at beginning of the period $ 23 $ 20 $ 22 $ 30 Change in reserve 1 5 10 5 Cash payments — (2 ) (8 ) (12 ) Transfers — — — — Translation difference — — — 1 Reserve at end of the period $ 24 $ 23 $ 24 $ 23 |
Loss per share (Tables)
Loss per share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted loss per share for the three and nine months ended September 30, 2018 and 2017. (U.S. dollars in millions, except per share amounts) Three Months Ended September 30 Nine Months Ended September 30 2018 2017 2018 2017 Numerator: Basic and diluted: Net loss attributable to common shareholders $ (68 ) $ (33 ) $ (162 ) $ (81 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.15 87.13 87.15 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.15 87.13 87.15 87.13 Basic loss per share (0.78) (0.38) (1.86) (0.93) Diluted loss per share (0.78) (0.38) (1.86) (0.93) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. The shares excluded from the calculation were 815,627 for the three and nine months ended September 30, 2018 and 2017 because they are anti-dilutive. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of (loss)/income before income taxes | Three Months Ended September 30 Nine Months Ended September 30 (Loss) Before Income Taxes 2018 2017 2018 2017 Electronics $ (36 ) $ (4 ) $ (66 ) $ (11 ) Brake Systems (9 ) (6 ) (23 ) (11 ) Segment operating (loss)/income (45 ) (10 ) (88 ) (22 ) Corporate and other (13 ) (6 ) (34 ) (17 ) Interest and other non-operating items, net 4 — 4 — Loss from equity method investment (15 ) (10 ) (45 ) (18 ) Loss before income taxes $ (70 ) $ (26 ) $ (163 ) $ (56 ) |
Relationship with Former Pare_2
Relationship with Former Parent and Related Entities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Summary of amount due to and from related parties | Amounts due to and due from related parties are summarized in the below table: As of RELATED PARTY September 30, 2018 December 31, 2017 Related party receivable $ 63 $ — Related party notes receivable — 76 Related party payables 3 5 Related party long-term debt 12 62 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - product_area | Jun. 29, 2018 | Sep. 30, 2018 |
Restructuring Cost and Reserve [Line Items] | ||
Number of product areas | 2 | |
Spin-Off | Autoliv | ||
Restructuring Cost and Reserve [Line Items] | ||
Distribution percentage of outstanding common stock in spinoff transaction | 100.00% | |
Spin off conversion ratio | 1 | |
Spin-Off | Autoliv | SDR | ||
Restructuring Cost and Reserve [Line Items] | ||
Spin off conversion ratio | 1 | |
Spin-Off | Autoliv | Common Stock | ||
Restructuring Cost and Reserve [Line Items] | ||
Spin off conversion ratio | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 29, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||||
Cash and cash equivalents | $ 919 | $ 1,000 | $ 0 | $ 0 | $ 0 |
Short-term investments | $ 5 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2014-09 Impact on Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Inventories, net | $ 166 | $ 149 | $ 154 |
Prepaid expenses and contract assets | 33 | 41 | 34 |
Equity | |||
Net Former Parent investment | 0 | 845 | 844 |
Additional paid-in capital | 1,929 | 0 | |
Balances without adoption of ASC 606 | |||
Assets | |||
Inventories, net | 173 | 154 | |
Prepaid expenses and contract assets | 25 | 34 | |
Equity | |||
Net Former Parent investment | $ 844 | ||
Additional paid-in capital | 1,928 | ||
Adjustments due to ASU 2014-09 | ASU 2014-09 | |||
Assets | |||
Inventories, net | (6) | (5) | |
Prepaid expenses and contract assets | 8 | 7 | |
Equity | |||
Net Former Parent investment | $ 1 | ||
Additional paid-in capital | $ 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2014-09 Impact on Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | $ 526 | $ 567 | $ 1,692 | $ 1,729 |
Cost of sales | (428) | (458) | (1,371) | (1,387) |
Operating loss | (58) | $ (16) | (122) | $ (39) |
Balances without adoption of ASC 606 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | 525 | 1,691 | ||
Cost of sales | (427) | (1,370) | ||
Operating loss | (58) | (122) | ||
Effect of Changes | ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net sales | 1 | 1 | ||
Cost of sales | (1) | (1) | ||
Operating loss | $ 0 | $ 0 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Capitalized Contract Cost [Line Items] | ||
Capitalized payments | $ 12,000,000 | |
Impairment losses recognized related to contract assets | $ 0 | $ 0 |
Number of operating segments | segment | 2 | |
Production parts average payment terms | 30 days | |
Other Non-current Assets | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized payments | $ 52,000,000 | $ 23,000,000 |
Revenue - Revenue Disaggregated
Revenue - Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 526 | $ 567 | $ 1,692 | $ 1,729 |
Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 526 | 567 | 1,692 | 1,732 |
Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 226 | 251 | 739 | 788 |
Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 201 | 198 | 628 | 581 |
Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 100 | 118 | 325 | 363 |
Less: intercompany sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | (3) |
Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 426 | 449 | 1,367 | 1,369 |
Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 426 | 449 | 1,367 | 1,369 |
Electronics | Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 226 | 251 | 739 | 788 |
Electronics | Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 201 | 198 | 628 | 581 |
Electronics | Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Electronics | Less: intercompany sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 100 | 118 | 325 | 361 |
Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 100 | 118 | 325 | 363 |
Brake Systems | Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 100 | 118 | 325 | 363 |
Brake Systems | Less: intercompany sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | (2) |
Asia | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 183 | 203 | 594 | 617 |
Asia | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 98 | 114 | 314 | 353 |
Asia | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 85 | 89 | 280 | 264 |
Americas | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 181 | 195 | 562 | 624 |
Americas | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 166 | 166 | 517 | 525 |
Americas | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 15 | 29 | 45 | 98 |
Europe | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 163 | 170 | 537 | 491 |
Europe | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 163 | 170 | 537 | 491 |
Europe | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue - Summary of Informatio
Revenue - Summary of Information about Contract Balances with Customers (Detail) - USD ($) $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Receivables, net | $ 437 | $ 460 | |
Contract assets | $ 8 | $ 7 | $ 0 |
Revenue - Summary of Informat_2
Revenue - Summary of Information about Receivables, Net of Allowance (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 440 | $ 462 |
Allowance for Doubtful Accounts Receivable | ||
Allowance at beginning of period | (2) | (4) |
Net decrease/(increase) of allowance | (1) | 2 |
Allowance at end of period | (3) | (2) |
Receivables, net of allowance | $ 437 | $ 460 |
Revenue - Summary of Changes in
Revenue - Summary of Changes in Contract Assets (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Contract assets | ||
Beginning balance | $ 7 | $ 0 |
Increases due to cumulative catch up adjustment | 1 | 8 |
Increases due to revenue recognized | 8 | 23 |
Decreases due to transfer to receivables | (8) | (23) |
Ending balance | $ 8 | $ 8 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Millions | Sep. 30, 2018USD ($) | Nov. 01, 2017USD ($)expert | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||
Goodwill | $ 291 | $ 292 | |
Fotonic i Norden dp AB | |||
Business Acquisition [Line Items] | |||
Business combination, consideration transferred | $ 17 | ||
Consideration transferred in cash | 15 | ||
Deferred purchase consideration | $ 2 | $ 2 | |
Deferred purchase consideration period | 18 months | ||
Number of Lidar and Time of Flight engineering experts acquired | expert | 35 | ||
Net assets acquired | $ 17 | ||
Business combination, intangible assets | 4 | ||
Goodwill | $ 13 | ||
Fotonic i Norden dp AB | IP | |||
Business Acquisition [Line Items] | |||
Intangible assets remaining useful life | 5 years |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($)contract | Dec. 31, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of earn-out liability | $ 14 | $ 14 | ||
Other operating income from earn out liability adjustment | $ 14 | $ 13 | ||
Fair value of contingent consideration | $ 0 | |||
Foreign exchange swaps | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Maturity period of swap contracts | 6 months | |||
Foreign exchange swaps | Maturity Beyond Six Months | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of foreign currency derivatives held | contract | 0 |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivative Financial Instruments Designated and Non-designated as Hedging Instruments (Details) - Fair Value, Measurements, Recurring - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Nominal Value | $ 108,000,000 | |
Derivatives not designated as hedging instruments | Other current/non current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset (Other current/non current assets) | 1,000,000 | |
Derivatives not designated as hedging instruments | Other current/non current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability (Other current/non current liabilities) | 0 | |
Derivatives not designated as hedging instruments | Foreign exchange swaps | Less Than Six Months | ||
Derivatives, Fair Value [Line Items] | ||
Nominal Value | 108,000,000 | |
Derivatives not designated as hedging instruments | Foreign exchange swaps | Less Than Six Months | Other current/non current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset (Other current/non current assets) | 1,000,000 | |
Derivatives not designated as hedging instruments | Foreign exchange swaps | Less Than Six Months | Other current/non current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability (Other current/non current liabilities) | $ 0 | |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Nominal Value | $ 67,000,000 | |
Derivatives designated as hedging instruments | Other current/non current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset (Other current/non current assets) | 0 | |
Derivatives designated as hedging instruments | Other current/non current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability (Other current/non current liabilities) | 1,000,000 | |
Derivatives designated as hedging instruments | Foreign exchange forward contracts | Less Than One Year | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Nominal Value | 67,000,000 | |
Derivatives designated as hedging instruments | Foreign exchange forward contracts | Less Than One Year | Other current/non current assets | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset (Other current/non current assets) | 0 | |
Derivatives designated as hedging instruments | Foreign exchange forward contracts | Less Than One Year | Other current/non current liabilities | Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability (Other current/non current liabilities) | $ 1,000,000 |
Fair Value Measurements - Gains
Fair Value Measurements - Gains and Losses on Derivative Financial Instruments (Details) - Fair Value, Measurements, Recurring - Cost of Sales - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Foreign exchange forward contracts | ||||
Derivatives, Fair Value [Line Items] | ||||
Recorded into gain (loss) | $ 0 | $ 0 | $ 0 | $ 0 |
Recorded gains (loss) into AOCI net of tax | 0 | (3) | 0 | (6) |
Less: Reclassified from AOCI gain (loss) | 0 | 2 | (1) | 5 |
Gains and losses on derivative financial instruments | 0 | (4) | (1) | (10) |
Foreign exchange swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Recorded into gain (loss) | (1) | (1) | 0 | 1 |
Recorded gains (loss) into AOCI net of tax | 0 | 0 | 0 | 0 |
Less: Reclassified from AOCI gain (loss) | 0 | 0 | 0 | 0 |
Gains and losses on derivative financial instruments | $ (1) | $ (1) | $ 0 | $ 1 |
Fair Value Measurements - Long-
Fair Value Measurements - Long-lived Assets Measured at Fair Value on Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill, Impairment losses | $ 0 | $ (234) | ||
Intangible assets, net, Impairment losses | 0 | (12) | ||
Goodwill, Impairment losses | 0 | 234 | ||
Intangible assets, net, Impairment losses | 0 | 12 | ||
Fair Value Measurements Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill, Fair value measurement | $ 292 | 291 | 292 | |
Intangible assets, net, Fair value measurement | 122 | $ 102 | $ 122 | |
M A C O M Technology Solutions Holdings Inc | Customer Contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Intangible assets, net, Impairment losses | $ (12) | |||
Intangible assets, net, Impairment losses | $ 12 | |||
VNBS | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill, Impairment losses | (234) | |||
Goodwill, Impairment losses | $ 234 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 3 | $ 10 | $ 12 | $ 32 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 107 | $ 90 | |
Work in progress | 11 | 21 | |
Finished products | 71 | 70 | |
Inventories | 189 | 181 | |
Inventory valuation reserve | (23) | (27) | |
Total inventories, net of reserve | $ 166 | $ 149 | $ 154 |
Equity Method Investment - Addi
Equity Method Investment - Additional Information (Details) kr in Millions, $ in Millions | Apr. 18, 2017USD ($) | Apr. 18, 2017SEK (kr) | Sep. 30, 2018USD ($)investment | Mar. 31, 2018USD ($) | Mar. 31, 2018SEK (kr) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)investment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Schedule of Equity Method Investments [Line Items] | |||||||||
Number of equity method investments | investment | 1 | 1 | |||||||
Loss from equity method investment | $ 15 | $ 10 | $ 45 | $ 18 | |||||
Equity investments after consideration of foreign exchange movements | 120 | 120 | $ 98 | ||||||
Zenuity | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Cash contribution to joint venture | $ 71 | kr 600 | |||||||
Ownership percentage in joint venture | 50.00% | 50.00% | 50.00% | ||||||
Equity value of joint venture | $ 250 | ||||||||
Share in equity value of joint venture | $ 125 | ||||||||
Loss from equity method investment | 15 | $ 10 | 45 | $ 18 | |||||
Equity investments after consideration of foreign exchange movements | $ 120 | $ 120 | |||||||
Zenuity | Volvo Cars | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage in joint venture | 50.00% | ||||||||
Zenuity | Autoliv | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Cash contribution to joint venture | $ 111 | kr 1,000 |
Equity Method Investment - Summ
Equity Method Investment - Summary of Unaudited Income Statement Information (Details) - Zenuity - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Net sales | $ 1 | $ 2 | $ 4 | $ 4 |
Gross profit | 0 | 0 | 0 | 0 |
Operating loss | (31) | (20) | (90) | (35) |
Loss before income taxes | (30) | (20) | (90) | (35) |
Net loss | $ (30) | $ (20) | $ (90) | $ (35) |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Operating related accruals | $ 58 | $ 55 |
Employee related accruals | 71 | 57 |
Customer pricing accruals | 64 | 36 |
Product related liabilities | 24 | 22 |
Other accruals | 20 | 25 |
Total Accrued Expenses | $ 237 | $ 195 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Apr. 01, 2018 | |
Pension Plans, Defined Benefit | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Pension expense | $ 1 | $ 2 | $ 4 | $ 5 | ||||
Benefit plan obligations | 6 | $ 6 | 6 | $ 0 | ||||
Defined benefit plan assets transferred Plans (less than) | 0 | |||||||
Defined benefit plan expense (less than) | 0 | |||||||
Defined benefit pension plan expense (less than) | $ 0 | |||||||
Pension Plans, Defined Benefit | Transferred Veoneer Plans | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Benefit plan obligations | $ 6 | |||||||
Defined benefit plan net periodic benefit cost (less than) | $ 1 | 1 | 1 | |||||
Defined benefit plan assets transferred Plans (less than) | 1 | |||||||
Pension Plans, Defined Benefit | Autoliv Sponsored Plans | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined benefit plan expense and contributions prior to the plans amendment (less than) | $ 1 | 1 | 1 | |||||
Pension Plans, Defined Benefit | Autoliv Sponsored Plans | U.S. | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined benefit plan expense (less than) | $ 1 | $ 1 | $ 1 | $ 1 | ||||
Postretirement Benefits Other than Pension | Canadian Medical Plan | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined benefit pension plan expense (less than) | $ 1 |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 0 | ||||
Interest cost | $ 0 | ||||
Existing Veoneer Plans | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | $ 2 | $ 1 | $ 4 | $ 3 | |
Interest cost | 0 | 0 | 1 | 1 | |
Expected return on plan assets | (1) | 0 | (2) | (1) | |
Net periodic benefit cost | $ 1 | $ 1 | $ 3 | $ 3 |
Retirement Plans - Schedule o_2
Retirement Plans - Schedule of Changes in Benefit Obligations and Plan Assets (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 6 Months Ended |
Sep. 30, 2018 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |
Benefit obligation as of April 1, 2018 | $ 0 |
Service cost | 0 |
Interest cost | 0 |
Benefits paid | 0 |
Obligation transferred in | 6 |
Benefit obligation at end of the period | 6 |
Defined Benefit Plan, Change in Plan Assets [Roll Forward] | |
Fair value of plan assets as of April 1, 2018 | 0 |
Company contributions | 0 |
Benefits paid | 0 |
Plan assets transferred in | 0 |
Fair value of plan assets at end of the period | 0 |
Funded status recognized in the balance sheet | $ (6) |
Retirement Plans - Schedule o_3
Retirement Plans - Schedule of Components of Accumulated Other Comprehensive Income Before Tax (Details) - Pension Plans, Defined Benefit $ in Millions | Sep. 30, 2018USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Net actuarial loss (gain) | $ (1) |
Prior service cost (credit) | 0 |
Total accumulated other comprehensive income recognized in the balance sheet | $ (1) |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Details) - USD ($) | Jun. 29, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
2018 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized for grant of common stock for future equity awards (in shares) | 3,000,000 | ||||
Number of shares used for conversion of outstanding grants (in shares) | 1,000,000 | ||||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 0 | |
RSUs and PSs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,000,000 | $ 1,000,000 | $ 4,000,000 | $ 2,000,000 | |
Spin-Off | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of stock options prior to Spin-Off transaction to be continued to be applicable to Autoliv common stock | 50.00% | ||||
Percentage of pre-spin value of stock options to be replaced with options to acquire shares of Veoneer common stock | 50.00% | ||||
Percentage of RSUs prior to Spin-Off to be continued to applicable to Autoliv common stock | 50.00% | ||||
Percentage of pre-spin value of RSUs to be replaced with RSUs with underlying Veoneer common stock | 50.00% | ||||
Estimated target performance level | 100.00% | ||||
Period prior to Spin-Off for average of Autoliv closing stock prices used for conversion of RSUs and SOs | 5 days | ||||
Period after Spin-Off for average of closing stock prices of Autoliv and Veoneer used for conversion of RSUs and SOs | 5 days | ||||
Spin-Off | 2018 Stock Incentive Plan | Autoliv | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of additional shares authorized to be used for conversion of outstanding Autoliv stock awards (in shares) | 1,700,000 |
Contingent Liabilities - Schedu
Contingent Liabilities - Schedule of Change in Balance Sheet Position of Product Related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Product Warranty Accrual [Roll Forward] | ||||
Reserve at beginning of the period | $ 23 | $ 20 | $ 22 | $ 30 |
Change in reserve | 1 | 5 | 10 | 5 |
Cash payments | 0 | (2) | (8) | (12) |
Transfers | 0 | 0 | 0 | 0 |
Translation difference | 0 | 0 | 0 | 1 |
Reserve at end of the period | $ 24 | $ 23 | $ 24 | $ 23 |
Contingent Liabilities - Additi
Contingent Liabilities - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Other current assets | $ 25 | $ 0 |
Estimated cost accrued | 6 | |
Guarantee obligations | 15 | $ 13 |
Indemnification Asset | ||
Loss Contingencies [Line Items] | ||
Other current assets | $ 23 |
Loss per share - Computation of
Loss per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic and diluted: | ||||
Net loss attributable to common shareholders | $ (68) | $ (33) | $ (162) | $ (81) |
Denominator: | ||||
Basic: Weighted average number of shares outstanding (in millions) (in shares) | 87,150,000 | 87,130,000 | 87,150,000 | 87,130,000 |
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,150,000 | 87,130,000 | 87,150,000 | 87,130,000 |
Basic loss per share (in dollars per share) | $ (0.78) | $ (0.38) | $ (1.86) | $ (0.93) |
Diluted loss per share (in dollars per share) | $ (0.78) | $ (0.38) | $ (1.86) | $ (0.93) |
Shares excluded from calculation (in shares) | 815,627 | 815,627 | 815,627 | 815,627 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
(Loss) Before Income Taxes | $ (58) | $ (16) | $ (122) | $ (39) |
Interest and other non-operating items, net | 4 | 0 | 4 | 0 |
Loss from equity method investment | (15) | (10) | (45) | (18) |
Loss before income taxes | (70) | (26) | (163) | (56) |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
(Loss) Before Income Taxes | (45) | (10) | (88) | (22) |
Electronics | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
(Loss) Before Income Taxes | (36) | (4) | (66) | (11) |
Brake Systems | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
(Loss) Before Income Taxes | (9) | (6) | (23) | (11) |
Corporate and other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
(Loss) Before Income Taxes | $ (13) | $ (6) | $ (34) | $ (17) |
Relationship with Former Pare_3
Relationship with Former Parent and Related Entities - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 29, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||||||
True up adjustment to related party payable in connection with the Spin-Off | $ 8 | |||||||
Deferred tax | 3 | |||||||
Cash and cash equivalents | $ 919 | $ 919 | $ 0 | $ 919 | $ 0 | $ 1,000 | $ 0 | $ 0 |
Veoneer Nissin Brakes Systems | ||||||||
Related Party Transaction [Line Items] | ||||||||
Majority ownership percentage | 51.00% | 51.00% | 51.00% | |||||
Capital lease arrangements | $ 12 | $ 12 | $ 12 | $ 11 | ||||
Nissin Kogyo | ||||||||
Related Party Transaction [Line Items] | ||||||||
Minority ownership percentage | 49.00% | 49.00% | 49.00% | |||||
Autoliv | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue from related parties | $ 31 | $ 19 | $ 73 | $ 54 | ||||
Autoliv | Transition Services Agreement | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expenses, related party | $ 2 | $ 5 |
Relationship with Former Pare_4
Relationship with Former Parent and Related Entities - Summary of Amount Due to and from Related Parties (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Related party receivable | $ 63 | $ 0 |
Related party notes receivable | 0 | 76 |
Related party payables | 3 | 5 |
Related party long-term debt | $ 12 | $ 62 |