Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issues | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 87,178,772 | ||
Entity Public Float | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net sales | $ 2,228,000,000 | $ 2,322,000,000 | $ 2,218,000,000 |
Cost of sales | (1,798,000,000) | (1,857,000,000) | (1,795,000,000) |
Gross profit | 430,000,000 | 466,000,000 | 423,000,000 |
Selling, general and administrative expenses | (156,000,000) | (110,000,000) | (110,000,000) |
Research, development and engineering expenses, net | (466,000,000) | (375,000,000) | (300,000,000) |
Goodwill, impairment charge | 0 | (234,000,000) | 0 |
Amortization of intangibles | (23,000,000) | (37,000,000) | (35,000,000) |
Other income (expense), net | 18,000,000 | 8,000,000 | (4,000,000) |
Operating loss | (197,000,000) | (283,000,000) | (25,000,000) |
Loss from equity method investment | (63,000,000) | (31,000,000) | 0 |
Interest income | 7,000,000 | 0 | 0 |
Interest expense | (1,000,000) | 0 | 0 |
Other non-operating items, net | 0 | (1,000,000) | 3,000,000 |
Loss before income taxes | (253,000,000) | (314,000,000) | (22,000,000) |
Income tax expense | (42,000,000) | (30,000,000) | (38,000,000) |
Net loss | (294,000,000) | (344,000,000) | (60,000,000) |
Less: Net loss attributable to non-controlling interest | (19,000,000) | (127,000,000) | (7,000,000) |
Net loss attributable to controlling interest | $ (276,000,000) | $ (217,000,000) | $ (53,000,000) |
Net loss per share - basic (in dollars per share) | $ (3.17) | $ (2.49) | $ (0.61) |
Net loss per share - diluted (in dollars per share) | $ (3.17) | $ (2.49) | $ (0.61) |
Weighted average number of shares outstanding, (in millions) (in shares) | 87,160 | 87,130 | 87,130 |
Weighted average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,160 | 87,130 | 87,130 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (294,000,000) | $ (344,000,000) | $ (60,000,000) |
Other comprehensive (loss) income, before tax: | |||
Change in cumulative translation adjustment | (9,000,000) | 30,000,000 | (17,000,000) |
Net change in cash flow hedges | 1,000,000 | (9,000,000) | 8,000,000 |
Pension liability | (4,000,000) | 0 | (4,000,000) |
Other comprehensive (loss) income, before tax | (12,000,000) | 21,000,000 | (13,000,000) |
Income /(expense) for taxes | 1,000,000 | 0 | (1,000,000) |
Other comprehensive (loss) income, net of tax | (10,000,000) | 21,000,000 | (14,000,000) |
Comprehensive loss | (304,000,000) | (323,000,000) | (74,000,000) |
Less: Comprehensive loss attributable to non-controlling interest | (19,000,000) | (127,000,000) | (7,000,000) |
Comprehensive loss attributable to controlling interest | $ (285,000,000) | $ (196,000,000) | $ (67,000,000) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 864 | $ 0 |
Short-term investments | 5 | 0 |
Receivables, net | 376 | 448 |
Inventories, net | 172 | 154 |
Related party receivable | 64 | 13 |
Prepaid expenses and other contract assets | 39 | 34 |
Other current assets | 22 | 0 |
Total current assets | 1,543 | 649 |
Property, plant and equipment, net | 499 | 362 |
Equity method investment | 101 | 98 |
Goodwill | 291 | 292 |
Intangible assets, net | 102 | 122 |
Deferred tax assets | 11 | 30 |
Related party notes receivable | 1 | 76 |
Investments | 8 | 0 |
Other non-current assets | 77 | 34 |
Total assets | 2,632 | 1,663 |
Liabilities and equity | ||
Accounts payable | 369 | 320 |
Related party payables | 16 | 8 |
Accrued expenses | 193 | 195 |
Income tax payable | 9 | 41 |
Other current liabilities | 47 | 26 |
Related party short-term debt | 1 | 0 |
Total current liabilities | 636 | 590 |
Related party long-term debt | 13 | 62 |
Pension liability | 20 | 14 |
Deferred tax liabilities | 13 | 17 |
Other non-current liabilities | 25 | 22 |
Total non-current liabilities | 70 | 115 |
Commitments and contingencies | ||
Equity | ||
Common stock | 87 | 0 |
Additional paid-in capital | 1,938 | 0 |
Accumulated deficit | (181) | 0 |
Net Former Parent investment | 0 | 844 |
Accumulated other comprehensive loss | (19) | (8) |
Total Equity | 1,826 | 836 |
Non-controlling interest | 101 | 122 |
Total Equity and non-controlling interests | 1,927 | 957 |
Total liabilities, Equity and non-controlling interests | $ 2,632 | $ 1,663 |
Consolidated Balance Sheets Con
Consolidated Balance Sheets Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net loss | $ (294,000,000) | $ (344,000,000) | $ (60,000,000) |
Adjustments to reconcile net loss to net cash (used in) / provided by operating activities: | |||
Depreciation and amortization | 111,000,000 | 119,000,000 | 106,000,000 |
Undistributed loss from equity method investments | 63,000,000 | 31,000,000 | 0 |
Stock-based compensation | 5,000,000 | 2,000,000 | 3,000,000 |
Contingent consideration write-down | (14,000,000) | (13,000,000) | 0 |
Deferred income taxes | 15,000,000 | (11,000,000) | (11,000,000) |
Goodwill, impairment charge | 0 | 234,000,000 | 0 |
Other, net | (29,000,000) | (29,000,000) | (12,000,000) |
Change in operating assets and liabilities | |||
Receivables, gross | 58,000,000 | 12,000,000 | (153,000,000) |
Accounts payable | 10,000,000 | (11,000,000) | 68,000,000 |
Related party receivable and payables, net | (46,000,000) | 0 | 5,000,000 |
Income taxes | (40,000,000) | 10,000,000 | 20,000,000 |
Inventories, gross | (22,000,000) | 19,000,000 | (8,000,000) |
Accrued expenses | 4,000,000 | (9,000,000) | 64,000,000 |
Prepaid expenses and contract assets | (6,000,000) | (1,000,000) | (19,000,000) |
Other current assets and liabilities, net | 6,000,000 | (9,000,000) | (11,000,000) |
Net cash used in operating activities | (179,000,000) | (1,000,000) | (7,000,000) |
Investing activities | |||
Net decrease / (increase) in related party notes receivable | 76,000,000 | (2,000,000) | (8,000,000) |
Proceeds from sale of property, plant and equipment | 4,000,000 | 7,000,000 | 2,000,000 |
Capital expenditures | (188,000,000) | (110,000,000) | (103,000,000) |
Equity method investment | (71,000,000) | 0 | 0 |
Short-term investments | (5,000,000) | 0 | 0 |
Acquisition of intangible assets | (1,000,000) | 0 | 0 |
Acquisition of businesses and interest in affiliates, net of cash acquired | 0 | (125,000,000) | (226,000,000) |
Net cash used in investing activities | (185,000,000) | (230,000,000) | (335,000,000) |
Financing activities | |||
Cash provided at separation by Former Parent | 980,000,000 | 0 | 0 |
Net transfers from Former Parent | 294,000,000 | 184,000,000 | 327,000,000 |
Net increase / (decrease) in related party short-term debt | 1,000,000 | (4,000,000) | 4,000,000 |
(Decrease)/ increase in related party long-term debt | (49,000,000) | 51,000,000 | 12,000,000 |
Net cash provided by financing activities | 1,226,000,000 | 232,000,000 | 343,000,000 |
Effect of exchange rate changes on cash and cash equivalents | 2,000,000 | 0 | 0 |
Increase in cash and cash equivalents | 864,000,000 | 0 | 0 |
Cash and cash equivalents at beginning of year | 0 | 0 | 0 |
Cash and cash equivalents at end of year | 864,000,000 | 0 | 0 |
Cash paid for income taxes | |||
Cash paid for income taxes | $ 39,000,000 | $ 30,000,000 | $ 19,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes Equity - USD ($) | Total | Common Stock | Additional Paid In Capital | Net Former Parent Investment | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Balance at beginning of period at Dec. 31, 2015 | $ 591,000,000 | $ 606,000,000 | $ (15,000,000) | $ 0 | |||
Comprehensive Income (Loss): | |||||||
Net loss | (60,000,000) | (53,000,000) | (7,000,000) | ||||
Net change in cash flow hedges | 8,000,000 | 8,000,000 | |||||
Foreign currency translation | (25,000,000) | (17,000,000) | (7,000,000) | ||||
Pension liability | (5,000,000) | (5,000,000) | |||||
Total Comprehensive Income (Loss) | (81,000,000) | (53,000,000) | (14,000,000) | (14,000,000) | |||
Investment in subsidiary by non-controlling interest | 252,000,000 | 252,000,000 | |||||
Net transfers from Former Parent | 327,000,000 | 324,000,000 | 4,000,000 | ||||
Balance at end of period at Dec. 31, 2016 | 1,089,000,000 | 877,000,000 | (29,000,000) | 242,000,000 | |||
Comprehensive Income (Loss): | |||||||
Net loss | (344,000,000) | (217,000,000) | (127,000,000) | ||||
Net change in cash flow hedges | (9,000,000) | (9,000,000) | |||||
Foreign currency translation | 37,000,000 | 30,000,000 | 7,000,000 | ||||
Total Comprehensive Income (Loss) | (316,000,000) | (217,000,000) | 21,000,000 | (120,000,000) | |||
Net transfers from Former Parent | 184,000,000 | 184,000,000 | 0 | ||||
Balance at end of period at Dec. 31, 2017 | 957,000,000 | $ 0 | $ 0 | 844,000,000 | $ 0 | (8,000,000) | 122,000,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Adoption of ASC 606 | 1 | ||||||
Comprehensive Income (Loss): | |||||||
Net loss | (294,000,000) | (95,000,000) | (181,000,000) | (19,000,000) | |||
Net change in cash flow hedges | 1,000,000 | 1,000,000 | |||||
Foreign currency translation | (10,000,000) | (9,000,000) | (1,000,000) | ||||
Pension liability | (2,000,000) | (3,000,000) | 1,000,000 | ||||
Reclassification of Former Parent's net investment and issuance of ordinary shares in connection with separation | 19,000,000 | 87,000,000 | 1,935,000,000 | (2,003,000,000) | |||
Stock based compensation expense | 3,000,000 | 3,000,000 | |||||
Total Comprehensive Income (Loss) | (283,000,000) | 87,000,000 | 1,938,000,000 | (2,098,000,000) | (181,000,000) | (10,000,000) | (19,000,000) |
Net transfers from Former Parent | 1,252,000,000 | 1,253,000,000 | (1,000,000) | ||||
Balance at end of period at Dec. 31, 2018 | $ 1,927,000,000 | $ 87,000,000 | $ 1,938,000,000 | $ 0 | $ (181,000,000) | $ (19,000,000) | $ 101,000,000 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 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 consolidated financial statements as of and for the years ended December 31, 2017 and 2016 and from January 1, 2018 through the Distribution Date were 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. For the period from the Distribution Date through December 31, 2018, the consolidated financial statements reflect Veoneer’s stand-alone operations. 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 Consolidated Financial Statements. Subsequent to the Spin-Off, Veoneer common stock, Additional paid-in capital and future income (losses) are reflected in 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 "Consolidated Financial Statements"). Prior to the Spin-Off, the Consolidated Statements of Operations include all sales and costs directly attributable to Veoneer, including costs for facilities, functions and services used by Veoneer. Certain shared costs have been directly charged to Veoneer based on usage or other allocation methods. The results of operations also include allocations of (i) costs for administrative functions and services performed on behalf of Veoneer by centralized staff groups within Autoliv, (ii) Autoliv’s general corporate expenses and (iii) certain pension and other retirement benefit costs (See Note 14, Retirement Plans for a description of the allocation methodologies employed). As more fully described in Note 6, Income Taxes, current and deferred income taxes and related tax expense have been determined based on the stand-alone results of Veoneer by applying Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) No. 740, Income Taxes, to the Veoneer operations in each country as if it were a separate taxpayer (i.e., following the separate return methodology). Subsequent to the Spin-Off, sales, costs and taxes are reflected for Veoneer’s operations on a stand-alone company basis. Prior to the Spin-Off, Veoneer participated in Autoliv's centralized cash management and financing programs. Accordingly, no cash and cash equivalents of Autoliv was allocated to Veoneer in the consolidated financial statements. Transactions between Autoliv and Veoneer are accounted for through Net Former Parent Investment. Autoliv’s short-term and long-term debt, including any related interest expense as well as its derivative activity, was pushed down to Veoneer’s consolidated financial statements where it is specifically identifiable to Veoneer. See Note 19, Relationship with Former Parent and Related Entities, for a further description of related party transactions between Autoliv and Veoneer. Subsequent to the Spin-Off, Veoneer has its own treasury functions. For periods prior to the Spin-Off, all charges and allocations of cost for facilities, functions and services performed by Autoliv organizations have been deemed paid by Veoneer to Autoliv, in cash, in the period in which the cost was recorded in the Consolidated Statements of Operations. The 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 consolidated financial statements are based on assumptions that Veoneer management 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's future results. Certain amounts in the prior year’s consolidated financial statements and related footnotes thereto have been reclassified to conform to the current year presentation. Certain amounts in the 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 | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have been prepared in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP) and include the consolidated assets, liabilities, sales, and expenses of the Veoneer business as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017, and 2016. All intercompany accounts and transactions within the Company have been eliminated from the consolidated financial statements. See Note 19, Relationship with Parent and Related Entities, for a further description of related party transactions between Autoliv and Veoneer. Consolidation is also required when the Company has both the power to direct the activities of a variable interest entity (VIE) and the obligation to absorb losses or the right to receive benefits from the VIE that could be significant to the VIE. Investments in affiliated companies in which the Company exercises significant influence over the operations and financial policies, but does not control, are reported using the equity method of accounting. Business Combinations Transactions in which the Company obtains control of a business are accounted for according to the acquisition method as described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805 , Business Combinations . The assets acquired and liabilities assumed are recognized and measured at their fair values as of the date control is obtained. Acquisition related costs in connection with a business combination are expensed as incurred. Contingent consideration is recognized and measured at fair value at the acquisition date and until paid is re-measured on a recurring basis. It is classified as a liability based on appropriate GAAP. Equity Method Investments Investments accounted for under the equity method, means that a proportional share of the equity method investment’s net income increases the investment, and a proportional share of losses and payment of dividends decreases it. In the Consolidated Statements of Operations, the proportional share of the net loss is reported as Loss from equity method investments. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. The accounting estimates that require management’s most significant judgments include the estimation of retroactive price adjustments, estimations associated with purchase price allocations regarding business combinations, valuation of stock based payments, assessment of recoverability of goodwill and intangible assets, assessment of the useful lives of intangible assets, estimation of pension benefit expense based on actuarial assumptions, estimation of accruals for warranty and product liabilities, uncertain tax positions, valuation allowances and contingent liabilities. However, actual results could differ from those estimates. Revenue Recognition 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 December 31, 2018, and 2017, the Company capitalized $ 54 million and $23 million , respectively, in Other non-current assets related to payments to customers. The Company assesses these amounts for impairment. There was no impairment in 2018 or 2017. 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. 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. 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. Research, Development and Engineering (R,D&E) The Company performs research activities to identify new products, product development activities for further product evolution, and engineering activities to customize existing products for specific customers. Research and development and most engineering expenses are expensed as incurred. These expenses are reported net of expense reimbursements from contracts to further customize existing products for specific customers. Certain engineering expenses related to long-term supply arrangements are capitalized when defined criteria, such as the existence of a contractual guarantee for reimbursement, are met. Tooling is generally agreed upon as a separate contract or a separate component of an engineering contract, as a pre-production project. Capitalization of tooling costs is made only when the specific criteria for capitalization of customer funded tooling are met or the criteria for capitalization as Property, Plant & Equipment for tools owned by the Company are fulfilled. Depreciation on the Company’s own tooling is recognized in the Consolidated Statements of Operations as Cost of Sales. Stock Based Compensation The compensation costs for all of the Company’s stock-based compensation awards are determined based on the fair value method as defined in ASC 718, Compensation-Stock Compensation. The Company records the compensation expense for its direct and allocated portion of awards under the Veoneer Stock Incentive Plan, including restricted stock units (RSUs), performance shares (PSs) and stock options (SOs), over the respective vesting period. For further details, see Note 15, Stock Incentive Plans. Income Taxes Prior to the spin-off, Veoneer’s operations were included in the tax returns filed by Autoliv of which the Veoneer business was a part. Income tax expense and other income tax related information contained in these consolidated financial statements were presented on a separate return basis as if the Company filed its own tax returns. Income taxes as presented in the consolidated financial statements for periods prior to the spin-off attribute current and deferred income taxes in a manner that is systematic, rational and consistent with the asset and liability method prescribed by the accounting guidance for income taxes. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone company for the periods presented prior to the spin-off. Any income tax liabilities or related net deferred tax assets or liabilities resulting from operations prior to the spin-off have been settled with the Former Parent as of the Distribution Date and are reflected in the Net Former Parent investment. Subsequent to the Spin-Off, current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current year. In certain circumstances, payments or refunds may extend beyond twelve months, in such cases amounts would be classified as non-current taxes payable or refundable. Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to temporary differences and carryforwards that result from events that have been recognized in either the financial statements or the tax returns, but not both. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws in effect for the year the differences are expected to reverse. Deferred tax assets are reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is recognized if, based on the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration of all facts and circumstances. Tax benefits associated with tax positions taken in the Company’s income tax returns are initially recognized and measured in the financial statements when it is more likely than not that those tax positions will be sustained upon examination by the relevant taxing authorities. The Company’s evaluation of its tax benefits is based on the probability of the tax position being upheld if challenged by the taxing authorities (including through negotiation, appeals, settlement and litigation). Whenever a tax position does not meet the initial recognition criteria, the tax benefit is subsequently recognized and measured if there is a substantive change in the facts and circumstances that cause a change in judgment concerning the sustainability of the tax position upon examination by the relevant taxing authorities. In cases where tax benefits meet the initial recognition criterion, the Company continues, in subsequent periods, to assess its ability to sustain those positions. A previously recognized tax benefit is derecognized when it is no longer more likely than not that the tax position would be sustained upon examination. Liabilities for unrecognized tax benefits are classified as non-current unless the payment of the liability is expected to be made within the next 12 months. 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 $864 million of cash and cash equivalents and $5 million of short-term investments as of December 31, 2018. The carrying amounts reflected in the 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. Receivables Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company has guidelines for calculating the allowance for bad debts. In determining the amount of a bad debt allowance, management uses its judgment to consider factors such as the age of the receivables, the Company’s prior experience with the customer, the experience of other enterprises in the same industry, the customer’s ability to pay, and/or an appraisal of current economic conditions. Collateral is typically not required. There can be no assurance that the amount ultimately realized for receivables will not be materially different than that assumed in the calculation of the allowance. A substantial majority of the Company’s trade receivables are derived from sales to OEMs. The Company’s four largest customers accounted for 58% of sales for 2018, 62% for 2017 and 59% for 2016. Additionally, as of December 31, 2018 and 2017, these four largest customers accounted for 52% and 55% , respectively, of the Company’s accounts receivable. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers. Derivative Instruments and Hedging Activities The Company uses derivative financial instruments, primarily forwards, options and swaps to reduce the effects of fluctuations in foreign exchange rates and the resulting variability of the Company’s operating results. On the date that a derivative contract is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge) or (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge). When a hedge is classified as a fair value hedge, the change in the fair value of the hedge is recognized in the Consolidated Statements of Operations along with the offsetting change in the fair value of the hedged item. When a hedge is classified as a cash flow hedge, any change in the fair value of the hedge is initially recorded in equity as a component of Other Comprehensive Income (OCI) and reclassified into the Consolidated Statements of Operations when the hedge transaction affects net earnings. The Company uses the forward rate with respect to the measurement of changes in fair value of cash flow hedges when revaluing foreign exchange forward contracts. All derivatives are recognized in the consolidated financial statements at fair value. For further details. see Note 5, Fair Value Measurements. Inventories The cost of inventories is computed according to the first-in, first-out method (FIFO). Cost includes the cost of materials, direct labor and the applicable share of manufacturing overhead. Inventories are evaluated based on individual or, in some cases, groups of inventory items. Reserves are established to reduce the value of inventories to the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. There can be no assurance that the amount ultimately realized for inventories will not be materially different than that assumed in the calculation of the reserves. Property, Plant and Equipment Property, Plant and Equipment are recorded at historical cost. Construction in progress generally involves short-term projects for which capitalized interest is not significant. The Company provides for depreciation of property, plant and equipment computed under the straight-line method over the assets’ estimated useful lives, or in the case of leasehold improvements over the shorter of the useful life or the lease term. Amortization on capital leases is recognized with depreciation expense in the Consolidated Statements of Operations over the shorter of the assets’ expected life or the lease contract term. Repairs and maintenance are expensed as incurred. The Company also entered into certain “build-to-suit” lease arrangements in 2017 with continuing impact into 2018 for certain manufacturing and research buildings. During 2018, one of the “build-to-suit” lease arrangement was completed and accounted as a lease as of December 31, 2018. For the build-to-suit still under construction, the Company will be deemed the owner of the buildings for accounting purposes during the construction period due to the terms of the arrangements. As such, those amounts will be capitalized as an asset and a liability in Consolidated Balance Sheet during the construction period. As of December 31, 2018, capitalized amounts are approximately $48 million , and as of December 31, 2017, capitalized amounts were immaterial. Long-Lived Assets Impairment The Company evaluates the carrying value and useful lives of long-lived assets when indications of impairment are evident or it is likely that the useful lives have decreased, in which case the Company depreciates the assets over the remaining useful lives. Impairment testing is primarily performed by using the cash flow method based on undiscounted future cash flows. Estimated undiscounted cash flows for a long-lived asset being evaluated for recoverability are compared with the respective carrying amount of that asset. If the estimated undiscounted cash flows exceed the carrying amount of the assets, the carrying amounts of the long-lived asset are considered recoverable and an impairment is not be recorded. However, if the carrying amount of a group of assets exceeds the undiscounted cash flows, an entity must then measure the long-lived assets’ fair value to determine whether an impairment loss should be recognized, generally using a discounted cash flow model. Intangible Assets and Goodwill Intangible assets, principally related to acquired technology and contractual relationships, are amortized over their useful lives which range from 5 to 10 years. Goodwill represents the excess of the fair value of consideration transferred over the fair value of net assets of businesses acquired. Goodwill is not amortized but is subject to at least an annual review for impairment. The Company reviews goodwill for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate the assets might be impaired. In conducting its impairment testing, the Company compares the estimated fair value of each of its reporting units to the related carrying value of the reporting unit. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value of a reporting unit exceeds its estimated fair value, an impairment loss is recognized for the excess of carrying amount over the fair value of the respective reporting unit. The estimated fair value of the reporting unit is determined by the discounted cash flow method taking into account expected long-term operating cash-flow performance. The Company discounts projected operating cash flows using the reporting unit’s weighted average cost of capital, including a risk premium to adjust for market risk. The estimated fair value is based on automotive industry volume projections which are based on third-party and internally developed forecasts and discount rate assumptions. Significant assumptions include terminal growth rates, terminal operating margin rates, future capital expenditures and working capital requirements. To supplement this analysis, the Company compares the market value of its equity, calculated by reference to the quoted market prices of its shares, to the book value of its equity. In the fourth quarter of 2017, in connection with the annual impairment test, the Company recorded a goodwill impairment charge of $234 million relating to its Brake Systems Segment (see Note 4, Business Combinations). There is no remaining goodwill related to the Brake Systems Segment after the impairment. There were no impairments of goodwill for 2018 and 2016. Warranties and Recalls The Company records liabilities for product recalls when probable claims are identified and when it is possible to reasonably estimate costs. Recall costs are costs incurred when the customer decides to formally recall a product due to a known or suspected safety concern. Product recall costs typically include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the defective part. Insurance receivables, related to recall issues covered by the insurance, are included within other current assets in the Consolidated Balance Sheets. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products and the mix and volume of products sold. The provisions are recorded on an accrual basis. Pension and Other Post-Employment Benefits Veoneer’s employees participate in both defined contribution plans and defined benefit plans sponsored by Veoneer in Japan (the Japan plans), Canada (the Canada plans), and France (the France plans) and certain defined benefit plans sponsored by Autoliv in Sweden (the Sweden plans) and US (the US plans). A defined contribution plan generally specifies the periodic amount that the employer must contribute to the plan and how that amount will be allocated to the eligible employees who perform services during the same period. A defined benefit pension plan is one that contains pension benefit formulas, which generally determine the amount of pension benefits that each employee will receive for services performed during a specified period of employment. For the Japan, Canada, and France plans, the amount recognized as a defined benefit liability is the net total of projected benefit obligation (PBO) minus the fair value of plan assets (if any). The plan assets are measured at fair value. The inputs to the fair value measurement of the plan assets are mainly level 2 inputs (see Note 5, Fair Value Measurements). Veoneer has considered the remaining plans to be part of a multiemployer plan with Autoliv and does not record a corresponding asset or liability. Pension expense was allocated and reported within Costs of sales, Selling, general and administrative expenses and Research, development and engineering expenses in the Consolidated Statements of Operations. The expense related to Veoneer employees and allocated expenses are included in these Consolidated Financial Statements. Contingent Liabilities Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability or other matters. The Company diligently defends itself in such matters and, in addition, carries insurance coverage to the extent reasonably available against insurable risks. The Company records liabilities for claims, lawsuits and proceedings when they are probable, and it is possible to reasonably estimate the cost of such liabilities. Legal costs expected to be incurred in connection with a loss contingency are expensed as such costs are incurred. The Company believes, based on currently available information, that the resolution of outstanding matters, described in Note 16, Commitments and Contingencies, after taking into account recorded liabilities and available insurance coverage, should not have a material effect on the Company’s financial position or results of operations. However, due to the inherent uncertainty associated with such matters, there can be no assurance that the final outcomes of these matters will not be materially different than currently estimated. Translation of Non-US Subsidiaries The balance sheets of subsidiaries with functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. The statement of operations of these subsidiaries is translated into U.S. dollars using the average exchange rates for the year. Translation differences are reflected in equity as a component of OCI. Receivable and Liabilities in Non-Functional Currencies Receivables and liabilities not denominated in functional currencies are converted at year-end exchange rates. Net transaction gains/(losses) that are reflected in the Consolidated Statements of Operations amounted to $(2) million in 2018, $3 million in 2017 and $1 million in 2016. These are recorded in operating income if they relate to operational receivables and liabilities or are recorded in other non-operating items, net if they relate to financial receivables and liabilities. Recently Issued Accounting Pronouncements 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 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 January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) — Simplifying the Test for Goodwill Impairment , which simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Instead, entities should perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the excess of carrying amount over the fair value of the respective reporting unit. The amendments in ASU 2017-04 are effective for public business entities for annual or interim goodwill impairment tests in annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted ASU 2017-04 effective January 1, 2017. As this standard is prospective in nature, the impact to the Company’s financial statements by not performing step two to measure the amount of any potential goodwill impairment will depend on various factors. However, the elimination of step two reduces the complexity and cost of the subsequent measurement of goodwill. This new standard was applied in conjunction with assessing Goodwill impairment as discussed in Note 2, Summary of Significant Accounting Policies. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)—Clarifying the Definition of a Business , which provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The amendments in ASU 2017-01 are effective for public business entities for annual periods beginning after December 15, 2017, and interim periods within those periods. ASU 2017-01 should be applied prospectively. Early adoption is permitted. The Company early adopted ASU 2017-01 effective January 1, 2017 for new transactions that have not been reported in financial statements that have been issued or made available for issuance. As this standard is prospective in nature, the impact to the Company’s financial statements will depend on the nature of the Company’s future acquisitions. This new standard was applied in conjunction with the Zenuity joint venture and the Fotonic i Norden dp AB acquisition as discussed in Note 9, Equity Method Investment and Note 4, Business Combinations, respectively, to the consolidated financial statements for any periods presented. 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 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 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 consolidated financial statements for any periods presented (see Note 14, Retirement Plans). In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-09, Compensation-Stock Compensation (Topic 718) – Scope of Modification Accounting , which provides guidance about which changes to the terms or conditions of a sh |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue The Company has attributed net sales to the geographic area based on the location of the entity selling the final product. Of the net sales, exports from the U.S. to other regions amounted to approximately $356 million , $159 million and $222 million in 2018, 2017 and 2016, respectively. In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region Year Ended December 31 2018 2017 2016 Electronics Brake Systems Total Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 424 $ 370 $ 794 $ 489 $ 362 $ 851 $ 521 $ 276 $ 797 Americas 696 58 754 698 114 812 717 115 832 Europe 680 — 680 663 — 663 598 — 598 Total region sales 1,799 428 2,228 1,850 476 2,326 1,837 391 2,228 Less: intercompany sales — — — (1 ) (3 ) (4 ) (1 ) (8 ) (9 ) Total $ 1,800 $ 428 $ 2,228 $ 1,849 $ 473 $ 2,322 $ 1,835 $ 383 $ 2,218 Net Sales by Products Year Ended December 31 2018 2017 2016 Electronics Brake Systems Total Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 974 $ — $ 974 $ 1,073 $ — $ 1,073 $ 1,097 $ — $ 1,097 Active Safety products 825 — 825 778 — 778 740 — 740 Brake Systems — 428 428 — 476 476 — 391 391 Total product sales 1,799 428 2,228 1,850 476 2,326 1,837 391 2,228 Less: intercompany sales — — — (1 ) (3 ) (4 ) (1 ) (8 ) (9 ) Total net sales $ 1,800 $ 428 $ 2,228 $ 1,849 $ 473 $ 2,322 $ 1,835 $ 383 $ 2,218 The following tables provide information about receivables and contract assets from contracts with customers. Contract Balances with Customers As of December 31 2018 2017 Receivables, net $ 376 $ 448 Contract assets 1 8 — 1 Included in prepaid expenses and other contract assets in the Consolidated Balance Sheets Changes in the contract asset balances during the period are as follows: Change in Contract Balances with Customers 1 December 31, 2018 Contract assets Beginning balance $ — Increases due to cumulative catch up adjustment 8 Increases due to revenue recognized 31 Decreases due to transfer to receivables (31 ) Ending balance $ 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 December 31, 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. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 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 consolidated financial statements prospectively from their date of acquisition. Fotonic i Norden dp AB On November 1, 2017, Veoneer completed the acquisition of all the shares in Fotonic i Norden dp AB (Fotonic), headquartered in Stockholm and Skellefteå in Sweden. The 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 holdback amount as stipulated in the share purchase agreement. The transaction has been accounted for as a business combination, with the purchase price allocation reflecting the final valuation results. 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 fair values of identifiable assets acquired consisted of Intangible assets of $4 million and Goodwill of $13 million , and the fair value of liabilities assumed consisted of Other current liabilities was less than a $1 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 which is tax deductible primary reflects the valuation of the acquired workforce of specialist engineers. Veoneer-Nissin Brake Systems On March 31, 2016, the Company acquired a 51% interest in the entities that formed Veoneer-Nissin Brake Systems (Brake Systems) for approximately $263 million in cash. This entity comprises the Company’s Brake Systems Segment. Brake Systems designs, manufactures and sells products in the brake control and actuation systems business. Nissin Kogyo retained a 49% interest in the entities that formed Brake Systems. The Company has management and operational control of Brake Systems and has consolidated the results of operations and balance sheet from Brake Systems from the date of the acquisition forward. The transaction was accounted for as a business combination. The acquisition combined Nissin Kogyo’s expertise and technology in brake control and actuation systems with the Company’s global reach and customer base to create a global competitive offering in the growing global Brake Systems market. Brake Systems is expected to further strengthen the Company’s role as a system supplier of products and systems for autonomous driving vehicles. From the date of the acquisition through December 31, 2016, the Brake Systems business reported net sales of $391 million and a net loss attributable to controlling interest of $5 million . The net loss attributable to the non-controlling interest was $7 million . The operating loss from the date of the acquisition through December 31, 2016 included $1 million of purchase accounting inventory fair value step-up adjustments in cost of sales upon the sale of acquired inventory. Total Brake Systems acquisition related costs were approximately $2 million for consolidated the year ended December 31, 2016. These costs were reflected in Selling, general and administrative expenses in the Consolidated Statements of Operations. The acquisition date fair value of the consideration transferred for the Company’s 51% interest in the entities that formed Brake Systems was $263 million in a cash transaction. The following table summarizes the finalized fair values of identifiable assets acquired and liabilities assumed: Assets: As of March 31, 2016 Cash and cash equivalents $ 38 Receivables 2 Inventories 33 Other current assets 8 Property, plant and equipment 139 Other non-current assets — Intangibles 112 Goodwill 235 Total assets $ 566 Liabilities: Accounts payable $ 6 Other current liabilities 23 Pension liabilities 9 Other non-current liabilities 13 Total liabilities $ 51 Net assets acquired $ 515 Less: Non-controlling interest $ (252 ) Controlling interest $ 263 Acquired Intangibles primarily consisted of the fair value of customer contracts of $51 million and certain technology of $61 million . The customer contracts will be amortized straight-line over 7 years and the technology will be amortized straight-line over 10 years. The recognized goodwill of $235 million reflects expected synergies from combining the Company's global reach and customer base with Nissin Kogyo’s expertise (including workforce) and technology in brake control and actuation systems. A portion of the goodwill is deductible for tax purposes. Veoneer recognized related party short term debt of $4 million as of December 31, 2016, due to financing at Veoneer Nissin Brake Systems China Zhongshan (a 51% owned subsidiary). This $4 million debt facility was wholly repaid as of December 31, 2017. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 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. Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy, but are included in the total assets for reporting and reconciliation purposes. 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 December 31, 2018 and 2017 were foreign exchange swaps and forward contracts. 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 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, foreign exchange 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 Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Consolidated Balance Sheets . The nominal value of the derivatives not designated as hedging instruments was $103 million and $67 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017 the liability of the derivatives not designated as hedging instruments was less than $1 million and $1 million , respectively. Gains and losses on derivative financial instruments for the periods presented are as follows: Year ended December 31 2018 2017 2016 Foreign exchange forward contracts Foreign exchange forward contracts Foreign exchange forward contracts Foreign currency risk -Cost of sales: Recorded into gain (loss) $ — $ — $ — Recorded gains (loss) into AOCI net of tax — (4 ) 9 Less: reclassified from AOCI into gain (loss) (1 ) 5 1 $ 1 $ (9 ) $ 8 Contingent consideration - The fair value of the contingent consideration relating to the MACOM 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 during 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 Consolidated Statements of Operations during the year ended December 31, 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 during the year ended December 31, 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 December 31, 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. 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 December 31, 2018 and 2017 was not measured at fair value as impairment indicators did not exist. 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 MACOM 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 December 31, 2018 and 2017 was not measured at fair value as impairment indicators did not exist. Investments The Company may, as a practical expedient, estimate the fair value of certain investments using NAV of the investment as of the reporting date. This practical expedient generally deals with investments that permit an investor to redeem its investment directly with, or receive distributions from, the investee at times specified in the investee’s governing documents. Examples of these investments (often referred to as alternative investments) may include ownership interests in real assets, certain credit strategies, and hedging and diversifying strategies. They are commonly in the form of limited partnership interests. The Company uses NAV as a practical expedient when valuing investments in alternative asset classes and funds which are a limited partnership or similar investment vehicle. On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech Fund I, L.P. pursuant to a limited partnership agreement, and as a limited partner, will periodically make capital contributions toward this total commitment amount. As of December 31, 2018, Veoneer contributed a total of $8 million to the fund. The carrying amounts reflected in the Consolidated Balance Sheet in Investments for the AutoTech Fund I, L.P approximates its fair values. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Year Ended December 31 Loss before taxes 2018 2017 2016 U.S. $ (54 ) $ (200 ) $ (78 ) Non-U.S. (199 ) (114 ) 56 Total $ (253 ) $ (314 ) $ (22 ) Year Ended December 31 Provision for income taxes 2018 2017 2016 Current Non-U.S. $ 22 $ 40 $ 41 Deferred U.S. federal (4 ) (1 ) 2 Non-U.S. 24 (9 ) (4 ) Total income tax expense $ 42 $ 30 $ 38 Year Ended December 31 Effective income tax rate 2018 2017 2016 U.S. federal income tax rate $ (53 ) $ (110 ) $ (8 ) Foreign tax rate variances 1 9 (2 ) State taxes, net of federal benefit — (2 ) (1 ) Tax credits (9 ) (10 ) (9 ) Change in Valuation Allowances 79 62 51 Non-Controlling Interest 3 21 1 Earnings of equity investments 13 7 — Withholding taxes 5 4 4 Goodwill impairment — 13 — Change in U.S. tax rate — 35 — Other, net 3 2 1 Provision for income taxes $ 42 $ 30 $ 38 The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Act makes broad and complex changes to the U.S. tax code, including reducing the U.S. federal corporate income tax rate from 35% to 21% , requiring companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and creates new taxes on certain foreign sourced earnings. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 22, 2017. SAB 118 allows for a measurement period in which companies can either use provisional estimates for changes resulting from the Tax Act or apply the tax laws that were in effect immediately prior to the Tax Act being enacted if estimates cannot be determined at the time of the preparation of the financial statements until the actual impacts can be determined. The Company has completed the Company’s accounting for the effects on the Company’s existing deferred tax balances. Due to the full valuation allowance related to the Company’s U.S. operations, the impact to deferred taxes had a net zero impact to the Company except as it relates to a deferred tax liability related to tax deductible goodwill which resulted in a benefit of $4 million recorded for the year ended December 31, 2018 which is reflected as a change in valuation allowances. Pursuant to the Tax Matters Agreement entered into with Autoliv in connection with the Spin-Off, Autoliv is the primarily 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 Tax Act. The Tax Act created a new requirement that certain Global Intangible Low Taxed Income (“GILTI”) earned by foreign subsidiaries must be included currently in the gross income of the U.S. shareholder. Under U.S. GAAP, the Company is permitted to make an accounting policy election to either treat taxes due on future inclusions in U.S. taxable income related to GILTI as a current-period expense when incurred or to factor such amounts into the Company’s measurement of deferred taxes. The Company has determined that it will treat the impact of GILTI as a period cost. The Tax Act also included other provisions effective in 2018, designated as (1) foreign derived intangible income (“FDII”), (2) interest disallowance and (3) base erosion anti-abuse tax (“BEAT”), that were considered in the income tax provision for the year ended December 31, 2018. The tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and liabilities were as follows: As of December 31 Deferred taxes 2018 2017 Assets Provisions $ 39 $ 44 Costs capitalized for tax 1 2 Acquired intangibles 20 12 Tax receivables, principally net operating loss carryforward 74 112 Credits 2 9 Other 3 — Deferred tax assets before allowances $ 139 $ 179 Valuation allowances (125 ) (150 ) Total $ 14 $ 29 Liabilities Property, plant and equipment (9 ) (6 ) Distribution taxes (7 ) (8 ) Other — (2 ) Total $ (16 ) $ (16 ) Net deferred tax asset (liability) $ (2 ) $ 13 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. On December 31, 2018, the Company had net operating loss carryforwards (NOL’s) of approximately $289 million , of which approximately $153 million have no expiration date. The remaining losses expire on various dates through 2027. The Company also has $2 million of U.S. Research and Development Credit carry forwards, which expire in 2038. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. In the fourth quarter of 2018, one of the Company’s Asian subsidiaries entered into a long-term development contract which will result in projected losses in that jurisdiction. While this entity has historically been profitable, the Company has determined that, given the projected losses along with indications that there may be a slowdown in this jurisdiction, it is no longer more likely than not that its deferred tax assets in the jurisdiction will be realizable and therefore has recorded a full valuation allowance against this entity’s deferred tax assets. Valuation allowances have been established for the Company’s US, Sweden, China and Japan operations and the Company’s joint venture in Japan. Such allowances are provided against each entity’s net deferred tax assets, primarily NOL’s, due to a history of cumulative losses or changes to projected future earnings which would support the recognition of the net deferred tax assets. The Company has recorded a deferred tax asset of $11 million and $30 million as of December 31, 2018 and 2017, respectively, and $13 million and $17 million of deferred tax liabilities as of December 31, 2018 and 2017, respectively, in the Consolidated Balance Sheets. The following table summarizes the activity related to the Company’s valuation allowances: As of December 31 Valuation Allowances Against Deferred Tax Assets 2018 2017 Allowances at beginning of year $ 150 $ 90 Benefits reserved current year 83 98 Benefits recognized current year — (4 ) Settlement of tax matters with Former Parent1 (101 ) — Change in Tax rate /impact of U.S. tax reform (4 ) (35 ) Translation difference (3 ) 1 Allowances at end of year $ 125 $ 150 1 Impact is reflected in equity in conjunction with the Spin-Off 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 the legal date of separation, were settled with Former Parent on the last day Veoneer was part of the Autoliv group and were relieved through the Former Parent company investment. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. Since the Company’s operations were generally part of an existing Autoliv legal entity through April 1, 2018 or June 30, 2018 (depending on the jurisdiction), the existing Autoliv legal entity was the primary obligor and is responsible for handling any income tax audit and settling any audits with the taxing authority. To the extent that the Company has accrued a liability for an uncertain tax position related to a period prior to the separation, such liabilities were settled with Former Parent on the last day the Company was part of the Former Parent’s group and were relieved through the Parent company investment. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense. As of December 31, 2018, the Company had recorded $2 million for unrecognized tax benefits. Of the total unrecognized tax benefits as of December 31, 2018, $1 million is classified as a current income tax payable and $1 million is classified as non-current tax payable included in Other Non-Current Liabilities in the Consolidated Balance Sheets. Approximately $2 million of these reserves would impact income tax expense if released into income. The Company expects a change to its unrecognized tax benefits of approximately $1 million in the next twelve months. The following table summarizes the activity related to the Company’s unrecognized tax benefits: As of December 31 Unrecognized Tax Benefits 2018 2017 Unrecognized tax benefits at beginning of year $ 2 $ 1 Increases as a result of tax positions taken during the current period 2 1 Settlement with net former parent (2 ) — Total unrecognized tax benefits at end of year $ 2 $ 2 The Company deferred tax liability for unremitted foreign earnings was $7 million as of December 31, 2018. The $7 million deferred tax liability represented our estimate of the foreign tax cost associated with our preliminary estimate of $146 million of foreign earnings that are not considered to be permanently reinvested. The Company have not provided for foreign withholding or income taxes on the remaining foreign subsidiaries’ undistributed earnings because such earnings have been retained and reinvested by the subsidiaries as of December 31, 2018. Accordingly, no provision has been made for foreign withholding or income taxes, which may become payable if the remaining undistributed earnings of foreign subsidiaries were paid to us as dividends. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Receivables | Receivables As of December 31 2018 2017 Receivables $ 378 $ 450 Allowance at beginning of year $ (2 ) $ (4 ) Reversal of allowance — 2 Allowance at end of year $ (2 ) $ (2 ) Total receivables, net of allowance $ 376 $ 448 The Company receives bank acceptance notes which are registered and endorsed to the Company, and generally matures within six months from certain of its customers in China to settle trade accounts receivable. These guaranteed notes are available for discounting with banking institutions in China or transferring to suppliers to settle liabilities. The Company may hold such bank acceptance notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash. As of December 31, 2018, the Company has $19 million of of bank acceptance notes in China, and $10 million of trade receivables in France which remain outstanding and will mature within the first half of 2019. The collections of such bank acceptance notes and trade receivables are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. The fair value of the guaranteed notes receivables in China is determined based on Level 2 inputs including credit ratings and other criteria observable in the market. The fair value of these notes equal their carrying amounts of $9 million as of December 31, 2018. During the year ended December 31, 2018, the Company entered into arrangements with financial institutions and factored trade receivables of $10 million in France and bank notes of $9 million in China. They were accounted for as secured borrowings with pledged collateral and recorded in the Consolidated Balance Sheets within “Receivable, net” and “Other current liabilities.” |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories As of December 31 2018 2017 Raw material $ 108 $ 90 Work in progress 15 21 Finished products 71 70 Inventories $ 194 $ 181 Inventory reserve at beginning of year $ (27 ) $ (25 ) Reversal of reserve 1 5 Addition to reserve (3 ) (6 ) Write-off against reserve 5 1 Translation difference 1 (2 ) Inventory reserve at end of year $ (23 ) $ (27 ) Total inventories, net of reserve $ 172 $ 154 |
Equity Method Investment
Equity Method Investment | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment As of December 31, 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 Equity method investment in the 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 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 was 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. As of December 31, 2018, Veoneer had 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 Loss from equity method investment in the Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the years ended December 31, 2018 and 2017 was $63 million and $31 million , respectively. As of December 31, 2018 and 2017, the Company’s equity investment in Zenuity amounted to $101 million and $98 million , respectively, after consideration of foreign exchange movements. Certain audited Summarized Income Statement information of Zenuity is shown below: Year Ended December 31 2018 2017 2016 Net sales $ 5 $ 5 $ — Gross profit — — — Operating loss (125 ) (61 ) — Loss before income taxes (125 ) (61 ) — Net loss $ (125 ) $ (61 ) $ — |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment As of December 31 DECEMBER 31 2018 2017 Estimated life Land and land improvements $ 21 $ 20 n/a to 15 Machinery and equipment 662 610 3-8 Buildings 111 76 20 Construction in progress 177 72 n/a Property, plant and equipment $ 971 $ 778 Less accumulated depreciation (472 ) (416 ) Net of accumulated depreciation $ 499 $ 362 Year Ended December 31 DEPRECIATION INCLUDED IN 2018 2017 2016 Cost of sales $ 62 $ 58 $ 51 Selling, general and administrative expenses 3 2 1 Research, development and engineering expenses, net 22 22 19 Total $ 88 $ 82 $ 71 In 2018 the Company recognized an impairment charge of approximately $1 million of fixed assets related to Brake Systems. No significant fixed asset impairments were recognized during the year ended December 31, 2017 or 2016 . The net book value of machinery, equipment, buildings and land under capital lease contracts was $13 million and $11 million as of December 31, 2018 and 2017 , respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets as of December 31, 2018 and 2017, were as follows: Total Electronics Segment Brake Systems Segment Goodwill Carrying amount at January 1, 2017 $ 490 $ 278 $ 212 Acquisition 30 13 17 Goodwill impairment charge (234 ) — (234 ) Translation differences 6 — 5 Carrying amount at December 31, 2017 292 292 — Translation differences (1 ) (1 ) — Carrying amount at December 31, 2018 $ 291 $ 291 $ — Of the $30 million of goodwill recognized as of December 31, 2017, $13 million is related to the Fotonic acquisition in the fourth quarter of 2017 and $17 million is related to the finalization of the purchase price allocation for Brake Systems acquisition in the first quarter of 2017 (see Note 4, Business Combinations). During the year ended December 31, 2017, the Company recognized an impairment charge of the full goodwill amount of $234 million , after consideration of foreign exchange movements, related to Brake Systems. The Company estimated the fair value of Brake Systems using the discounted cash flow method, taking into account expected long-term operating cash-flow performance. 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. For more information regarding the Company’s impairment testing, see section “Goodwill and Intangible Assets” in Note 2, Summary of Significant Accounting Policies. As of December 31 Amortizable Intangible 2018 2017 Gross carrying amount $ 260 $ 249 Acquisition 3 4 Translation differences 1 7 Accumulated amortization (161 ) (138 ) Carrying value $ 102 $ 122 During the year ended December 31, 2017 the Company received information related to a contract with an OEM customer of MACOM products and as a result the Company recognized an impairment charge to amortization of intangibles in the Consolidated Statements of Operations for a customer contract of $12 million . Of the carrying value of $102 million as of December 31, 2018, $71 million was related to the technology asset category and $31 million was related to the contractual relationships' asset category. Of the carrying value of $122 million at December 31, 2017, $80 million was related to the technology asset category and $38 million was related to the contractual relationships' asset category. The Company recorded approximately $23 million , $37 million and $35 million of amortization expense related to definite-lived intangible assets for the years ended December 31, 2018, 2017 and 2016, respectively. The Company currently estimated future amortization expense be $22 million for 2019, $21 million for 2020, $19 million for 2021, $17 million for 2022 and $8 million for 2023. Indefinite-lived intangible assets are not amortized but are tested for impairment at least annually, or earlier when events and circumstances indicate that it is more likely than not that such assets have been impaired. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As of December 31 2018 2017 Operating related accruals $ 55 $ 55 Employee related accruals 66 57 Customer pricing accruals 39 36 Product related liabilities 1 16 22 Other accruals 18 25 Total Accrued Expenses $ 193 $ 195 1 As of December 31, 2018, $14 million of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets, and there were no indemnification assets as of December 31, 2017. |
Other Comprehensive Loss
Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Other Comprehensive Loss | Other Comprehensive Loss Year Ended December 31 2018 2017 2016 Other Comprehensive Loss 1 Cumulative translation adjustments $ (10 ) $ (2 ) $ (31 ) Net gain (loss) of cash flow hedge derivatives — (1 ) 8 Pension liability (9 ) (6 ) (6 ) Total (ending balance) $ (19 ) $ (8 ) $ (29 ) Deferred taxes on the pension liability 1 — — 1 The components of Other Comprehensive Loss are net of any related income tax effects. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 31, 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 and Transferred Veoneer Plans has resulted in a total pension expense of $4 million , $5 million and $4 million for the years ended December 31, 2018, 2017 and 2016, 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. 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 were re-measured in connection with the December 31, 2018 actuarial valuation. Changes in Benefit Obligations and Plan Assets As of December 31 2018 2017 Benefit obligation at beginning of year $ 74 $ 66 Service cost 5 5 Interest cost 2 1 Actuarial (gain) loss (2 ) 1 Benefits paid (2 ) (1 ) Curtailments — (3 ) Settlement (3 ) — Acquisition — 1 Other 4 — Translation difference (2 ) 4 Benefit obligation at end of year $ 76 $ 74 Fair value of plan assets at beginning of year $ 60 $ 51 Actual return on plan assets (2 ) 3 Company contributions 4 6 Benefits paid (2 ) (1 ) Settlements (3 ) (3 ) Acquisition — 1 Other (1 ) — Translation difference (2 ) 3 Fair value of plan assets at year end $ 54 $ 60 Funded status recognized in the balance sheet $ (22 ) $ (14 ) Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan Year Ended December 31 2018 2017 2016 Service cost $ 5 $ 5 $ 4 Interest cost 2 1 1 Expected return on plan assets (2 ) (2 ) (2 ) Net periodic benefit cost $ 4 $ 5 $ 4 The service cost and amortization of prior service cost components are reported among employee compensation costs in the Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported in Other non-operating items, net in the Consolidated Statements of Operations. The estimated prior service cost and net actuarial loss that will be amortized from other comprehensive income into net benefit cost over the next fiscal year is immaterial. The estimated net periodic benefit cost for 2019 is $6 million . Components of Accumulated other Comprehensive Income Before Tax As of December 31 2018 2017 Net actuarial loss (gain) $ 9 $ 6 Prior service cost (credit) — 1 Total accumulated other comprehensive income recognized in the balance sheet $ 10 $ 7 Changes in Accumulated Other Comprehensive Income Before Tax As of December 31 2018 2017 Total retirement benefit recognized in accumulated other comprehensive income at beginning of year $ 7 $ 7 Net actuarial loss (gain) 3 (1 ) Translation difference (1 ) 1 Other 1 — Total retirement benefit recognized in accumulated other comprehensive income at end of year $ 10 $ 7 The accumulated benefit obligation for the Veoneer defined benefit pension plans as of December 31, 2018 and 2017 was $67 million and $33 million , respectively. Pension Plans for Which Accumulated Benefit Obligation (ABO) Exceeds the Fair Value of Plan Assets As of December 31 2018 2017 Projected Benefit Obligation (PBO) $ 76 $ 39 Accumulated Benefit Obligation $ 67 $ 33 Fair value of plan assets $ 54 $ 26 Veoneer, in consultation with its actuarial advisors, determines certain key assumptions to be used in calculating the projected benefit obligation and annual net periodic benefit cost. Assumptions Used to Determine the Benefit Obligation As of December 31 2018 2017 Weighted average Range Discount rate 2.14 % 0.50-3.60 Rate of increases in compensation level 4.39 % 2.00-3.00 Assumptions Used to Determine the Net Periodic Benefit Cost for Years Ended December 31 Year Ended December 31 2018 2017 2016 Weighted average Range Range Discount rate 2.06 % 0.50-3.90 0.50-4.10 Rate of increases in compensation level 4.30 % 2.00-5.00 2.25-5.00 Expected long-term rate of return on assets 3.81 % 0.75-6.00 0.75-6.15 The discount rates for the Veoneer plans have been set based on the rates of return on high-quality fixed-income investments currently available at the measurement date and expected to be available during the period the benefits will be paid. The expected timing of cash flows from the plan have also been considered in selecting the discount rate. In particular, the yields on corporate bonds rated AA or better on the measurement date have been used to set the discount rate. The expected rate of increase in compensation levels and long-term rate of return on plan assets are determined based on a number of factors and must take into account long-term expectations and reflect the financial environment in the respective local market. The expected return on assets for the Veoneer plans are based on the fair value of the assets as of December 31. The investment objectives for the Veoneer plans is to provide an attractive risk-adjusted return that will ensure the payment of benefits while protecting against the risk of substantial investment losses. Correlations among the asset classes are used to identify an asset mix that Veoneer believes will provide the most attractive returns. Long-term return forecasts for each asset class using historical data and other qualitative considerations to adjust for projected economic forecasts are used to set the expected rate of return for the entire portfolio. Veoneer has assumed a long-term rate of return on the plan assets of 0.75% for the Japan plans and 6.00% for the Canada plans for calculating the 2018 and 2019 expense. The Company made contributions of approximately $4 million for the year ended December 31, 2018 and of approximately $6 million for the year ended December 31, 2017. In addition, the Company expects to contribute $3 million to its pension plans in 2019. Fair Value of Total Plan Assets As of December 31 ASSETS CATEGORY IN % WEIGHTED AVERAGE 2018 2017 Equity securities 36.0 % 40.0 % Debt instruments 12.0 % 13.0 % Other assets 52.0 % 47.0 % Total 100.0 % 100.0 % The following table summarizes the fair value of the defined benefit pension plan assets: As of December 31 2018 2017 Assets Equity U.S. Large Cap $ 7 $ 16 Non-U.S. Equity 13 8 Non-U.S. Bonds Corporate 3 — Aggregate 4 7 Insurance Contracts 24 25 Other Investments 4 4 Total $ 54 $ 60 The fair value measurement level within the fair value hierarchy (see Note 5, Fair Value Measurements) is based on the lowest level of any input that is significant to the fair value measurement. Plan assets are classified as Level 1 with exception of the Insurance Contracts which are classified as Level 2 in the table above. The estimated future benefit payments for the pension benefits reflect expected future service, as appropriate. The amount of benefit payments in a given year may vary from the projected amount, especially as certain plans include lump sum benefit payments, and the lump sum amounts may vary with market interest rates. Pension Benefits Expected Payments Amount 2019 $ 2 2020 $ 2 2021 $ 3 2022 $ 3 2023 $ 3 Years 2024-2028 $ 22 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 year ended March 31, 2018 were less than $1 million and $1 million for the year ended December 31, 2017 and 2016, respectively. 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 Consolidated Statements of Operations. These costs were funded through intercompany transactions with Autoliv, which are reflected within the Net Former Parent Investment balance. 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 year ended December 31, 2018 and less than $1 million of defined benefit plan expense and contributions made allocated to Veoneer for the year ended December 31, 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 Veoneer currently provides postretirement health care and life insurance benefits to eligible Canadian employees. The plan is an unfunded plan with a benefit obligation of $4 million as of December 31, 2018 and $3 million as of December 31, 2017 and 2016. The net periodic benefit cost and impact on accumulated other comprehensive income related to the plan are immaterial. In addition to the existing benefit obligation from the Canadian medical plan, 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. Defined contribution plans Veoneer recorded charges for contributions to the defined contribution plans of $2 million for the year ended December 31, 2018 and $1 million for each of the years ended December 31, 2017 and 2016. |
Stock Incentive Plan
Stock Incentive Plan | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan | Stock Incentive Plan The Veoneer, Inc. 2018 Stock Incentive Plan was adopted and effective as of the Distribution Date to govern the Company’s stock-based awards that will be granted in the future as well as awards granted in connection with the conversion of outstanding awards granted under the Autoliv equity compensation program. 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, non-employee directors and other service-providers. In addition, the board authorized 957,388 shares for the conversion of the outstanding Autoliv stock awards in connection with the Spin-Off. Prior to the Spin-Off, certain eligible employees and non-employee directors of Veoneer participated in the Autoliv, Inc. 1997 Stock Incentive Plan and received Autoliv stock-based awards, which included stock options, restricted stock units and performance shares. In connection with the Spin-Off, each outstanding Autoliv stock-based award as of the Distribution Date was converted to a stock award having underlying shares of both Autoliv and Veoneer common stock. The conversion that occurred on the Distribution Date was based on the following: • Stock Options (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 PS 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 trading days prior to the Spin-Off and the average of closing stock prices of Autoliv and Veoneer, respectively, for the first 5 trading 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 trading 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 adjusted SOs and RSUs outstanding 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. There was no stock-based compensation expense related to SOs for the years ended December 31, 2018 and 2017. The RSUs granted by the Former Parent on February 15, 2016 and May 9, 2016 vest in three approximately equal annual installments beginning on the first anniversary of the grant date. The RSUs and PSs granted by the Former Parent on February 19, 2017 and February 15, 2018 will each vest in one installment on the third anniversary of the grant date. The RSUs and PSs granted in 2017 and the RSUs granted in 2018 entitle the grantee to receive dividend equivalents in the form of additional RSUs and PSs subject to the same vesting conditions as the underlying RSUs and PSs, respectively. The fair value of the RSUs and PSs is calculated as the grant date fair value of the shares expected to be issued. For the grants made during 2017 and 2018, the fair value of a PS and a RSU is calculated by using the closing stock price on the grant date. For the grants made during 2016, the fair value of a RSU and a PS was estimated using the Black Scholes valuation model. The grant date fair value for the RSUs at February 13, 2018 was $6 million and the grant date fair value of the RSUs at February 19, 2017 was $3 million . The grant date fair value of the PSs at February 19, 2017 was $3 million . The cost will be amortized straight line over the vesting period. For PSs, the grant date fair value of the number of awards expected to vest is based on the Former Parent’s best estimate of ultimate performance against the respective targets and is recognized as compensation cost on a straight-line basis over would be the requisite vesting period of the awards. The Former Parent assessed the expected achievement levels at the end of each quarter. As of December 31, 2017, the Former Parent believed it was probable that the performance conditions for the two grants will be met, although at a different level, and has recorded the compensation expense accordingly. The cumulative effect of the change in estimate is recognized in the period of change as an adjustment to compensation expense. All SOs were granted for 10 -year terms, had an exercise price equal to the fair market value of the share on the date of grant, and became exercisable after one year of continued employment following the grant date. The average grant date fair values of SOs were calculated using the Black-Scholes valuation model. The Former Parent used historical exercise data for determining the expected life assumption. Expected volatility was based on historical and implied volatility. There were no SOs granted in 2018, 2017 or 2016. The table below includes the assumptions for all awards issued: Year Ended December 31 2018 2017 2016 PSs and RSUs Dividend yield 1 — — 2.2 % 1 Dividend equivalent rights applied to grants starting in 2017. Veoneer recognized total stock (RSUs, PSs and SOs) compensation cost of $5 million , $2 million and $3 million , in the Consolidated Statements of Operations, for the years ended December 31, 2018, 2017 and 2016, respectively. These costs include amounts for individuals specifically identifiable to the Veoneer business as well as an allocation of costs attributable to individuals in corporate functions for the periods prior to the Spin-Off and Veoneer employees subsequent to the Spin-Off. Veoneer has unrecognized compensation cost for Veoneer employees of $6 million related to non-vested awards for RSUs and the weighted average period over which this cost is expected to be recognized is approximately 1.8 years . There is no compensation cost not yet recognized for stock options. A summary of RSUs activity is presented below: Number of RSUs RSUs 1 Outstanding as of June 30, 2018 (Converted from former Parent in connection with the Spin-Off) 601,740 Granted 9,380 Shares issued (7,490 ) Cancelled/Forfeited/Expired (9,636 ) Outstanding as of December 31, 2018 593,994 1 RSUs presented in this table represent Veoneer awards, including those held by Autoliv employees. The weighted average fair value per share at the grant date for RSUs during the years ended December 31, 2018, 2017 and 2016 was $42.88 , $31.98 and $29.81 , respectively. The grant date fair value for RSUs vested in 2018 was $2 million . There were no PSs granted subsequent to the Spin-Off. The weighted average fair value per share at the grant date for PSs during the years ended December 31, 2017 and 2016 was $31.98 and $29.81 , respectively. All outstanding PSs were cancelled and converted to RSUs in connection with the Spin-Off. There are no PSs outstanding as of December 31, 2018. The grant date fair value for RSUs and PSs awarded by the Former Parent were converted with a factor of 3.31. Number of Options SOs 1 Outstanding at June 30, 2018 (Converted from former Parent in connection with the Spin-Off) 355,646 Exercised (30,062 ) Cancelled/Forfeited/Expired — Outstanding as of December 31, 2018 325,584 1 SOs presented in this table represent Veoneer awards, including those held by Autoliv employees. The following summarizes information about stock options outstanding and exercisable as of December 31, 2018: Number Outstanding 1 Remaining Contract life (in years) EXERCISE PRICES $4.93 16,796 0.14 $13.51 21,342 1.13 $20.25 21,266 3.15 $20.91 43,934 4.14 $22.04 15,055 2.15 $28.67 80,627 5.14 $34.25 126,564 6.13 325,584 4.6 1 SOs presented in this table represent Veoneer awards, including those held by Autoliv employees. The total aggregate intrinsic value, which is the difference between the exercise price and $23.57 (closing price per share as of December 31, 2018), for all “in the money” stock options, both outstanding and exercisable as of December 31, 2018, was $1 million . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Veoneer is subject to 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, with the exception of any potential losses resulting from the issue described below, 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. Product Related Liabilities The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues including recall, product liability and warranty issues. 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 Consolidated Balance Sheets. As of December 31 2018 2017 Reserve at beginning of the year $ 22 $ 30 Change in reserve 10 8 Cash settlements (15 ) (16 ) Transfers (1 ) — Translation difference — 1 Reserve at end of the year $ 16 $ 22 As of December 31, 2018 and 2017, provisions and cash paid primarily relate to recall and warranty related issues. The decrease in the reserve balance as of December 31, 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 December 31, 2018, the indemnification asset included in the Other current assets in the Consolidated Balance Sheets amounting to $14 million represents substantially all of the product related liabilities included in the Other current assets in the Consolidated Balance Sheets. A substantial portion of these costs are subject to indemnification by Autoliv. A majority of the Company’s recall related issues are covered by insurance. Insurance receivables are included within prepaid expenses and other contract assets in the Consolidated Balance Sheets. Guarantees The Company provide lease guarantees to Zenuity of $8 million as of December 31, 2018 and 2017. 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. These guarantees will generally cease upon expiration of current lease agreements between 2020 and 2022. Commitments Operating Leases The Company leases certain offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment under operating lease contracts. The operating leases, some of which are non-cancellable and include renewals, expire at various dates through 2034. The Company pays most maintenance, insurance and tax expenses relating to leased assets. Rental expense for operating leases for the year ended December 31, 2018, 2017 and 2016 was $13 million , $7 million and $6 million , respectively. As of December 31, 2018, future minimum lease payments for non-cancellable operating leases totaled $88 million and are payable as follows: 2019: $17 million ; 2020: $14 million ; 2021: $10 million ; 2022: $7 million ; 2023: $5 million ; 2024 and thereafter: $34 million . Build-To-Suit Lease The Company has entered into “build-to-suit” lease arrangements, in addition to the operating leases above, for certain manufacturing and research buildings. The Company is deemed the owner of the buildings for accounting purposes during the construction period due to the terms of the arrangements. As of December 31, 2018, future minimum lease payments for non-cancellable build-to-suit lease obligations totaled $51 million and are payable as follows: 2019: $3 million ; 2020: $3 million ; 2021: $3 million ; 2022: $3 million ; 2023: $3 million ; 2024 and thereafter: $36 million . Capital Leases The Company leases certain property, plant and equipment under capital lease contracts. The capital leases expire at various dates through 2027. As of December 31, 2018, future minimum lease payments for non-cancellable capital leases totaled $15 million and are payable as follows: 2019: $1 million ; 2020: $1 million ; 2021: $12 million ; 2022: $0 million ; 2023: $0 million ; 2024 and thereafter: $1 million . Unconditional Purchase Obligation and Other Non-current liabilities During the year ended December 31, 2017, the Company entered into an unconditional purchase obligation whereof the outstanding balance as of December 31, 2018 is $10 million which will be paid in 2019. This amount will be reimbursed by Zenuity. There are no obligations other than short-term obligations related to inventory, services, tooling, and property, plant and equipment purchased in the ordinary course of business. |
Loss Per Share Loss Per Share
Loss Per Share Loss Per Share | 12 Months Ended |
Dec. 31, 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. (U.S. dollars in millions, except per share amounts) Year Ended December 31 2018 2017 2016 Numerator: Basic and diluted: Net loss attributable to common shareholders $ (276 ) $ (217 ) $ (53 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.16 87.13 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.16 87.13 87.13 Basic loss per share $ (3.17 ) $ (2.49 ) $ (0.61 ) Diluted loss per share 1 $ (3.17 ) $ (2.49 ) $ (0.61 ) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. The shares excluded from the calculation were 446,821 for the year ended December 31, 2018, because they are anti-dilutive and for the years ended December 31, 2017 and 2016, the shares excluded were zero . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Financial results for the Company's reportable segments have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's Chief Operating Decision Maker (CODM) in allocating resources and in assessing performance. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise in passive safety electronics and active safety. The operating results of the operating segments are regularly reviewed by the Company’s CODM, the Chief Executive Officer, to assess the performance of the individual operating segments and make decisions about resources to be allocated to the operating segments. The accounting policies for the reportable segments are the same as those described in the Note 2, Summary of Significant Accounting Policies to the consolidated financial statements. Key financial measures reviewed by the Company’s CODM are as follows. Year Ended December 31 (Loss)/Income Before Income Taxes 2018 2017 2016 Electronics $ (116 ) $ (14 ) $ 11 Brake Systems (30 ) (247 ) (12 ) Segment operating loss (146 ) (261 ) (1 ) Corporate and other (51 ) (22 ) (24 ) Interest and other non-operating items, net 7 (1 ) 3 Loss from equity method investment (63 ) (31 ) — Loss before income taxes $ (253 ) $ (314 ) $ (22 ) Year Ended December 31 Capital Expenditures 2018 2017 2016 Electronics $ 132 $ 79 $ 80 Brake Systems 56 31 23 Total capital expenditures $ 188 $ 110 $ 103 Year Ended December 31 Depreciation and Amortization 2018 2017 2016 Electronics $ 72 $ 80 $ 70 Brake Systems 38 39 36 Total depreciation and amortization $ 111 $ 119 $ 106 As of December 31 Segment Assets 2018 2017 Electronics $ 2,329 $ 1,286 Brake Systems 507 377 Intersegment assets (204 ) — Total assets $ 2,632 $ 1,663 The Company’s customers consist of all major European, U.S. and Asian automobile manufacturers. Sales to individual customers representing 10% or more of net sales were: In 2018: Customer A 21% , Customer B 17% and Customer C 11% . In 2017: Customer A 21% , Customer B 17% , Customer C 12% and Customer D 12% . In 2016: Customer A 17% , Customer B 16% , Customer C 13% , Customer D 13% and Customer E 11% . As of December 31 Long-lived Assets 2018 2017 Asia $ 307 $ 302 Americas 368 393 Europe 438 242 Total $ 1,113 $ 938 Long-lived assets in the U.S. amounted to $315 million and $349 million for 2018 and 2017, respectively. For 2018 and 2017 $117 million and $285 million , respectively, of the long-lived assets in the U.S. refers to intangible assets, principally from acquisition goodwill. |
Relationship with Former Parent
Relationship with Former Parent and Related Entities | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Relationship with Former Parent and Related Entities | Relationship with Former Parent and Related Entities Before the Spin-Off, Veoneer had been managed and operated in the normal course of business with other affiliates of Autoliv. Accordingly, certain shared costs had been allocated to Veoneer and reflected as expenses in the stand-alone consolidated financial statements. Veoneer Management 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 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 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 Consolidated Balance Sheets as Net Former Parent investment and in the Consolidated Statements of Cash Flows as a financing activity in Net transfers from Former Parent. Transactions with Related Parties Veoneer and Autoliv entered into a Transition Services Agreement (TSA) under which certain services are provided by Autoliv to Veoneer and certain services are provided by Veoneer to Autoliv. For the year ended December 31, 2018, Veoneer recognized $7 million of expenses under the TSA, and there were no TSA costs for the years ended December 31, 2017 and 2016. Throughout the periods covered by the consolidated financial statements, Veoneer sold finished goods to Autoliv and Nissin Kogyo, the 49% owner in VNBS (a 51% owned subsidiary). Related party sales during the years ended December 31, 2018, 2017 and 2016 amounted to $121 million , $148 million and $120 million , respectively. Related party purchases during the years ended December 31, 2018, 2017 and 2016 amounted to $22 million , $25 million and $29 million , respectively. Furthermore, engineering services relating to passive safety electronics, have been rendered to Autoliv amounting to $1 million for the year ended December 31, 2018, and engineering services relating to Passive safety electronics, received from Autoliv amounting to $1 million for each of the years ended December 31, 2017 and 2016. Related Party Balances Amounts due to and due from related party components as summarized in the below table: As of December 31 RELATED PARTY 2018 2017 Related party receivable $ 64 $ 13 Related party notes receivable $ 1 $ 76 Related party payables $ 16 $ 8 Related party short term debt $ 1 $ — Related party long-term debt $ 13 $ 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 December 31, 2018, the related party payables mainly relate to an agreement between VNBS and various Autoliv entities. 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 December 31, 2018, all related party debt agreements were settled or terminated, with the exception of a capital lease arrangement at VNBS of $13 million and $11 million as of December 31, 2018 and 2017, respectively. The capital lease is with Nissin Kogyo. In the third quarter of 2018, the Company recorded certain true-up adjustments related to amounts due to and from Autoliv with an offsetting increase to equity of $3 million . In addition, the Company recorded a true-up adjustment during 2018 to its deferred tax amount of $8 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 consolidated 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 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 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 Quarterly Financial Dat
Summary Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary Quarterly Financial Data (Unaudited) | Summary Quarterly Financial Data (Unaudited) The following table presents summary quarterly financial data: 2018 2017 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in Millions, Except Per Share Amounts) Sales $ 594 $ 572 $ 526 $ 535 $ 583 $ 579 $ 567 $ 593 Gross profit 112 112 99 109 113 120 109 124 Operating loss (16 ) (48 ) (58 ) (75 ) (10 ) (12 ) (16 ) (244 ) Loss before income taxes (30 ) (63 ) (70 ) (90 ) (11 ) (19 ) (26 ) (258 ) Net loss (37 ) (66 ) (72 ) (119 ) (22 ) (30 ) (36 ) (256 ) Net loss attributable to controlling interest $ (32 ) $ (63 ) $ (68 ) $ (114 ) $ (20 ) $ (28 ) $ (33 ) $ (136 ) Per Share Data: Basic loss per share $ (0.36 ) $ (0.72 ) $ (0.78 ) $ (1.31 ) $ (0.23 ) $ (0.32 ) $ (0.38 ) $ (1.56 ) Diluted loss per share $ (0.36 ) $ (0.72 ) $ (0.78 ) $ (1.31 ) $ (0.23 ) $ (0.32 ) $ (0.38 ) $ (1.56 ) During 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 MACOM products, which was included in earnings for the period. The Company adjusted the fair value of the earn-out liability to $14 million during 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 Consolidated Statements of Operations during the year ended December 31, 2017 due to the decrease in the contingent consideration liability. During the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill amount of $234 million , after consideration of foreign exchange movements, related to VNBS. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements as of and for the years ended December 31, 2017 and 2016 and from January 1, 2018 through the Distribution Date were 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. For the period from the Distribution Date through December 31, 2018, the consolidated financial statements reflect Veoneer’s stand-alone operations. 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 Consolidated Financial Statements. Subsequent to the Spin-Off, Veoneer common stock, Additional paid-in capital and future income (losses) are reflected in 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 "Consolidated Financial Statements"). |
Principles of Combination | The consolidated financial statements have been prepared in accordance with United States (U.S.) Generally Accepted Accounting Principles (GAAP) and include the consolidated assets, liabilities, sales, and expenses of the Veoneer business as of December 31, 2018 and 2017 and for the years ended December 31, 2018, 2017, and 2016. All intercompany accounts and transactions within the Company have been eliminated from the consolidated financial statements. See Note 19, Relationship with Parent and Related Entities, for a further description of related party transactions between Autoliv and Veoneer. Consolidation is also required when the Company has both the power to direct the activities of a variable interest entity (VIE) and the obligation to absorb losses or the right to receive benefits from the VIE that could be significant to the VIE. Investments in affiliated companies in which the Company exercises significant influence over the operations and financial policies, but does not control, are reported using the equity method of accounting. |
Business Combinations | Transactions in which the Company obtains control of a business are accounted for according to the acquisition method as described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 805 , Business Combinations . The assets acquired and liabilities assumed are recognized and measured at their fair values as of the date control is obtained. Acquisition related costs in connection with a business combination are expensed as incurred. Contingent consideration is recognized and measured at fair value at the acquisition date and until paid is re-measured on a recurring basis. It is classified as a liability based on appropriate GAAP. |
Equity Method Investments | Investments accounted for under the equity method, means that a proportional share of the equity method investment’s net income increases the investment, and a proportional share of losses and payment of dividends decreases it. In the Consolidated Statements of Operations, the proportional share of the net loss is reported as Loss from equity method investments. |
Use of Estimates | The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. The accounting estimates that require management’s most significant judgments include the estimation of retroactive price adjustments, estimations associated with purchase price allocations regarding business combinations, valuation of stock based payments, assessment of recoverability of goodwill and intangible assets, assessment of the useful lives of intangible assets, estimation of pension benefit expense based on actuarial assumptions, estimation of accruals for warranty and product liabilities, uncertain tax positions, valuation allowances and contingent liabilities. However, actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition 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 December 31, 2018, and 2017, the Company capitalized $ 54 million and $23 million , respectively, in Other non-current assets related to payments to customers. The Company assesses these amounts for impairment. There was no impairment in 2018 or 2017. 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. 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. 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. |
Research, Development and Engineering (R,D&E) | The Company performs research activities to identify new products, product development activities for further product evolution, and engineering activities to customize existing products for specific customers. Research and development and most engineering expenses are expensed as incurred. These expenses are reported net of expense reimbursements from contracts to further customize existing products for specific customers. Certain engineering expenses related to long-term supply arrangements are capitalized when defined criteria, such as the existence of a contractual guarantee for reimbursement, are met. Tooling is generally agreed upon as a separate contract or a separate component of an engineering contract, as a pre-production project. Capitalization of tooling costs is made only when the specific criteria for capitalization of customer funded tooling are met or the criteria for capitalization as Property, Plant & Equipment for tools owned by the Company are fulfilled. Depreciation on the Company’s own tooling is recognized in the Consolidated Statements of Operations as Cost of Sales. |
Stock Based Compensation | The compensation costs for all of the Company’s stock-based compensation awards are determined based on the fair value method as defined in ASC 718, Compensation-Stock Compensation. The Company records the compensation expense for its direct and allocated portion of awards under the Veoneer Stock Incentive Plan, including restricted stock units (RSUs), performance shares (PSs) and stock options (SOs), over the respective vesting period. For further details, see Note 15, Stock Incentive Plans. |
Income Taxes | Prior to the spin-off, Veoneer’s operations were included in the tax returns filed by Autoliv of which the Veoneer business was a part. Income tax expense and other income tax related information contained in these consolidated financial statements were presented on a separate return basis as if the Company filed its own tax returns. Income taxes as presented in the consolidated financial statements for periods prior to the spin-off attribute current and deferred income taxes in a manner that is systematic, rational and consistent with the asset and liability method prescribed by the accounting guidance for income taxes. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone company for the periods presented prior to the spin-off. Any income tax liabilities or related net deferred tax assets or liabilities resulting from operations prior to the spin-off have been settled with the Former Parent as of the Distribution Date and are reflected in the Net Former Parent investment. Subsequent to the Spin-Off, current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current year. In certain circumstances, payments or refunds may extend beyond twelve months, in such cases amounts would be classified as non-current taxes payable or refundable. Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to temporary differences and carryforwards that result from events that have been recognized in either the financial statements or the tax returns, but not both. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws in effect for the year the differences are expected to reverse. Deferred tax assets are reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is recognized if, based on the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration of all facts and circumstances. Tax benefits associated with tax positions taken in the Company’s income tax returns are initially recognized and measured in the financial statements when it is more likely than not that those tax positions will be sustained upon examination by the relevant taxing authorities. The Company’s evaluation of its tax benefits is based on the probability of the tax position being upheld if challenged by the taxing authorities (including through negotiation, appeals, settlement and litigation). Whenever a tax position does not meet the initial recognition criteria, the tax benefit is subsequently recognized and measured if there is a substantive change in the facts and circumstances that cause a change in judgment concerning the sustainability of the tax position upon examination by the relevant taxing authorities. In cases where tax benefits meet the initial recognition criterion, the Company continues, in subsequent periods, to assess its ability to sustain those positions. A previously recognized tax benefit is derecognized when it is no longer more likely than not that the tax position would be sustained upon examination. Liabilities for unrecognized tax benefits are classified as non-current unless the payment of the liability is expected to be made within the next 12 months. |
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 $864 million of cash and cash equivalents and $5 million of short-term investments as of December 31, 2018. The carrying amounts reflected in the 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. |
Receivables | Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company has guidelines for calculating the allowance for bad debts. In determining the amount of a bad debt allowance, management uses its judgment to consider factors such as the age of the receivables, the Company’s prior experience with the customer, the experience of other enterprises in the same industry, the customer’s ability to pay, and/or an appraisal of current economic conditions. Collateral is typically not required. There can be no assurance that the amount ultimately realized for receivables will not be materially different than that assumed in the calculation of the allowance. A substantial majority of the Company’s trade receivables are derived from sales to OEMs. |
Concentration and Credit Risk | The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers. |
Derivative Instruments and Hedging Activities | The Company uses derivative financial instruments, primarily forwards, options and swaps to reduce the effects of fluctuations in foreign exchange rates and the resulting variability of the Company’s operating results. On the date that a derivative contract is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge) or (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge). When a hedge is classified as a fair value hedge, the change in the fair value of the hedge is recognized in the Consolidated Statements of Operations along with the offsetting change in the fair value of the hedged item. When a hedge is classified as a cash flow hedge, any change in the fair value of the hedge is initially recorded in equity as a component of Other Comprehensive Income (OCI) and reclassified into the Consolidated Statements of Operations when the hedge transaction affects net earnings. The Company uses the forward rate with respect to the measurement of changes in fair value of cash flow hedges when revaluing foreign exchange forward contracts. All derivatives are recognized in the consolidated financial statements at fair value. |
Inventories | The cost of inventories is computed according to the first-in, first-out method (FIFO). Cost includes the cost of materials, direct labor and the applicable share of manufacturing overhead. Inventories are evaluated based on individual or, in some cases, groups of inventory items. Reserves are established to reduce the value of inventories to the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Excess inventories are quantities of items that exceed anticipated sales or usage for a reasonable period. The Company has guidelines for calculating provisions for excess inventories based on the number of months of inventories on hand compared to anticipated sales or usage. Management uses its judgment to forecast sales or usage and to determine what constitutes a reasonable period. There can be no assurance that the amount ultimately realized for inventories will not be materially different than that assumed in the calculation of the reserves. |
Property, Plant and Equipment | Property, Plant and Equipment are recorded at historical cost. Construction in progress generally involves short-term projects for which capitalized interest is not significant. The Company provides for depreciation of property, plant and equipment computed under the straight-line method over the assets’ estimated useful lives, or in the case of leasehold improvements over the shorter of the useful life or the lease term. Amortization on capital leases is recognized with depreciation expense in the Consolidated Statements of Operations over the shorter of the assets’ expected life or the lease contract term. Repairs and maintenance are expensed as incurred. The Company also entered into certain “build-to-suit” lease arrangements in 2017 with continuing impact into 2018 for certain manufacturing and research buildings. During 2018, one of the “build-to-suit” lease arrangement was completed and accounted as a lease as of December 31, 2018. For the build-to-suit still under construction, the Company will be deemed the owner of the buildings for accounting purposes during the construction period due to the terms of the arrangements. As such, those amounts will be capitalized as an asset and a liability in Consolidated Balance Sheet during the construction period. |
Long-Lived Assets Impairment | The Company evaluates the carrying value and useful lives of long-lived assets when indications of impairment are evident or it is likely that the useful lives have decreased, in which case the Company depreciates the assets over the remaining useful lives. Impairment testing is primarily performed by using the cash flow method based on undiscounted future cash flows. Estimated undiscounted cash flows for a long-lived asset being evaluated for recoverability are compared with the respective carrying amount of that asset. If the estimated undiscounted cash flows exceed the carrying amount of the assets, the carrying amounts of the long-lived asset are considered recoverable and an impairment is not be recorded. However, if the carrying amount of a group of assets exceeds the undiscounted cash flows, an entity must then measure the long-lived assets’ fair value to determine whether an impairment loss should be recognized, generally using a discounted cash flow model. |
Intangible Assets and Goodwill | Intangible assets, principally related to acquired technology and contractual relationships, are amortized over their useful lives which range from 5 to 10 years. Goodwill represents the excess of the fair value of consideration transferred over the fair value of net assets of businesses acquired. Goodwill is not amortized but is subject to at least an annual review for impairment. The Company reviews goodwill for impairment annually in the fourth quarter or more frequently if events or changes in circumstances indicate the assets might be impaired. In conducting its impairment testing, the Company compares the estimated fair value of each of its reporting units to the related carrying value of the reporting unit. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill is considered not to be impaired. If the carrying value of a reporting unit exceeds its estimated fair value, an impairment loss is recognized for the excess of carrying amount over the fair value of the respective reporting unit. The estimated fair value of the reporting unit is determined by the discounted cash flow method taking into account expected long-term operating cash-flow performance. The Company discounts projected operating cash flows using the reporting unit’s weighted average cost of capital, including a risk premium to adjust for market risk. The estimated fair value is based on automotive industry volume projections which are based on third-party and internally developed forecasts and discount rate assumptions. Significant assumptions include terminal growth rates, terminal operating margin rates, future capital expenditures and working capital requirements. To supplement this analysis, the Company compares the market value of its equity, calculated by reference to the quoted market prices of its shares, to the book value of its equity. |
Warranties and Recalls | The Company records liabilities for product recalls when probable claims are identified and when it is possible to reasonably estimate costs. Recall costs are costs incurred when the customer decides to formally recall a product due to a known or suspected safety concern. Product recall costs typically include the cost of the product being replaced as well as the customer’s cost of the recall, including labor to remove and replace the defective part. Insurance receivables, related to recall issues covered by the insurance, are included within other current assets in the Consolidated Balance Sheets. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products and the mix and volume of products sold. The provisions are recorded on an accrual basis. |
Pension and Other Post-Employment Benefits | Veoneer’s employees participate in both defined contribution plans and defined benefit plans sponsored by Veoneer in Japan (the Japan plans), Canada (the Canada plans), and France (the France plans) and certain defined benefit plans sponsored by Autoliv in Sweden (the Sweden plans) and US (the US plans). A defined contribution plan generally specifies the periodic amount that the employer must contribute to the plan and how that amount will be allocated to the eligible employees who perform services during the same period. A defined benefit pension plan is one that contains pension benefit formulas, which generally determine the amount of pension benefits that each employee will receive for services performed during a specified period of employment. For the Japan, Canada, and France plans, the amount recognized as a defined benefit liability is the net total of projected benefit obligation (PBO) minus the fair value of plan assets (if any). The plan assets are measured at fair value. The inputs to the fair value measurement of the plan assets are mainly level 2 inputs (see Note 5, Fair Value Measurements). Veoneer has considered the remaining plans to be part of a multiemployer plan with Autoliv and does not record a corresponding asset or liability. Pension expense was allocated and reported within Costs of sales, Selling, general and administrative expenses and Research, development and engineering expenses in the Consolidated Statements of Operations. The expense related to Veoneer employees and allocated expenses are included in these Consolidated Financial Statements. |
Contingent Liabilities | Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability or other matters. The Company diligently defends itself in such matters and, in addition, carries insurance coverage to the extent reasonably available against insurable risks. The Company records liabilities for claims, lawsuits and proceedings when they are probable, and it is possible to reasonably estimate the cost of such liabilities. Legal costs expected to be incurred in connection with a loss contingency are expensed as such costs are incurred. The Company believes, based on currently available information, that the resolution of outstanding matters, described in Note 16, Commitments and Contingencies, after taking into account recorded liabilities and available insurance coverage, should not have a material effect on the Company’s financial position or results of operations. However, due to the inherent uncertainty associated with such matters, there can be no assurance that the final outcomes of these matters will not be materially different than currently estimated. |
Translation of Non-US Subsidiaries and Receivable and Liabilities in Non-Functional Currencies | These are recorded in operating income if they relate to operational receivables and liabilities or are recorded in other non-operating items, net if they relate to financial receivables and liabilities. The balance sheets of subsidiaries with functional currency other than U.S. dollars are translated into U.S. dollars using year-end exchange rates. The statement of operations of these subsidiaries is translated into U.S. dollars using the average exchange rates for the year. Translation differences are reflected in equity as a component of OCI. |
Recently Issued Accounting Pronouncements | 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 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 January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) — Simplifying the Test for Goodwill Impairment , which simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Instead, entities should perform annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the excess of carrying amount over the fair value of the respective reporting unit. The amendments in ASU 2017-04 are effective for public business entities for annual or interim goodwill impairment tests in annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company early adopted ASU 2017-04 effective January 1, 2017. As this standard is prospective in nature, the impact to the Company’s financial statements by not performing step two to measure the amount of any potential goodwill impairment will depend on various factors. However, the elimination of step two reduces the complexity and cost of the subsequent measurement of goodwill. This new standard was applied in conjunction with assessing Goodwill impairment as discussed in Note 2, Summary of Significant Accounting Policies. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)—Clarifying the Definition of a Business , which provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The amendments in ASU 2017-01 are effective for public business entities for annual periods beginning after December 15, 2017, and interim periods within those periods. ASU 2017-01 should be applied prospectively. Early adoption is permitted. The Company early adopted ASU 2017-01 effective January 1, 2017 for new transactions that have not been reported in financial statements that have been issued or made available for issuance. As this standard is prospective in nature, the impact to the Company’s financial statements will depend on the nature of the Company’s future acquisitions. This new standard was applied in conjunction with the Zenuity joint venture and the Fotonic i Norden dp AB acquisition as discussed in Note 9, Equity Method Investment and Note 4, Business Combinations, respectively, to the consolidated financial statements for any periods presented. 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 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 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 consolidated financial statements for any periods presented (see Note 14, Retirement Plans). In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-09, Compensation-Stock Compensation (Topic 718) – Scope of Modification Accounting , which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The amendments in ASU 2017-09 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not been issued. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The Company early adopted ASU 2017-09 in the second quarter beginning April 1, 2017. As this standard is prospective in nature, the impact to the Company’s financial statements will depend on the nature of the Company’s future award modifications. There have been no modifications to awards to date in 2017. In March 2016, the FASB issued ASU 2016-09, Compensation— Stock Compensation (Topic 718) , which simplifies the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. The Company adopted ASU 2016-09 effective January 1, 2017 and has elected to recognize forfeitures as they occur. The adoption of ASU 2016-09 did not have a material impact on the consolidated financial statements for any periods presented. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payments , which provides guidance on reducing the diversity in practice on eight cash flow classification issues and how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 are effective for public business entities for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the annual period that includes that interim period. The amendments in ASU 2016-15 should be applied using a retrospective transition method to each period presented. The Company early adopted ASU 2016-15 effective January 1, 2017. The adoption of ASU 2016-15 did not have a material impact on the consolidated financial statements for any periods presented. 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 consolidated financial statements for any periods presented. 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 consolidated financial statements for any periods presented. 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 Year Ended December 31, 2018 Income Statement (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Net sales $ 2,228 $ 2,227 $ 1 Cost of sales (1,798 ) (1,797 ) (1 ) Operating loss (197 ) (197 ) — As of December 31, 2018 Balance Sheet (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Assets Inventories, net $ 172 $ 178 $ (6 ) Prepaid expenses and contract assets 39 31 8 Equity Additional paid-in capital $ 1,938 $ 1,937 $ 1 Accounting Standards Issued But Not Yet Adopted In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which provides improvements to ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Specifically, ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20, Measured at Amortized Cost , and states that impairment of receivables arising from operating leases should be accounted for in accordance with ASC Topic 842, Leases . The Company is required to adopt ASU 2018-19 concurrently with ASU 2016-13 in the first quarter of 2020 and is currently evaluating the impact of the ASU 2018-19 of its consolidated financial statements. In November 2018, the FASB issued ASU 2018-18 Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606, which (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under ASC Topic 606, Revenue from Contracts with Customers (Topic 606) , when the collaborative arrangement participant is a customer in the context of a unit of account, (2) adds unit-of-account guidance in Topic 808 to align with Topic 606 when an entity is assessing whether the collaborative arrangement, or a part of the arrangement, is within the scope of Topic 606, (3) precludes presenting transactions together with revenue when those transactions involve collaborative arrangement participants that are not directly related to third parties and are not customers. The Company is required to adopt ASU 2018-18 in the first quarter of 2020 and is currently evaluating the impact of ASU 2018-18 on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-17 Consolidation (Topic 810), Targeted Improvements to Related Party Guidance for Variable Interest Entities, which allows a private company (reporting entity) to elect not to apply variable interest entity (VIE) guidance to legal entities under common control (including common control leasing arrangements) if both the parent and the legal entity being evaluated for consolidation are not public business entities. The accounting alternative provides an accounting policy election that a private company will apply to all current and future legal entities under common control that meet the criteria for applying this alternative. If the alternative is elected, a private company should continue to apply other consolidation guidance, particularly the VIE guidance, unless another scope exception applies. The Company is required to adopt ASU 2018-17 in the first quarter of 2020 and is currently evaluating the impact of ASU 2018-17 on its consolidated financial statements. In October 2018, the FASB issued ASU 2018-16 Derivatives and Hedging (Topic 815), Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which provides amendments to ASU 2017-12, Derivatives and Hedging (Topic 815) , Targeted Improvements to Accounting for Hedging Activities . The amendments in ASU 2018-16 permit use of the Overnight Index Swap (OIS) Rate based on the Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the U.S. Government (UST) Rate, the London Interbank Offered Rate (LIBOR) Swap Rate, the OIS Rate based on the Fed Funds Effective rate, and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. The Company is required to adopt ASU 2018-16 concurrently with ASU 2017-12 in the first quarter of 2019. The Company does not expect ASU 2017-12 to have material impact to the consolidated financial statements. 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 . ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 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. ASU 2018-14 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. ASU 2018-13 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. ASU 2018-13 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 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 earlier 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 the consolidated financial statements for any periods presented. 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 package of practical expedients permitted under the transition guidance within the new standard, which among other things, will allow us to carry forward the historical lease classification. The Company has made an accounting policy election to not recognize lease assets or liabilities for leases with a term of 12 months or less. In addition, the Company has also made an accounting policy election to combine all lease and the related non-lease components as a single component. During the fourth 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. Specifically, the Company is continuing to assess whether there are any “embedded leases” in arrangements with its suppliers and customers. In addition, the Company has identified and is implementing necessary changes to processes and controls to support recognition and disclosure under the new standard. In the first quarter of 2019, the Company will continue its testing of the updated process controls including controls specific to the new third-party software. The Company has substantially completed aggregating and evaluating lease contracts and is in the final stages of implementing a new lease accounting system to support the accounting and disclosure requirements of this standards update. Upon adoption, the Company anticipates recording a right-of-use asset and lease liability on its Consolidated Balance Sheet similar in magnitude to the total present value of outstanding future minimum payments for operating leases and Build-To-Suit lease obligation s as shown in Note 16, Commitments and Contingencies; therefore, the Company expects this standards update will have a material impact on our Consolidated Balance Sheets and related disclosures. The adoption of this standards update is not expected to have a material impact on our Consolidated Statements of Operations or Statements of Cash Flows. |
Fair Value Measurement | 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) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of 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 Year Ended December 31, 2018 Income Statement (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Net sales $ 2,228 $ 2,227 $ 1 Cost of sales (1,798 ) (1,797 ) (1 ) Operating loss (197 ) (197 ) — As of December 31, 2018 Balance Sheet (Dollars in millions) As Reported Balances without adoption of ASC 606 Effect of Changes Assets Inventories, net $ 172 $ 178 $ (6 ) Prepaid expenses and contract assets 39 31 8 Equity Additional paid-in capital $ 1,938 $ 1,937 $ 1 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue disaggregated by primary regiod and products of revenue recognition | In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region Year Ended December 31 2018 2017 2016 Electronics Brake Systems Total Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 424 $ 370 $ 794 $ 489 $ 362 $ 851 $ 521 $ 276 $ 797 Americas 696 58 754 698 114 812 717 115 832 Europe 680 — 680 663 — 663 598 — 598 Total region sales 1,799 428 2,228 1,850 476 2,326 1,837 391 2,228 Less: intercompany sales — — — (1 ) (3 ) (4 ) (1 ) (8 ) (9 ) Total $ 1,800 $ 428 $ 2,228 $ 1,849 $ 473 $ 2,322 $ 1,835 $ 383 $ 2,218 Net Sales by Products Year Ended December 31 2018 2017 2016 Electronics Brake Systems Total Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 974 $ — $ 974 $ 1,073 $ — $ 1,073 $ 1,097 $ — $ 1,097 Active Safety products 825 — 825 778 — 778 740 — 740 Brake Systems — 428 428 — 476 476 — 391 391 Total product sales 1,799 428 2,228 1,850 476 2,326 1,837 391 2,228 Less: intercompany sales — — — (1 ) (3 ) (4 ) (1 ) (8 ) (9 ) Total net sales $ 1,800 $ 428 $ 2,228 $ 1,849 $ 473 $ 2,322 $ 1,835 $ 383 $ 2,218 |
Summary of information about contract assets from contracts with customers | The following tables provide information about receivables and contract assets from contracts with customers. Contract Balances with Customers As of December 31 2018 2017 Receivables, net $ 376 $ 448 Contract assets 1 8 — 1 Included in prepaid expenses and other contract assets in the Consolidated Balance Sheets |
Summary if changes in contract assets | Changes in the contract asset balances during the period are as follows: Change in Contract Balances with Customers 1 December 31, 2018 Contract assets Beginning balance $ — Increases due to cumulative catch up adjustment 8 Increases due to revenue recognized 31 Decreases due to transfer to receivables (31 ) Ending balance $ 8 1 The contract asset is determined at each period end, this table reflects the rollforward of the period end balance. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed | The following table summarizes the finalized fair values of identifiable assets acquired and liabilities assumed: Assets: As of March 31, 2016 Cash and cash equivalents $ 38 Receivables 2 Inventories 33 Other current assets 8 Property, plant and equipment 139 Other non-current assets — Intangibles 112 Goodwill 235 Total assets $ 566 Liabilities: Accounts payable $ 6 Other current liabilities 23 Pension liabilities 9 Other non-current liabilities 13 Total liabilities $ 51 Net assets acquired $ 515 Less: Non-controlling interest $ (252 ) Controlling interest $ 263 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of gains and losses on derivative financial instruments | Gains and losses on derivative financial instruments for the periods presented are as follows: Year ended December 31 2018 2017 2016 Foreign exchange forward contracts Foreign exchange forward contracts Foreign exchange forward contracts Foreign currency risk -Cost of sales: Recorded into gain (loss) $ — $ — $ — Recorded gains (loss) into AOCI net of tax — (4 ) 9 Less: reclassified from AOCI into gain (loss) (1 ) 5 1 $ 1 $ (9 ) $ 8 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before tax | Year Ended December 31 Loss before taxes 2018 2017 2016 U.S. $ (54 ) $ (200 ) $ (78 ) Non-U.S. (199 ) (114 ) 56 Total $ (253 ) $ (314 ) $ (22 ) |
Schedule of components of income tax expense (benefit) | Year Ended December 31 Provision for income taxes 2018 2017 2016 Current Non-U.S. $ 22 $ 40 $ 41 Deferred U.S. federal (4 ) (1 ) 2 Non-U.S. 24 (9 ) (4 ) Total income tax expense $ 42 $ 30 $ 38 |
Schedule of effective income tax rate reconciliation | Year Ended December 31 Effective income tax rate 2018 2017 2016 U.S. federal income tax rate $ (53 ) $ (110 ) $ (8 ) Foreign tax rate variances 1 9 (2 ) State taxes, net of federal benefit — (2 ) (1 ) Tax credits (9 ) (10 ) (9 ) Change in Valuation Allowances 79 62 51 Non-Controlling Interest 3 21 1 Earnings of equity investments 13 7 — Withholding taxes 5 4 4 Goodwill impairment — 13 — Change in U.S. tax rate — 35 — Other, net 3 2 1 Provision for income taxes $ 42 $ 30 $ 38 |
Schedule of deferred tax assets and liabilities | As of December 31 Deferred taxes 2018 2017 Assets Provisions $ 39 $ 44 Costs capitalized for tax 1 2 Acquired intangibles 20 12 Tax receivables, principally net operating loss carryforward 74 112 Credits 2 9 Other 3 — Deferred tax assets before allowances $ 139 $ 179 Valuation allowances (125 ) (150 ) Total $ 14 $ 29 Liabilities Property, plant and equipment (9 ) (6 ) Distribution taxes (7 ) (8 ) Other — (2 ) Total $ (16 ) $ (16 ) Net deferred tax asset (liability) $ (2 ) $ 13 |
Summary of valuation allowance | The following table summarizes the activity related to the Company’s valuation allowances: As of December 31 Valuation Allowances Against Deferred Tax Assets 2018 2017 Allowances at beginning of year $ 150 $ 90 Benefits reserved current year 83 98 Benefits recognized current year — (4 ) Settlement of tax matters with Former Parent1 (101 ) — Change in Tax rate /impact of U.S. tax reform (4 ) (35 ) Translation difference (3 ) 1 Allowances at end of year $ 125 $ 150 1 Impact is reflected in equity in conjunction with the Spin-Off |
Schedule of unrecognized tax benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits: As of December 31 Unrecognized Tax Benefits 2018 2017 Unrecognized tax benefits at beginning of year $ 2 $ 1 Increases as a result of tax positions taken during the current period 2 1 Settlement with net former parent (2 ) — Total unrecognized tax benefits at end of year $ 2 $ 2 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable | As of December 31 2018 2017 Receivables $ 378 $ 450 Allowance at beginning of year $ (2 ) $ (4 ) Reversal of allowance — 2 Allowance at end of year $ (2 ) $ (2 ) Total receivables, net of allowance $ 376 $ 448 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | As of December 31 2018 2017 Raw material $ 108 $ 90 Work in progress 15 21 Finished products 71 70 Inventories $ 194 $ 181 Inventory reserve at beginning of year $ (27 ) $ (25 ) Reversal of reserve 1 5 Addition to reserve (3 ) (6 ) Write-off against reserve 5 1 Translation difference 1 (2 ) Inventory reserve at end of year $ (23 ) $ (27 ) Total inventories, net of reserve $ 172 $ 154 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Unaudited Income Statement Information | Certain audited Summarized Income Statement information of Zenuity is shown below: Year Ended December 31 2018 2017 2016 Net sales $ 5 $ 5 $ — Gross profit — — — Operating loss (125 ) (61 ) — Loss before income taxes (125 ) (61 ) — Net loss $ (125 ) $ (61 ) $ — |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | As of December 31 DECEMBER 31 2018 2017 Estimated life Land and land improvements $ 21 $ 20 n/a to 15 Machinery and equipment 662 610 3-8 Buildings 111 76 20 Construction in progress 177 72 n/a Property, plant and equipment $ 971 $ 778 Less accumulated depreciation (472 ) (416 ) Net of accumulated depreciation $ 499 $ 362 Year Ended December 31 DEPRECIATION INCLUDED IN 2018 2017 2016 Cost of sales $ 62 $ 58 $ 51 Selling, general and administrative expenses 3 2 1 Research, development and engineering expenses, net 22 22 19 Total $ 88 $ 82 $ 71 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Intangible assets as of December 31, 2018 and 2017, were as follows: Total Electronics Segment Brake Systems Segment Goodwill Carrying amount at January 1, 2017 $ 490 $ 278 $ 212 Acquisition 30 13 17 Goodwill impairment charge (234 ) — (234 ) Translation differences 6 — 5 Carrying amount at December 31, 2017 292 292 — Translation differences (1 ) (1 ) — Carrying amount at December 31, 2018 $ 291 $ 291 $ — |
Schedule of finite lived intangible assets | O |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Summary of accrued expenses | As of December 31 2018 2017 Operating related accruals $ 55 $ 55 Employee related accruals 66 57 Customer pricing accruals 39 36 Product related liabilities 1 16 22 Other accruals 18 25 Total Accrued Expenses $ 193 $ 195 1 As of December 31, 2018, $14 million of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets, and there were no indemnification assets as of December 31, 2017. |
Other Comprehensive Loss (Table
Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of comprehensive income (loss) | Year Ended December 31 2018 2017 2016 Other Comprehensive Loss 1 Cumulative translation adjustments $ (10 ) $ (2 ) $ (31 ) Net gain (loss) of cash flow hedge derivatives — (1 ) 8 Pension liability (9 ) (6 ) (6 ) Total (ending balance) $ (19 ) $ (8 ) $ (29 ) Deferred taxes on the pension liability 1 — — 1 The components of Other Comprehensive Loss are net of any related income tax effects. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Summary of pension 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) |
Schedule of changes in projected benefit obligation, fair value of plan assets and funded status of plan | Changes in Benefit Obligations and Plan Assets As of December 31 2018 2017 Benefit obligation at beginning of year $ 74 $ 66 Service cost 5 5 Interest cost 2 1 Actuarial (gain) loss (2 ) 1 Benefits paid (2 ) (1 ) Curtailments — (3 ) Settlement (3 ) — Acquisition — 1 Other 4 — Translation difference (2 ) 4 Benefit obligation at end of year $ 76 $ 74 Fair value of plan assets at beginning of year $ 60 $ 51 Actual return on plan assets (2 ) 3 Company contributions 4 6 Benefits paid (2 ) (1 ) Settlements (3 ) (3 ) Acquisition — 1 Other (1 ) — Translation difference (2 ) 3 Fair value of plan assets at year end $ 54 $ 60 Funded status recognized in the balance sheet $ (22 ) $ (14 ) |
Schedule of net periodic benefit cost | Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan Year Ended December 31 2018 2017 2016 Service cost $ 5 $ 5 $ 4 Interest cost 2 1 1 Expected return on plan assets (2 ) (2 ) (2 ) Net periodic benefit cost $ 4 $ 5 $ 4 |
Schedule of amounts recognized in other comprehensive income (loss) | Components of Accumulated other Comprehensive Income Before Tax As of December 31 2018 2017 Net actuarial loss (gain) $ 9 $ 6 Prior service cost (credit) — 1 Total accumulated other comprehensive income recognized in the balance sheet $ 10 $ 7 Changes in Accumulated Other Comprehensive Income Before Tax As of December 31 2018 2017 Total retirement benefit recognized in accumulated other comprehensive income at beginning of year $ 7 $ 7 Net actuarial loss (gain) 3 (1 ) Translation difference (1 ) 1 Other 1 — Total retirement benefit recognized in accumulated other comprehensive income at end of year $ 10 $ 7 |
Schedule of accumulated and projected benefit obligations in excess of fair value | Pension Plans for Which Accumulated Benefit Obligation (ABO) Exceeds the Fair Value of Plan Assets As of December 31 2018 2017 Projected Benefit Obligation (PBO) $ 76 $ 39 Accumulated Benefit Obligation $ 67 $ 33 Fair value of plan assets $ 54 $ 26 |
Schedule of assumptions used | Assumptions Used to Determine the Benefit Obligation As of December 31 2018 2017 Weighted average Range Discount rate 2.14 % 0.50-3.60 Rate of increases in compensation level 4.39 % 2.00-3.00 Assumptions Used to Determine the Net Periodic Benefit Cost for Years Ended December 31 Year Ended December 31 2018 2017 2016 Weighted average Range Range Discount rate 2.06 % 0.50-3.90 0.50-4.10 Rate of increases in compensation level 4.30 % 2.00-5.00 2.25-5.00 Expected long-term rate of return on assets 3.81 % 0.75-6.00 0.75-6.15 |
Schedule of allocation of plan assets | Fair Value of Total Plan Assets As of December 31 ASSETS CATEGORY IN % WEIGHTED AVERAGE 2018 2017 Equity securities 36.0 % 40.0 % Debt instruments 12.0 % 13.0 % Other assets 52.0 % 47.0 % Total 100.0 % 100.0 % The following table summarizes the fair value of the defined benefit pension plan assets: As of December 31 2018 2017 Assets Equity U.S. Large Cap $ 7 $ 16 Non-U.S. Equity 13 8 Non-U.S. Bonds Corporate 3 — Aggregate 4 7 Insurance Contracts 24 25 Other Investments 4 4 Total $ 54 $ 60 |
Schedule of expected benefit payments | Pension Benefits Expected Payments Amount 2019 $ 2 2020 $ 2 2021 $ 3 2022 $ 3 2023 $ 3 Years 2024-2028 $ 22 |
Schedule of Multiemployer 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 |
Stock Incentive Plan (Tables)
Stock Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of the assumptions for stock options | The table below includes the assumptions for all awards issued: Year Ended December 31 2018 2017 2016 PSs and RSUs Dividend yield 1 — — 2.2 % 1 Dividend equivalent rights applied to grants starting in 2017. |
Schedule of assumptions for equity instruments other than options | The table below includes the assumptions for all awards issued: Year Ended December 31 2018 2017 2016 PSs and RSUs Dividend yield 1 — — 2.2 % 1 Dividend equivalent rights applied to grants starting in 2017. |
A summary of restricted share activity | A summary of RSUs activity is presented below: Number of RSUs RSUs 1 Outstanding as of June 30, 2018 (Converted from former Parent in connection with the Spin-Off) 601,740 Granted 9,380 Shares issued (7,490 ) Cancelled/Forfeited/Expired (9,636 ) Outstanding as of December 31, 2018 593,994 1 RSUs presented in this table represent Veoneer awards, including those held by Autoliv employees. |
A summary of stock option activity | Number of Options SOs 1 Outstanding at June 30, 2018 (Converted from former Parent in connection with the Spin-Off) 355,646 Exercised (30,062 ) Cancelled/Forfeited/Expired — Outstanding as of December 31, 2018 325,584 1 SOs presented in this table represent Veoneer awards, including those held by Autoliv employees. |
The following summarizes information about stock options outstanding and exercisable | The following summarizes information about stock options outstanding and exercisable as of December 31, 2018: Number Outstanding 1 Remaining Contract life (in years) EXERCISE PRICES $4.93 16,796 0.14 $13.51 21,342 1.13 $20.25 21,266 3.15 $20.91 43,934 4.14 $22.04 15,055 2.15 $28.67 80,627 5.14 $34.25 126,564 6.13 325,584 4.6 1 SOs presented in this table represent Veoneer awards, including those held by Autoliv employees. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Change in Product Related Liabilities | The table below summarizes the change in product related liabilities in the Consolidated Balance Sheets. As of December 31 2018 2017 Reserve at beginning of the year $ 22 $ 30 Change in reserve 10 8 Cash settlements (15 ) (16 ) Transfers (1 ) — Translation difference — 1 Reserve at end of the year $ 16 $ 22 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted loss per share | The following table sets forth the computation of basic and diluted loss per share. (U.S. dollars in millions, except per share amounts) Year Ended December 31 2018 2017 2016 Numerator: Basic and diluted: Net loss attributable to common shareholders $ (276 ) $ (217 ) $ (53 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.16 87.13 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.16 87.13 87.13 Basic loss per share $ (3.17 ) $ (2.49 ) $ (0.61 ) Diluted loss per share 1 $ (3.17 ) $ (2.49 ) $ (0.61 ) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. The shares excluded from the calculation were 446,821 for the year ended December 31, 2018, because they are anti-dilutive and for the years ended December 31, 2017 and 2016, the shares excluded were zero . |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Key financial measures reviewed by the Company’s CODM are as follows. Year Ended December 31 (Loss)/Income Before Income Taxes 2018 2017 2016 Electronics $ (116 ) $ (14 ) $ 11 Brake Systems (30 ) (247 ) (12 ) Segment operating loss (146 ) (261 ) (1 ) Corporate and other (51 ) (22 ) (24 ) Interest and other non-operating items, net 7 (1 ) 3 Loss from equity method investment (63 ) (31 ) — Loss before income taxes $ (253 ) $ (314 ) $ (22 ) Year Ended December 31 Capital Expenditures 2018 2017 2016 Electronics $ 132 $ 79 $ 80 Brake Systems 56 31 23 Total capital expenditures $ 188 $ 110 $ 103 Year Ended December 31 Depreciation and Amortization 2018 2017 2016 Electronics $ 72 $ 80 $ 70 Brake Systems 38 39 36 Total depreciation and amortization $ 111 $ 119 $ 106 As of December 31 Segment Assets 2018 2017 Electronics $ 2,329 $ 1,286 Brake Systems 507 377 Intersegment assets (204 ) — Total assets $ 2,632 $ 1,663 |
Long-lived assets by geographic area | As of December 31 Long-lived Assets 2018 2017 Asia $ 307 $ 302 Americas 368 393 Europe 438 242 Total $ 1,113 $ 938 |
Relationship with Former Pare_2
Relationship with Former Parent and Related Entities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Summary of amount due to and from related parties | Amounts due to and due from related party components as summarized in the below table: As of December 31 RELATED PARTY 2018 2017 Related party receivable $ 64 $ 13 Related party notes receivable $ 1 $ 76 Related party payables $ 16 $ 8 Related party short term debt $ 1 $ — Related party long-term debt $ 13 $ 62 |
Summary Quarterly Financial D_2
Summary Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | The following table presents summary quarterly financial data: 2018 2017 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter (Dollars in Millions, Except Per Share Amounts) Sales $ 594 $ 572 $ 526 $ 535 $ 583 $ 579 $ 567 $ 593 Gross profit 112 112 99 109 113 120 109 124 Operating loss (16 ) (48 ) (58 ) (75 ) (10 ) (12 ) (16 ) (244 ) Loss before income taxes (30 ) (63 ) (70 ) (90 ) (11 ) (19 ) (26 ) (258 ) Net loss (37 ) (66 ) (72 ) (119 ) (22 ) (30 ) (36 ) (256 ) Net loss attributable to controlling interest $ (32 ) $ (63 ) $ (68 ) $ (114 ) $ (20 ) $ (28 ) $ (33 ) $ (136 ) Per Share Data: Basic loss per share $ (0.36 ) $ (0.72 ) $ (0.78 ) $ (1.31 ) $ (0.23 ) $ (0.32 ) $ (0.38 ) $ (1.56 ) Diluted loss per share $ (0.36 ) $ (0.72 ) $ (0.78 ) $ (1.31 ) $ (0.23 ) $ (0.32 ) $ (0.38 ) $ (1.56 ) |
Basis of Presentation (Details)
Basis of Presentation (Details) - segment | Jun. 29, 2018 | Dec. 31, 2018 |
Restructuring Cost and Reserve [Line Items] | ||
Number of operating segments | 2 | |
Autoliv | Spin-Off | ||
Restructuring Cost and Reserve [Line Items] | ||
Distribution percentage of outstanding common stock | 100.00% | |
Conversion ratio | 1 | |
Common Stock | Autoliv | Spin-Off | ||
Restructuring Cost and Reserve [Line Items] | ||
Conversion ratio | 1 | |
Swedish Depository Receipts | Autoliv | Spin-Off | ||
Restructuring Cost and Reserve [Line Items] | ||
Conversion ratio | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 29, 2018USD ($) | Dec. 31, 2015USD ($) |
Product Information [Line Items] | ||||||||
Capitalized contract costs | $ 54,000,000 | $ 23,000,000 | $ 23,000,000 | $ 54,000,000 | $ 23,000,000 | |||
Impairment losses recognized related to contract assets | $ 0 | 0 | ||||||
Number of operating segments | segment | 2 | |||||||
Production parts average payment terms | 30 days | |||||||
Cash and cash equivalents | 864,000,000 | 0 | 0 | $ 864,000,000 | 0 | $ 0 | $ 1,000,000,000 | $ 0 |
Short-term investments | 5,000,000 | 0 | 0 | 5,000,000 | 0 | |||
Capitalized amount | 48,000,000 | 48,000,000 | ||||||
Goodwill, impairment charge | 0 | 234,000,000 | 0 | |||||
Goodwill | 291,000,000 | 292,000,000 | 292,000,000 | 291,000,000 | 292,000,000 | 490,000,000 | ||
Net transaction gains/(loss) | (2,000,000) | 3,000,000 | 1,000,000 | |||||
Brake Systems | ||||||||
Product Information [Line Items] | ||||||||
Goodwill, impairment charge | 234,000,000 | 234,000,000 | ||||||
Goodwill | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 212,000,000 | ||
Minimum | ||||||||
Product Information [Line Items] | ||||||||
Finite-lived intangible asset, useful life | 5 years | |||||||
Maximum | ||||||||
Product Information [Line Items] | ||||||||
Finite-lived intangible asset, useful life | 10 years | |||||||
Four Largest Customers | Sales Revenue | Customer Concentration Risk | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk, percentage | 58.00% | 62.00% | 59.00% | |||||
Four Largest Customers | Accounts Receivable | Customer Concentration Risk | ||||||||
Product Information [Line Items] | ||||||||
Concentration risk, percentage | 52.00% | 55.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Adjustments Made Due to ASU 2014-09 (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Inventories, net | $ 172,000,000 | $ 154,000,000 | $ 172,000,000 | $ 154,000,000 | $ 149,000,000 | |||||||
Prepaid expenses and other contract assets | 39,000,000 | 34,000,000 | 39,000,000 | 34,000,000 | 41,000,000 | |||||||
Additional paid-in capital | 1,938,000,000 | 0 | 1,938,000,000 | 0 | ||||||||
Net Former Parent investment | 0 | 844,000,000 | 0 | 844,000,000 | 845,000,000 | |||||||
Net sales | 535,000,000 | $ 526,000,000 | $ 572,000,000 | $ 594 | 593,000,000 | $ 567,000,000 | $ 579,000,000 | $ 583,000,000 | 2,228,000,000 | 2,322,000,000 | $ 2,218,000,000 | |
Cost of sales | (1,798,000,000) | (1,857,000,000) | (1,795,000,000) | |||||||||
Operating loss | (75,000,000) | $ (58,000,000) | $ (48,000,000) | $ (16) | (244,000,000) | $ (16,000,000) | $ (12,000,000) | $ (10,000,000) | (197,000,000) | (283,000,000) | $ (25,000,000) | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Inventories, net | 178,000,000 | 154,000,000 | 178,000,000 | 154,000,000 | ||||||||
Prepaid expenses and other contract assets | 31,000,000 | 34,000,000 | 31,000,000 | 34,000,000 | ||||||||
Additional paid-in capital | 1,937,000,000 | 1,937,000,000 | ||||||||||
Net Former Parent investment | $ 844,000,000 | $ 844,000,000 | ||||||||||
Net sales | 2,227,000,000 | |||||||||||
Cost of sales | (1,797,000,000) | |||||||||||
Operating loss | (197,000,000) | |||||||||||
Accounting Standards Update 2014-09 | Adjustments due to ASU 2014-09 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||||
Inventories, net | (6,000,000) | (6,000,000) | (5,000,000) | |||||||||
Prepaid expenses and other contract assets | 8,000,000 | 8,000,000 | 7,000,000 | |||||||||
Additional paid-in capital | $ 1,000,000 | 1,000,000 | ||||||||||
Net Former Parent investment | $ 1,000,000 | |||||||||||
Net sales | 1,000,000 | |||||||||||
Cost of sales | (1,000,000) | |||||||||||
Operating loss | $ 0 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 535,000,000 | $ 526,000,000 | $ 572,000,000 | $ 594 | $ 593,000,000 | $ 567,000,000 | $ 579,000,000 | $ 583,000,000 | $ 2,228,000,000 | $ 2,322,000,000 | $ 2,218,000,000 |
Capitalized contract costs | 54,000,000 | $ 23,000,000 | 54,000,000 | 23,000,000 | |||||||
Non-US | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 356,000,000 | $ 159,000,000 | $ 222,000,000 | ||||||||
Direct And Incremental Costs | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Capitalized contract costs | $ 12,000,000 | $ 12,000,000 |
Revenue Revenue - Revenue Disag
Revenue Revenue - Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 535,000,000 | $ 526,000,000 | $ 572,000,000 | $ 594 | $ 593,000,000 | $ 567,000,000 | $ 579,000,000 | $ 583,000,000 | $ 2,228,000,000 | $ 2,322,000,000 | $ 2,218,000,000 |
Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 2,228,000,000 | 2,326,000,000 | 2,228,000,000 | ||||||||
Operating Segments | Asia | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 794,000,000 | 851,000,000 | 797,000,000 | ||||||||
Operating Segments | Americas | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 754,000,000 | 812,000,000 | 832,000,000 | ||||||||
Operating Segments | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 680,000,000 | 663,000,000 | 598,000,000 | ||||||||
Operating Segments | Restraint Control Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 974,000,000 | 1,073,000,000 | 1,097,000,000 | ||||||||
Operating Segments | Active Safety products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 825,000,000 | 778,000,000 | 740,000,000 | ||||||||
Operating Segments | Brake Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 428,000,000 | 476,000,000 | 391,000,000 | ||||||||
Less: intercompany sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | (4,000,000) | (9,000,000) | ||||||||
Electronics | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 1,800,000,000 | 1,849,000,000 | 1,835,000,000 | ||||||||
Electronics | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 1,799,000,000 | 1,850,000,000 | 1,837,000,000 | ||||||||
Electronics | Operating Segments | Asia | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 424,000,000 | 489,000,000 | 521,000,000 | ||||||||
Electronics | Operating Segments | Americas | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 696,000,000 | 698,000,000 | 717,000,000 | ||||||||
Electronics | Operating Segments | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 680,000,000 | 663,000,000 | 598,000,000 | ||||||||
Electronics | Operating Segments | Restraint Control Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 974,000,000 | 1,073,000,000 | 1,097,000,000 | ||||||||
Electronics | Operating Segments | Active Safety products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 825,000,000 | 778,000,000 | 740,000,000 | ||||||||
Electronics | Operating Segments | Brake Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Electronics | Less: intercompany sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | (1,000,000) | (1,000,000) | ||||||||
Brake Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 428,000,000 | 473,000,000 | 383,000,000 | ||||||||
Brake Systems | Operating Segments | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 428,000,000 | 476,000,000 | 391,000,000 | ||||||||
Brake Systems | Operating Segments | Asia | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 370,000,000 | 362,000,000 | 276,000,000 | ||||||||
Brake Systems | Operating Segments | Americas | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 58,000,000 | 114,000,000 | 115,000,000 | ||||||||
Brake Systems | Operating Segments | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Brake Systems | Operating Segments | Restraint Control Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Brake Systems | Operating Segments | Active Safety products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Brake Systems | Operating Segments | Brake Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | 428,000,000 | 476,000,000 | 391,000,000 | ||||||||
Brake Systems | Less: intercompany sales | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 0 | $ (3,000,000) | $ (8,000,000) |
Revenue Revenue - Summary of In
Revenue Revenue - Summary of Information about Contract Balances with Customers (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Receivables, net | $ 376 | $ 448 |
Contract assets | $ 8 | $ 0 |
Revenue Revenue - Summary of Ch
Revenue Revenue - Summary of Changes in Contract Assets (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Change in Contract with Customer, Asset [Abstract] | |
Beginning balance | $ 0 |
Increases due to cumulative catch up adjustment | 8 |
Increases due to revenue recognized | 31 |
Decreases due to transfer to receivables | (31) |
Ending balance | $ 8 |
Business Combinations - Fotoni
Business Combinations - Fotonic i Norden dp AB Acquisition (Details) $ in Millions | Nov. 01, 2017USD ($)expert | Mar. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 291 | $ 292 | $ 490 | ||
Fotonic i Norden dp AB | |||||
Business Acquisition [Line Items] | |||||
Business combination, consideration transferred | $ 17 | ||||
Consideration transferred in cash | 15 | ||||
Deferred purchase consideration | $ 2 | ||||
Deferred purchase price, recognition 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 | ||||
Other current liabilities (less than) | $ 1 | ||||
Fotonic i Norden dp AB | IP | |||||
Business Acquisition [Line Items] | |||||
Intangible assets remaining useful life | 5 years | ||||
Autoliv Nissin Brakes Systems | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred in cash | $ 263 | ||||
Net assets acquired | 515 | ||||
Business combination, intangible assets | 112 | ||||
Goodwill | 235 | ||||
Other current liabilities (less than) | $ 23 |
Business Combinations - Autoli
Business Combinations - Autoliv-Nissin Brake Systems Acquisition (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||||||||
Operating loss | $ (75,000,000) | $ (58,000,000) | $ (48,000,000) | $ (16) | $ (244,000,000) | $ (16,000,000) | $ (12,000,000) | $ (10,000,000) | $ (197,000,000) | $ (283,000,000) | $ (25,000,000) | ||
Goodwill | 291,000,000 | 292,000,000 | $ 490,000,000 | 291,000,000 | 292,000,000 | 490,000,000 | |||||||
Related party short-term debt | $ 1,000,000 | $ 0 | $ 1,000,000 | 0 | |||||||||
Autoliv Nissin Brakes Systems | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Interest acquired | 51.00% | ||||||||||||
Consideration transferred in cash | $ 263,000,000 | ||||||||||||
Sales in acquiree since acquisition date | 391,000,000 | ||||||||||||
Net loss in acquiree since acquisition date | 5,000,000 | ||||||||||||
Net loss in acquiree since acquisition date attributable to noncontrolling interest | 7,000,000 | ||||||||||||
Acquisition related costs | 2,000,000 | ||||||||||||
Business combination, intangible assets | 112,000,000 | ||||||||||||
Goodwill | 235,000,000 | ||||||||||||
Autoliv Nissin Brakes Systems | Customer Contracts | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, intangible assets | $ 51,000,000 | ||||||||||||
Acquired intangible assets, useful life | 7 years | ||||||||||||
Autoliv Nissin Brakes Systems | Technology-Based Intangible Assets | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business combination, intangible assets | $ 61,000,000 | ||||||||||||
Acquired intangible assets, useful life | 10 years | ||||||||||||
Autoliv Nissin Brakes Systems | Affiliated Entity | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Repayments of short-term debt | $ 4,000,000 | ||||||||||||
Fair Value Adjustment to Inventory | Autoliv Nissin Brakes Systems | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Operating loss | 1,000,000 | ||||||||||||
Autoliv Nissin Brake System China Zhongshan | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership by parent | 51.00% | ||||||||||||
Autoliv Nissin Brakes Systems | Nissin Kogyo | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Ownership percentage in joint venture | 49.00% | ||||||||||||
Autoliv Nissin Brake System China Zhongshan | Autoliv Nissin Brakes Systems | Affiliated Entity | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Related party short-term debt | $ 4,000,000 | $ 4,000,000 |
Business Combinations - Schedu
Business Combinations - Schedule of Assets Acquired and Liabilities Assumed, Autoliv-Nissin Brake Systems Acquisition (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Assets: | ||||
Goodwill | $ 291 | $ 292 | $ 490 | |
Autoliv Nissin Brakes Systems | ||||
Assets: | ||||
Cash and cash equivalents | $ 38 | |||
Receivables | 2 | |||
Inventories | 33 | |||
Other current assets | 8 | |||
Property, plant and equipment | 139 | |||
Other non-current assets | 0 | |||
Intangibles | 112 | |||
Goodwill | 235 | |||
Total assets | 566 | |||
Liabilities: | ||||
Accounts payable | 6 | |||
Other current liabilities | 23 | |||
Pension liabilities | 9 | |||
Other non-current liabilities | 13 | |||
Total liabilities | 51 | |||
Net assets acquired | 515 | |||
Less: Non-controlling interest | (252) | |||
Controlling interest | $ 263 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018contract | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Fair value of earn out liability | $ 14,000,000 | $ 14,000,000 | |||||
Other operating income from earn out liability adjustment | 13,000,000 | ||||||
Fair value of contingent consideration | $ 0 | ||||||
Goodwill, impairment charge | 0 | 234,000,000 | $ 0 | ||||
Foreign exchange swap | 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 | ||||||
Foreign exchange forward contracts | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivative asset | 67,000,000 | 103,000,000 | 67,000,000 | ||||
Derivative liability | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Maximum | Foreign exchange swap | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Maturity period of swap contracts | 6 months | ||||||
Fair Value Measured at Net Asset Value Per Share | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investments | $ 8,000,000 | $ 15,000,000 | |||||
VNBS | Fair Value, Measurements, Nonrecurring | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Goodwill, impairment charge | $ 234,000,000 | ||||||
Customer Contracts | M A C O M Technology Solutions Holdings Inc | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Impairment of finite lived intangible assets | $ 12,000,000 | ||||||
Customer Contracts | M A C O M Technology Solutions Holdings Inc | Fair Value, Measurements, Nonrecurring | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Impairment of finite lived intangible assets | $ 12,000,000 |
Fair Value Measurements - Gains
Fair Value Measurements - Gains and Losses on Derivative Financial Instruments (Details) - Fair Value, Measurements, Recurring - Foreign exchange forward contracts - Cost of sales - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives, Fair Value [Line Items] | |||
Recorded into gain (loss) | $ 0 | $ 0 | $ 0 |
Recorded gains (loss) into AOCI net of tax | 0 | (4) | 9 |
Less: reclassified from AOCI into gain (loss) | (1) | 5 | 1 |
Gains and losses on derivative financial instruments | $ 1 | $ (9) | $ 8 |
Income Taxes - Income Before In
Income Taxes - Income Before Income Tax (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss before taxes | |||||||||||
U.S. | $ (54,000,000) | $ (200,000,000) | $ (78,000,000) | ||||||||
Non-U.S. | (199,000,000) | (114,000,000) | 56,000,000 | ||||||||
Loss before income taxes | $ (90,000,000) | $ (70,000,000) | $ (63,000,000) | $ (30) | $ (258,000,000) | $ (26,000,000) | $ (19,000,000) | $ (11,000,000) | $ (253,000,000) | $ (314,000,000) | $ (22,000,000) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||
Non-U.S. | $ 22 | $ 40 | $ 41 |
Deferred | |||
U.S. federal | (4) | (1) | 2 |
Non-U.S. | 24 | (9) | (4) |
Total income tax expense | $ 42 | $ 30 | $ 38 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective income tax rate | |||
U.S. federal income tax rate | $ (53) | $ (110) | $ (8) |
Foreign tax rate variances | 1 | 9 | (2) |
State taxes, net of federal benefit | 0 | (2) | (1) |
Tax credits | (9) | (10) | (9) |
Change in Valuation Allowances | 79 | 62 | 51 |
Non-Controlling Interest | 3 | 21 | 1 |
Earnings of equity investments | 13 | 7 | 0 |
Withholding taxes | 5 | 4 | 4 |
Goodwill impairment | 0 | 13 | 0 |
Change in U.S. tax rate | 0 | 35 | 0 |
Other, net | 3 | 2 | 1 |
Total income tax expense | $ 42 | $ 30 | $ 38 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Valuation allowance period increase (decrease) | $ 0 | ||
Deferred tax assets, period increase (decrease) | 4 | ||
Operating loss carryforwards | 289 | ||
Operating loss carryforward not subject to expiration | 153 | ||
Unrecognized tax benefits | 2 | $ 2 | $ 1 |
Unrecognized tax benefits that would impact effective tax rate | 2 | ||
Deferred tax assets | 11 | 30 | |
Deferred tax liabilities | 13 | 17 | |
Deferred tax liabilities for unremitted foreign earnings | 7 | ||
Estimated foreign earnings | 146 | ||
Other Noncurrent Liabilities | |||
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits | 1 | ||
Deferred tax liabilities | 13 | 17 | |
Other Current Liabilities | |||
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits | 1 | ||
Investments And Other Non Current Assets | |||
Income Tax Contingency [Line Items] | |||
Deferred tax assets | 11 | $ 30 | |
Research and Development Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforwards | $ 2 |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Provisions | $ 39 | $ 44 |
Costs capitalized for tax | 1 | 2 |
Acquired intangibles | 20 | 12 |
Tax receivables, principally net operating loss carryforward | 74 | 112 |
Credits | 2 | 9 |
Other | 3 | 0 |
Deferred tax assets before allowances | 139 | 179 |
Valuation allowances | (125) | (150) |
Total | 14 | 29 |
Liabilities | ||
Property, plant and equipment | (9) | (6) |
Distribution taxes | (7) | (8) |
Other | 0 | (2) |
Total | (16) | (16) |
Net deferred tax liability | $ (2) | |
Net deferred tax asset (liability) | $ 13 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowances Against Deferred Tax Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowances Against Deferred Tax Assets | ||
Settlement of tax matters with Former Parent1 | $ (101) | $ 0 |
Deferred tax asset valuation allowance | ||
Valuation Allowances Against Deferred Tax Assets | ||
Allowances at beginning of year | 150 | 90 |
Allowances at end of year | 125 | 150 |
Deferred tax asset valuation allowance | Benefits reserved current year | ||
Valuation Allowances Against Deferred Tax Assets | ||
Benefits reserved current year | 83 | 98 |
Deferred tax asset valuation allowance | Benefits recognized current year | ||
Valuation Allowances Against Deferred Tax Assets | ||
Benefits recognized current year | 0 | (4) |
Deferred tax asset valuation allowance | Change in Tax rate /impact of U.S. tax reform | ||
Valuation Allowances Against Deferred Tax Assets | ||
Change in Tax rate /impact of U.S. tax reform | (4) | (35) |
Deferred tax asset valuation allowance | Translation difference | ||
Valuation Allowances Against Deferred Tax Assets | ||
Translation difference | $ (3) | $ 1 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
UNRECOGNIZED TAX BENEFITS | ||
Unrecognized tax benefits at beginning of year | $ 2 | $ 1 |
Increases as a result of tax positions taken during the current period | 2 | 1 |
Settlement with net former parent | (2) | 0 |
Total unrecognized tax benefits at end of year | $ 2 | $ 2 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Receivables | $ 378 | $ 450 |
Allowance | ||
Allowance at beginning of year | (2) | (4) |
Allowance at end of year | (2) | (2) |
Total receivables, net of allowance | 376 | 448 |
Allowance | ||
Allowance | ||
Reversal of allowance | 0 | $ 2 |
Trade receivables without recourse | ||
Allowance | ||
Trade notes receivables | 10 | |
Bank notes without recourse | ||
Allowance | ||
Trade notes receivables | 9 | |
CHINA | ||
Allowance | ||
Trade notes receivables | $ 19 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Raw material | $ 108 | $ 90 | |
Work in progress | 15 | 21 | |
Finished products | 71 | 70 | |
Inventories | 194 | 181 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Inventory reserve at beginning of year | (27) | (25) | |
Inventory reserve at end of year | (23) | (27) | |
Total inventories, net of reserve | 172 | 154 | $ 149 |
Inventory | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Reversal of allowance | 1 | 5 | |
Addition to allowance | (3) | (6) | |
Write-off against allowance | 5 | 1 | |
Translation difference | $ 1 | $ (2) |
Equity Method Investment - Narr
Equity Method Investment - Narrative (Details) kr in Millions, $ in Millions | Apr. 18, 2017USD ($) | Apr. 18, 2017SEK (kr) | Dec. 31, 2018USD ($)investment | Dec. 31, 2018SEK (kr) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of equity method investments | investment | 1 | |||||
Undistributed loss from equity method investments | $ 63 | $ 31 | $ 0 | |||
Equity method investment | 101 | 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% | ||||
Equity value of joint venture | $ 250 | |||||
Share in equity value of joint venture | $ 125 | |||||
Undistributed loss from equity method investments | $ 63 | 31 | ||||
Equity method investment | $ 101 | $ 98 | ||||
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 | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||
Net sales | $ 5 | $ 5 | $ 0 |
Gross profit | 0 | 0 | 0 |
Operating loss | (125) | (61) | 0 |
Loss before income taxes | (125) | (61) | 0 |
Net loss | $ (125) | $ (61) | $ 0 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 971 | $ 778 | |
Less accumulated depreciation | (472) | (416) | |
Net of accumulated depreciation | 499 | 362 | |
Depreciation | 88 | 82 | $ 71 |
Cost of sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 62 | 58 | 51 |
Selling, general and administrative expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 3 | 2 | 1 |
Research, development and engineering expenses, net | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 22 | 22 | $ 19 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 21 | 20 | |
Land and land improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated life | 15 years | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 662 | 610 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated life | 3 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated life | 8 years | ||
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 111 | 76 | |
Estimated life | 20 years | ||
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 177 | $ 72 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Fixed assets impairment | $ 1 | $ 0 | $ 0 |
Net book value of assets under capital lease | $ 13 | $ 11 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Changes in Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
GOODWILL | ||||
Goodwill, beginning of period | $ 292,000,000 | $ 490,000,000 | ||
Acquisition | 30,000,000 | |||
Goodwill impairment charge | 0 | (234,000,000) | $ 0 | |
Translation differences | (1,000,000) | 6,000,000 | ||
Goodwill, end of period | $ 292,000,000 | 291,000,000 | 292,000,000 | 490,000,000 |
Electronics | ||||
GOODWILL | ||||
Goodwill, beginning of period | 292,000,000 | 278,000,000 | ||
Acquisition | 13,000,000 | |||
Goodwill impairment charge | 0 | |||
Translation differences | (1,000,000) | 0 | ||
Goodwill, end of period | 292,000,000 | 291,000,000 | 292,000,000 | 278,000,000 |
Brake Systems | ||||
GOODWILL | ||||
Goodwill, beginning of period | 0 | 212,000,000 | ||
Acquisition | 17,000,000 | |||
Goodwill impairment charge | (234,000,000) | (234,000,000) | ||
Translation differences | 0 | 5,000,000 | ||
Goodwill, end of period | $ 0 | $ 0 | $ 0 | $ 212,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||||
Goodwill, acquired during period | $ 30,000,000 | ||||
Goodwill, impairment charge | $ 0 | 234,000,000 | $ 0 | ||
Intangible assets, net | $ 122,000,000 | 102,000,000 | 122,000,000 | ||
Amortization of intangibles | 23,000,000 | 37,000,000 | $ 35,000,000 | ||
Amortization, 2019 | 22,000,000 | ||||
Amortization, 2020 | 21,000,000 | ||||
Amortization, 2021 | 19,000,000 | ||||
Amortization, 2022 | 17,000,000 | ||||
Amortization, 2023 | 8,000,000 | ||||
Fotonic i Norden dp AB | |||||
Goodwill [Line Items] | |||||
Goodwill, acquired during period | 13,000,000 | ||||
Autoliv Nissin Brakes Systems | |||||
Goodwill [Line Items] | |||||
Goodwill, acquired during period | $ 17,000,000 | ||||
Customer Contracts | |||||
Goodwill [Line Items] | |||||
Intangible assets, net | 38,000,000 | 31,000,000 | 38,000,000 | ||
Customer Contracts | M A C O M Technology Solutions Holdings Inc | |||||
Goodwill [Line Items] | |||||
Impairment of finite lived intangible assets | 12,000,000 | ||||
Technology-Based Intangible Assets | |||||
Goodwill [Line Items] | |||||
Intangible assets, net | 80,000,000 | $ 71,000,000 | 80,000,000 | ||
Brake Systems | |||||
Goodwill [Line Items] | |||||
Goodwill, acquired during period | 17,000,000 | ||||
Goodwill, impairment charge | $ 234,000,000 | $ 234,000,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Finite Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
AMORTIZABLE INTANGIBLES | ||
Gross carrying amount | $ 260 | $ 249 |
Acquisition | 3 | 4 |
Translation differences | 1 | 7 |
Accumulated amortization | (161) | (138) |
Intangible assets, net | $ 102 | $ 122 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Operating related accruals | $ 55 | $ 55 |
Employee related accruals | 66 | 57 |
Customer pricing accruals | 39 | 36 |
Product related liabilities | 16 | 22 |
Other accruals | 18 | 25 |
Total Accrued Expenses | 193 | $ 195 |
Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Product related liabilities | $ 14 |
Other Comprehensive Loss (Detai
Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | $ 1,927 | $ 957 | $ 1,089 | $ 591 |
Cumulative translation adjustments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | (10) | (2) | (31) | |
Net gain (loss) of cash flow hedge derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | 0 | (1) | 8 | |
Pension liability | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | 9 | 6 | 6 | |
AOCI, tax portion | 1 | 0 | 0 | |
AOCI | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stockholders' equity | $ (19) | $ (8) | $ (29) |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 01, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined benefit plan net periodic benefit cost (less than) | $ 1 | $ 1 | $ 1 | |||
Defined contribution plan, cost | $ 2 | 1 | 1 | |||
Canada | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Benefit obligation | 4 | 3 | 3 | |||
Pension Plans, Defined Benefit | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension expense | 4 | 5 | 4 | |||
Benefit obligation | 76 | 74 | 66 | |||
Net periodic benefit cost | 4 | 5 | $ 4 | |||
Accumulated benefit obligation | 67 | 33 | ||||
Company contributions | $ 4 | 6 | ||||
Pension Plans, Defined Benefit | Japan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected long-term rate of return on assets | 0.75% | |||||
Pension Plans, Defined Benefit | Canada | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Expected long-term rate of return on assets | 6.00% | |||||
Pension Plans, Defined Benefit | Transferred Veoneer Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Benefit obligation | $ 6 | |||||
Pension Plans, Defined Benefit | Veoneer Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Company contributions | $ 4 | 6 | ||||
Expected future employer contributions, next fiscal year | 3 | |||||
Pension Plans, Defined Benefit | Autoliv Sponsored Plans | U.S. | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined benefit plan expense and contributions | $ 1 | 1 | ||||
Postretirement Benefits Other Than Pension | Canadian Medical Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Benefit obligation | $ 1 | |||||
Scenario, Forecast | Pension Plans, Defined Benefit | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Net periodic benefit cost | $ 6 |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Changes in Benefit Obligations and Plan Assets (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in Benefit Obligation | |||
Benefit obligation at beginning of year | $ 74 | $ 66 | |
Service cost | 5 | 5 | $ 4 |
Interest cost | 2 | 1 | 1 |
Actuarial (gain) loss | (2) | 1 | |
Benefits paid | (2) | (1) | |
Curtailments | 0 | (3) | |
Settlement | (3) | 0 | |
Acquisition | 0 | 1 | |
Other | 4 | 0 | |
Translation difference | (2) | 4 | |
Benefit obligation at end of year | 76 | 74 | 66 |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | 60 | 51 | |
Actual return on plan assets | (2) | 3 | |
Company contributions | 4 | 6 | |
Benefits paid | (2) | (1) | |
Settlements | (3) | (3) | |
Acquisition | 0 | 1 | |
Other | (1) | 0 | |
Translation difference | (2) | 3 | |
Fair value of plan assets at year end | 54 | 60 | $ 51 |
Funded status recognized in the balance sheet | $ (22) | $ (14) |
Retirement Plans - Schedule o_2
Retirement Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 5 | $ 5 | $ 4 |
Interest cost | 2 | 1 | 1 |
Expected return on plan assets | (2) | (2) | (2) |
Net periodic benefit cost | $ 4 | $ 5 | $ 4 |
Retirement Plans - Schedule o_3
Retirement Plans - Schedule of Components of Accumulated Other Comprehensive Income Before Tax (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss (gain) | $ 9 | $ 6 | |
Prior service cost (credit) | 0 | 1 | |
Total accumulated other comprehensive income recognized in the balance sheet | $ 10 | $ 7 | $ 7 |
Retirement Plans - Changes in A
Retirement Plans - Changes in Accumulated Other Comprehensive Income Before Tax (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan, Accumulated Other Comprehensive (Income) Loss, before Tax [Roll Forward] | ||
Total retirement benefit recognized in accumulated other comprehensive income at beginning of year | $ 7 | $ 7 |
Net actuarial loss (gain) | 3 | (1) |
Translation difference | (1) | 1 |
Other | 1 | 0 |
Total retirement benefit recognized in accumulated other comprehensive income at end of year | $ 10 | $ 7 |
Retirement Plans - Pension Plan
Retirement Plans - Pension Plans for Which ABO Exceeds the Fair Value of Plan Assets (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Projected Benefit Obligation (PBO) | $ 76 | $ 39 |
Accumulated Benefit Obligation | 67 | 33 |
Fair value of plan assets | $ 54 | $ 26 |
Retirement Plans - Assumptions
Retirement Plans - Assumptions Used to Determine the Benefit Obligation (Details) - Pension Plans, Defined Benefit | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net benefit obligation | |||
Discount rate | 2.14% | ||
Rate of increases in compensation level | 4.39% | ||
Weighted average | |||
Net periodic benefit cost | |||
Discount rate | 2.06% | ||
Rate of increases in compensation level | 4.30% | ||
Expected long-term rate of return on assets | 3.81% | ||
Minimum | |||
Net benefit obligation | |||
Discount rate | 0.50% | ||
Rate of increases in compensation level | 2.00% | ||
Net periodic benefit cost | |||
Discount rate | 0.50% | 0.50% | |
Rate of increases in compensation level | 2.00% | 2.25% | |
Expected long-term rate of return on assets | 0.75% | 0.75% | |
Maximum | |||
Net benefit obligation | |||
Discount rate | 3.60% | ||
Rate of increases in compensation level | 3.00% | ||
Net periodic benefit cost | |||
Discount rate | 3.90% | 4.10% | |
Rate of increases in compensation level | 5.00% | 5.00% | |
Expected long-term rate of return on assets | 6.00% | 6.15% |
Retirement Plans - Schedule o_4
Retirement Plans - Schedule of Allocation Plan Assets (Details) - Pension Plans, Defined Benefit | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 100.00% | 100.00% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 36.00% | 40.00% |
Debt instruments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 12.00% | 13.00% |
Other assets | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 52.00% | 47.00% |
Retirement Plans - Schedule o_5
Retirement Plans - Schedule of Fair Value of Plan Assets (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | $ 54 | $ 60 | $ 51 |
Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 54 | 60 | |
U.S. Equity Large Cap | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 7 | 16 | |
U.S. Equity Non-U.S. Equity | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 13 | 8 | |
Non-U.S. Bonds Corporate | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 3 | 0 | |
Non-U.S. Bonds Aggregate | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 4 | 7 | |
Non-U.S. Bonds Insurance Contracts | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | 24 | 25 | |
Other Investments | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Assets | $ 4 | $ 4 |
Retirement Plans - Schedule o_6
Retirement Plans - Schedule of Estimated Expected Future Benefits (Details) - Pension Plans, Defined Benefit $ in Millions | Dec. 31, 2018USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 2 |
2,020 | 2 |
2,021 | 3 |
2,022 | 3 |
2,023 | 3 |
Years 2024-2028 | $ 22 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) | Jun. 29, 2018 | Feb. 13, 2018 | Feb. 19, 2017 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 5,000,000 | $ 2,000,000 | $ 3,000,000 | |||||
Options granted in the period (in shares) | 0 | 0 | 0 | |||||
Compensation cost not yet recognized, stock options | $ 0 | $ 0 | ||||||
Share price (in dollars per share) | $ 23.57 | $ 23.57 | ||||||
Intrinsic value of outstanding stock options | $ 1,000,000 | $ 1,000,000 | ||||||
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) | 957,388 | |||||||
Stock Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 0 | |||||||
Expiration period | 10 years | |||||||
Requisite service period | 1 year | |||||||
RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant date fair value | $ 6,000,000 | $ 2,000,000 | ||||||
Grant date fair value (in dollars per share) | $ 42.88 | $ 31.98 | $ 29.81 | |||||
Awards granted in the period (in shares) | 9,380,000,000 | |||||||
Awards outstanding (in shares) | 593,994,000,000 | 593,994,000,000 | 601,740,000,000 | |||||
PSs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Grant date fair value | $ 3,000,000 | |||||||
Grant date fair value (in dollars per share) | $ 31.98 | $ 29.81 | ||||||
Awards granted in the period (in shares) | 0 | |||||||
Awards outstanding (in shares) | 0 | 0 | ||||||
RSUs and PSs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Compensation cost not yet recognized | $ 6,000,000 | $ 6,000,000 | ||||||
Period of recognition | 1 year 9 months 20 days | |||||||
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 |
Stock Incentive Plan - Schedule
Stock Incentive Plan - Schedule of Assumptions Used (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PSs and RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 0.00% | 0.00% | 2.20% |
Stock Incentive Plan - Summary
Stock Incentive Plan - Summary of Restricted Share Activity (Details) - RSUs shares in Millions | 6 Months Ended |
Dec. 31, 2018shares | |
RSUs | |
Outstanding at beginning of year (in shares) | 601,740 |
Granted (in shares) | 9,380 |
Shares issued (in shares) | (7,490) |
Cancelled/Forfeited/Expired (in shares) | (9,636) |
Outstanding at end of year (in shares) | 593,994 |
Stock Incentive Plan - Summar_2
Stock Incentive Plan - Summary of Stock Options Activity (Details) | 6 Months Ended |
Dec. 31, 2018shares | |
SOs | |
Outstanding at December 31, 2017 (in shares) | 355,646,000,000 |
Exercised (in shares) | (30,062,000,000) |
Cancelled/Forfeited/Expired (in shares) | 0 |
Outstanding at December 31, 2018 (in shares) | 325,584,000,000 |
Stock Incentive Plan - Summar_3
Stock Incentive Plan - Summary of Stock Options Activity By Exercise Price Range (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number Outstanding (in shares) | 325,584 |
Remaining Contract life (in years) | 4 years 7 months 6 days |
4.93 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 4.93 |
Number Outstanding (in shares) | 16,796 |
Remaining Contract life (in years) | 1 month 21 days |
13.51 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 13.51 |
Number Outstanding (in shares) | 21,342 |
Remaining Contract life (in years) | 1 year 1 month 17 days |
20.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 20.25 |
Number Outstanding (in shares) | 21,266 |
Remaining Contract life (in years) | 3 years 1 month 24 days |
20.91 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 20.91 |
Number Outstanding (in shares) | 43,934 |
Remaining Contract life (in years) | 4 years 1 month 21 days |
22.04 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 22.04 |
Number Outstanding (in shares) | 15,055 |
Remaining Contract life (in years) | 2 years 1 month 24 days |
28.67 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 28.67 |
Number Outstanding (in shares) | 80,627 |
Remaining Contract life (in years) | 5 years 1 month 21 days |
34.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price | $ / shares | $ 34.25 |
Number Outstanding (in shares) | 126,564 |
Remaining Contract life (in years) | 6 years 1 month 17 days |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Change in Product Related Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Product Warranty Accrual | ||
Reserve at beginning of the year | $ 22 | $ 30 |
Change in reserve | 10 | 8 |
Cash settlements | (15) | (16) |
Transfers | (1) | 0 |
Translation difference | 0 | 1 |
Reserve at end of the year | $ 16 | $ 22 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||
Other current assets | $ 22 | $ 0 | |
Guarantees | 8 | 8 | |
Rent expense | 13 | $ 7 | $ 6 |
Operating Leases | |||
Future minimum lease payment due, total | 88 | ||
2,019 | 17 | ||
2,020 | 14 | ||
2,021 | 10 | ||
2,022 | 7 | ||
2,023 | 5 | ||
Thereafter | 34 | ||
Capital Leases | |||
Future minimum payments due | 15 | ||
2,019 | 1 | ||
2,020 | 1 | ||
2,021 | 12 | ||
2,022 | 0 | ||
2,023 | 0 | ||
Thereafter | 1 | ||
Unconditional Purchase Obligations | |||
Unconditional purchase obligation to be paid in 2019 | 10 | ||
Indemnification Asset | |||
Loss Contingencies [Line Items] | |||
Other current assets | 14 | ||
Built-To-Suit Lease | |||
Operating Leases | |||
Future minimum lease payment due, total | 51 | ||
2,019 | 3 | ||
2,020 | 3 | ||
2,021 | 3 | ||
2,022 | 3 | ||
2,023 | 3 | ||
Thereafter | $ 36 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic and diluted: | |||||||||||
Net loss attributable to common shareholders | $ (114,000,000) | $ (68,000,000) | $ (63,000,000) | $ (32) | $ (136,000,000) | $ (33,000,000) | $ (28,000,000) | $ (20,000,000) | $ (276,000,000) | $ (217,000,000) | $ (53,000,000) |
Basic: Weighted average number of shares outstanding (in millions) (in shares) | 87,160,000 | 87,130,000 | 87,130,000 | ||||||||
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,160,000 | 87,130,000 | 87,130,000 | ||||||||
Basic loss per share (in dollars per share) | $ (1.31) | $ (0.78) | $ (0.72) | $ (0.36) | $ (1.56) | $ (0.38) | $ (0.32) | $ 0 | $ (3.17) | $ (2.49) | $ (0.61) |
Diluted loss per share (in dollars per share) | $ (1.31) | $ (0.78) | $ (0.72) | $ (0.36) | $ (1.56) | $ (0.38) | $ (0.32) | $ 0 | $ (3.17) | $ (2.49) | $ (0.61) |
Anti-dilutive shares excluded from loss per shares (in shares) | 446,821 | 0 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||
Number of operating segments | segment | 2 | ||
Long-lived assets | $ 1,113 | $ 938 | |
Customer A | Customer Concentration Risk | Sales Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 21.00% | 21.00% | 17.00% |
Customer B | Customer Concentration Risk | Sales Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 17.00% | 17.00% | 16.00% |
Customer C | Customer Concentration Risk | Sales Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 12.00% | 13.00% |
Customer D | Customer Concentration Risk | Sales Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | 13.00% | |
Customer E | Customer Concentration Risk | Sales Revenue | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
U.S. | |||
Concentration Risk [Line Items] | |||
Long-lived assets | $ 315 | $ 349 | |
Intangible assets and goodwill | $ 117 | $ 285 |
Segment Information - Schedule
Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
(Loss)/Income Before Income Taxes | $ (75,000,000) | $ (58,000,000) | $ (48,000,000) | $ (16) | $ (244,000,000) | $ (16,000,000) | $ (12,000,000) | $ (10,000,000) | $ (197,000,000) | $ (283,000,000) | $ (25,000,000) |
Interest and other non-operating items, net | 7,000,000 | (1,000,000) | 3,000,000 | ||||||||
Loss from equity method investment | (63,000,000) | (31,000,000) | 0 | ||||||||
Loss before income taxes | (90,000,000) | $ (70,000,000) | $ (63,000,000) | $ (30) | (258,000,000) | $ (26,000,000) | $ (19,000,000) | $ (11,000,000) | (253,000,000) | (314,000,000) | (22,000,000) |
Capital Expenditures | 188,000,000 | 110,000,000 | 103,000,000 | ||||||||
Depreciation and Amortization | 111,000,000 | 119,000,000 | 106,000,000 | ||||||||
Segment Assets | 2,632,000,000 | 1,663,000,000 | 2,632,000,000 | 1,663,000,000 | |||||||
Operating Segments | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
(Loss)/Income Before Income Taxes | (146,000,000) | (261,000,000) | (1,000,000) | ||||||||
Intersegment Eliminations | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Segment Assets | (204,000,000) | 0 | (204,000,000) | 0 | |||||||
Corporate and other | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
(Loss)/Income Before Income Taxes | (51,000,000) | (22,000,000) | (24,000,000) | ||||||||
Electronics | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Capital Expenditures | 132,000,000 | 79,000,000 | 80,000,000 | ||||||||
Depreciation and Amortization | 72,000,000 | 80,000,000 | 70,000,000 | ||||||||
Electronics | Operating Segments | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
(Loss)/Income Before Income Taxes | (116,000,000) | (14,000,000) | 11,000,000 | ||||||||
Segment Assets | 2,329,000,000 | 1,286,000,000 | 2,329,000,000 | 1,286,000,000 | |||||||
Brake Systems | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Capital Expenditures | 56,000,000 | 31,000,000 | 23,000,000 | ||||||||
Depreciation and Amortization | 38,000,000 | 39,000,000 | 36,000,000 | ||||||||
Brake Systems | Operating Segments | |||||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
(Loss)/Income Before Income Taxes | (30,000,000) | (247,000,000) | $ (12,000,000) | ||||||||
Segment Assets | $ 507,000,000 | $ 377,000,000 | $ 507,000,000 | $ 377,000,000 |
Segment Information - Schedul_2
Segment Information - Schedule of Long-lived Assets by Region (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Long-lived Assets | $ 1,113 | $ 938 |
Asia | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | 307 | 302 |
Americas | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | 368 | 393 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | 438 | 242 |
U.S. | ||
Segment Reporting Information [Line Items] | ||
Long-lived Assets | $ 315 | $ 349 |
Relationship with Former Pare_3
Relationship with Former Parent and Related Entities - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 29, 2018 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||||
Related party purchases | $ 22,000,000 | $ 25,000,000 | $ 29,000,000 | |||
True up adjustment to related party payable in connection with the Spin-Off | $ 3,000,000 | |||||
Deferred tax | $ 8,000,000 | |||||
Cash and cash equivalents | 864,000,000 | 0 | 0 | $ 1,000,000,000 | $ 0 | |
Affiliated Entity | Autoliv Nissin Brakes Systems | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses, related party | 7,000,000 | 0 | 0 | |||
Affiliated Entity | Autoliv | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 121,000,000 | 148,000,000 | 120,000,000 | |||
Affiliated Entity | Autoliv | Engineering Services | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 1,000,000 | 1,000,000 | $ 1,000,000 | |||
Veoneer Nissin Brakes Systems | ||||||
Related Party Transaction [Line Items] | ||||||
Capital lease arrangement | $ 13,000,000 | $ 11,000,000 | ||||
Veoneer Nissin Brakes Systems | ||||||
Related Party Transaction [Line Items] | ||||||
Majority ownership percentage | 51.00% | |||||
Nissin Kogyo | ||||||
Related Party Transaction [Line Items] | ||||||
Minority ownership percentage | 49.00% |
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 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transactions [Abstract] | ||
Related party receivable | $ 64 | $ 13 |
Related party notes receivable | 1 | 76 |
Related party payables | 16 | 8 |
Related party short-term debt | 1 | 0 |
Related party long-term debt | $ 13 | $ 62 |
Summary Quarterly Financial D_3
Summary Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Data (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 535,000,000 | $ 526,000,000 | $ 572,000,000 | $ 594 | $ 593,000,000 | $ 567,000,000 | $ 579,000,000 | $ 583,000,000 | $ 2,228,000,000 | $ 2,322,000,000 | $ 2,218,000,000 |
Gross profit | 109,000,000 | 99,000,000 | 112,000,000 | 112 | 124,000,000 | 109,000,000 | 120,000,000 | 113,000,000 | 430,000,000 | 466,000,000 | 423,000,000 |
Operating loss | (75,000,000) | (58,000,000) | (48,000,000) | (16) | (244,000,000) | (16,000,000) | (12,000,000) | (10,000,000) | (197,000,000) | (283,000,000) | (25,000,000) |
Loss before income taxes | (90,000,000) | (70,000,000) | (63,000,000) | (30) | (258,000,000) | (26,000,000) | (19,000,000) | (11,000,000) | (253,000,000) | (314,000,000) | (22,000,000) |
Net loss | (119,000,000) | (72,000,000) | (66,000,000) | (37) | (256,000,000) | (36,000,000) | (30,000,000) | (22,000,000) | (294,000,000) | (344,000,000) | (60,000,000) |
Net loss attributable to common shareholders | $ (114,000,000) | $ (68,000,000) | $ (63,000,000) | $ (32) | $ (136,000,000) | $ (33,000,000) | $ (28,000,000) | $ (20,000,000) | $ (276,000,000) | $ (217,000,000) | $ (53,000,000) |
Per Share Data: | |||||||||||
Basic loss per share (in dollars per share) | $ (1.31) | $ (0.78) | $ (0.72) | $ (0.36) | $ (1.56) | $ (0.38) | $ (0.32) | $ 0 | $ (3.17) | $ (2.49) | $ (0.61) |
Diluted loss per share (in dollars per share) | $ (1.31) | $ (0.78) | $ (0.72) | $ (0.36) | $ (1.56) | $ (0.38) | $ (0.32) | $ 0 | $ (3.17) | $ (2.49) | $ (0.61) |
Impairment charge to amortization of intangible assets | $ 12,000,000 | ||||||||||
Goodwill [Line Items] | |||||||||||
Goodwill, impairment charge | $ 0 | $ 234,000,000 | $ 0 | ||||||||
Fair value of earn out liability | $ 14,000,000 | 14,000,000 | |||||||||
Other operating income from earn out liability adjustment | 13,000,000 | ||||||||||
Brake Systems | |||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 428,000,000 | 473,000,000 | $ 383,000,000 | ||||||||
Goodwill [Line Items] | |||||||||||
Goodwill, impairment charge | $ 234,000,000 | $ 234,000,000 |