Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 22, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VNE | |
Entity Registrant Name | Veoneer, Inc. | |
Entity Central Index Key | 0001733186 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 87,347,940 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 494 | $ 594 |
Cost of sales | (409) | (483) |
Gross profit | 85 | 112 |
Selling, general and administrative expenses | (52) | (31) |
Research, development and engineering expenses, net | (156) | (106) |
Amortization of intangibles | (5) | (5) |
Other income, net | 0 | 15 |
Operating loss | (128) | (16) |
Loss from equity method investment | (17) | (14) |
Interest income | 3 | 0 |
Loss before income taxes | (142) | (30) |
Income tax expense | (6) | (7) |
Net loss | (148) | (37) |
Less: Net loss attributable to non-controlling interest | (11) | (5) |
Net loss attributable to controlling interest | $ (137) | $ (32) |
Net loss per share - basic (in dollars per share) | $ (1.57) | $ (0.36) |
Net loss per share - diluted (in dollars per share) | $ (1.57) | $ (0.36) |
Weighted average number of shares outstanding, (in millions) (in shares) | 87,240 | 87,130 |
Weighted average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,240 | 87,130 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (148) | $ (37) |
Other comprehensive income (loss), before tax: | ||
Change in cumulative translation adjustment | (11) | 11 |
Other comprehensive income (loss), before tax | (11) | 11 |
Expense for taxes | 0 | 0 |
Other comprehensive income (loss), net of tax | (11) | 11 |
Comprehensive loss | (159) | (26) |
Less: Comprehensive loss attributable to non-controlling interest | (11) | (2) |
Comprehensive loss attributable to controlling interest | $ (148) | $ (24) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 715 | $ 864 |
Short-term investments | 0 | 5 |
Receivables, net | 364 | 376 |
Inventories, net | 170 | 172 |
Related party receivables | 43 | 64 |
Prepaid expenses | 39 | 39 |
Other current assets | 21 | 22 |
Total current assets | 1,352 | 1,543 |
Property, plant and equipment, net | 521 | 499 |
Operating lease right-of-use assets | 70 | 0 |
Equity method investment | 81 | 101 |
Goodwill | 290 | 291 |
Intangible assets, net | 96 | 102 |
Deferred tax assets | 10 | 11 |
Related party notes receivables | 0 | 1 |
Investments | 8 | 8 |
Other non-current assets | 91 | 77 |
Total assets | 2,519 | 2,632 |
Liabilities and equity | ||
Accounts payable | 307 | 369 |
Related party payables | 4 | 16 |
Accrued expenses | 214 | 193 |
Income tax payable | 7 | 9 |
Related party short-term debt | 2 | 1 |
Other current liabilities | 59 | 47 |
Total current liabilities | 593 | 636 |
Related party long-term debt | 13 | 13 |
Pension liability | 20 | 20 |
Deferred tax liabilities | 14 | 13 |
Operating lease non-current liabilities | 53 | 0 |
Finance lease non-current liabilities | 33 | 1 |
Other non-current liabilities | 25 | 24 |
Total non-current liabilities | 158 | 70 |
Commitments and contingencies | ||
Equity | ||
Common stock (par value $1.00, 325 million shares authorized, 87 million shares issued and outstanding as of March 31, 2019 and December 31, 2018) | 87 | 87 |
Additional paid-in capital | 1,939 | 1,938 |
Accumulated deficit | (318) | (181) |
Accumulated other comprehensive loss | (30) | (19) |
Total equity | 1,678 | 1,826 |
Non-controlling interest | 90 | 101 |
Total equity and non-controlling interest | 1,768 | 1,927 |
Total liabilities, equity and non-controlling interest | $ 2,519 | $ 2,632 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Par Value (in dollars per share) | $ 1 | $ 1 |
Shares Authorized (in shares) | 325,000,000 | 325,000,000 |
Shares Issued (in shares) | 87,000,000 | 87,000,000 |
Shares Outstanding (in shares) | 87,000,000 | 87,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid In Capital | Net Former Parent Investment | Accumulated deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2017 | $ 957 | $ 844 | $ (8) | $ 122 | |||
Comprehensive Income (Loss): | |||||||
Net loss | (37) | (32) | (5) | ||||
Foreign currency translation | 11 | 8 | 3 | ||||
Total Comprehensive Income (Loss) | (26) | (32) | 9 | (2) | |||
Net transfers from Former Parent | 107 | 105 | 1 | ||||
Balance at end of period at Mar. 31, 2018 | 1,038 | $ 917 | 0 | 121 | |||
Balance at beginning of period at Dec. 31, 2018 | 1,927 | $ 87 | $ 1,938 | $ (181) | (19) | 101 | |
Comprehensive Income (Loss): | |||||||
Net loss | (148) | (137) | (11) | ||||
Foreign currency translation | (11) | (11) | |||||
Stock based compensation expense | 1 | 1 | |||||
Total Comprehensive Income (Loss) | (158) | 0 | 1 | (137) | (11) | (11) | |
Balance at end of period at Mar. 31, 2019 | $ 1,768 | $ 87 | $ 1,939 | $ (318) | $ (30) | $ 90 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities | ||
Net loss | $ (148) | $ (37) |
Depreciation and amortization | 29 | 28 |
Undistributed loss from equity method investments | 17 | 14 |
Stock-based compensation | 0 | 1 |
Contingent consideration write-down | 0 | (14) |
Deferred income taxes | 3 | (1) |
Other, net | 7 | (8) |
Change in operating assets and liabilities: | ||
Accounts payable | (33) | 0 |
Related party receivables and payables, net | 7 | 1 |
Income taxes | (2) | 1 |
Accrued expenses | 22 | 0 |
Other current assets and liabilities, net | 10 | 0 |
Receivables, gross | 7 | (62) |
Inventories, gross | (3) | (1) |
Prepaid expenses | (6) | 0 |
Net cash used in operating activities | (90) | (79) |
Investing activities | ||
Net decrease in related party notes receivable | 0 | 76 |
Capital expenditures | (59) | (31) |
Equity method investment | 0 | (71) |
Short-term investments mature into cash | 5 | 0 |
Proceeds from sale of property, plant and equipment | 0 | 2 |
Net cash used in investing activities | (54) | (25) |
Financing activities | ||
Net transfers from Former Parent | 0 | 107 |
Net increase in related party short-term debt | 1 | 23 |
Net increase in debt | 1 | 0 |
Decrease in related party long-term debt | 0 | (26) |
Net cash provided by financing activities | 2 | 104 |
Effect of exchange rate changes on cash and cash equivalents | (7) | 0 |
Decrease in cash and cash equivalents | (149) | 0 |
Cash and cash equivalents at beginning of period | 864 | 0 |
Cash and cash equivalents at end of period | $ 715 | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
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. 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 Nasdaq Stockholm under the symbol “VNE-SDB”. Agreements entered into between Veoneer and Autoliv in connection with the Spin-Off govern the relationship between the parties following the Spin-Off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided on a temporary basis between the parties. In advance of the Spin-Off, Autoliv completed a series of internal transactions, in which Autoliv transferred its Electronics business to Veoneer. These transactions are referred to herein as the “internal reorganization”. The internal reorganization was completed on April 1, 2018. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provides brake control and actuation systems. The accompanying unaudited condensed consolidated financial statements for the period ended March 31, 2018 have been prepared from Autoliv’s historical accounting records and are presented on a stand-alone basis as if the operations had been conducted independently from Autoliv. Prior to the Spin-Off, Autoliv’s net investment in these operations (Former Parent equity) is shown in lieu of a controlling interest’s equity in the unaudited condensed consolidated financial statements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) were reflected in Retained earnings (Accumulated deficit). For periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Condensed Consolidated Financial Statements"). The unaudited condensed consolidated financial statements include the historical operations, assets, and liabilities that were considered to comprise the Veoneer business. All of the allocations and estimates in the unaudited condensed consolidated financial statements are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of Veoneer included herein may not be indicative of what they would have been had Veoneer actually been a stand-alone entity during such periods, nor are they necessarily indicative of Veoneer's future results. The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2018 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. New Accounting Standards Adoption of New Accounting Standards 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. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019, as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, and has not made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, have allowed the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of approximately $75 million as of January 1, 2019. The adoption of the new lease standard did not have a material impact on the Company's Condensed Consolidated Statements of Operations or Statements of Cash Flows. Balance Sheet (Dollars in millions) Balance at December 31, 2018 Adjustments due to ASU 2016-02 Balance at January 1, 2019 Assets Right-of-use assets, operating leases $ — $ 75 $ 75 Current liabilities Other current liabilities — 16 16 Non-current liabilities Operating lease liabilities - non-current — 57 57 Equity Accumulated deficit (181 ) — (181 ) In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. 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 the Condensed Consolidated Financial Statements. 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 the Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on the Condensed Consolidated Financial Statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region (Dollars in millions) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 89 $ 72 $ 161 $ 112 $ 99 $ 211 Americas 154 15 169 179 14 193 Europe 164 — 164 190 — 190 Total $ 407 $ 87 $ 494 $ 481 $ 114 $ 594 Net Sales by Products (Dollars in millions) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 215 $ — $ 215 $ 268 $ — $ 268 Active Safety products 192 — 192 213 — 213 Brake Systems — 87 87 — 114 114 Total net sales $ 407 $ 87 $ 494 $ 481 $ 114 $ 594 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 1 month to 5 year(s). As of March 31, 2019, assets recorded under finance leases were $48 million , and accumulated depreciation associated with finance leases was $2 million . The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The components of lease expense for the three months ended were as follows: (in millions) March 31, 2019 Operating lease cost $ 5 Finance lease cost Amortization of right-of-use assets 1 Interest on lease liabilities — Total finance lease cost 1 Short-term lease cost — Variable lease cost — Total lease cost $ 6 Other information related to leases for the three months ended was as follows: (in millions, except lease term and discount rate) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 4 Operating cash flows used for finance leases — Financing cash flows used for finance leases — Right-of-use assets obtained in exchange for new lease obligations: Operating leases 4 Finance leases 33 Weighted-average remaining lease term Operating Leases 7 Finance Leases 12 Weighted-average discount rate Operating leases 4.1 % Finance leases 4.9 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 13 $ 2 2020 15 3 2021 12 14 2022 10 3 2023 8 3 Thereafter 24 38 Total lease payments 82 63 Less imputed interest 13 18 Total lease liabilities $ 69 $ 45 Leases obligations reported as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases Other current liabilities $ 13 $ 1 Lease liabilities - non current 53 33 Total lease liabilities $ 66 $ 34 As of March 31, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $39 million . These operating leases will commence during 2019 with lease terms of 2 years to 15 years . |
Leases | Leases The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years , some of which include options to extend the leases for up to 10 years , and some of which include options to terminate the leases within 1 month to 5 year(s). As of March 31, 2019, assets recorded under finance leases were $48 million , and accumulated depreciation associated with finance leases was $2 million . The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The components of lease expense for the three months ended were as follows: (in millions) March 31, 2019 Operating lease cost $ 5 Finance lease cost Amortization of right-of-use assets 1 Interest on lease liabilities — Total finance lease cost 1 Short-term lease cost — Variable lease cost — Total lease cost $ 6 Other information related to leases for the three months ended was as follows: (in millions, except lease term and discount rate) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 4 Operating cash flows used for finance leases — Financing cash flows used for finance leases — Right-of-use assets obtained in exchange for new lease obligations: Operating leases 4 Finance leases 33 Weighted-average remaining lease term Operating Leases 7 Finance Leases 12 Weighted-average discount rate Operating leases 4.1 % Finance leases 4.9 % Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 13 $ 2 2020 15 3 2021 12 14 2022 10 3 2023 8 3 Thereafter 24 38 Total lease payments 82 63 Less imputed interest 13 18 Total lease liabilities $ 69 $ 45 Leases obligations reported as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases Other current liabilities $ 13 $ 1 Lease liabilities - non current 53 33 Total lease liabilities $ 66 $ 34 As of March 31, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $39 million . These operating leases will commence during 2019 with lease terms of 2 years to 15 years . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying debt and no swaps have a maturity beyond six months . All derivatives are recognized in the unaudited condensed consolidated financial statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates. The Company’s derivatives are classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods. During the first quarter of 2018, forward contracts designated as cash flow hedges of certain external purchasing were terminated. The loss associated with such termination was not material. Financial Statement Presentation The Company enters into master netting agreements, International Swaps and Derivatives Association (ISDA) agreements with all derivative counterparties. The netting agreements allow for netting of exposures in the event of default or breach of the counterparty agreement. The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheets. The notional value of the derivatives not designated as hedging instruments was $98 million as of March 31, 2019 and $103 million as of December 31, 2018, respectively. As of March 31, 2019 and December 31, 2018, the liability of the derivatives not designated as hedging instruments was less than $1 million . For the three months ended March 31, 2019 and 2018, the gains and losses on derivative financial instruments recognized in the Unaudited Condensed Consolidated Statements of Operations were less then $1 million and $1 million , respectively. Contingent consideration - The fair value of the contingent consideration related to the M/A-COM acquisition on August 17, 2015 is re-measured on a recurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. The Company adjusted the fair value of the earn-out liability to $14 million in the first quarter of 2017 based on actual revenue levels to date as well as changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period. Income of approximately $13 million was recognized within Other income in the Unaudited Condensed Consolidated Statements of Operations in the first quarter of 2017 due to the decrease in the contingent consideration liability. The remaining fair value of the earn-out liability of $14 million as of December 31, 2017 was fully released and recognized within Other income in the first quarter of 2018, driven by changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period such that management no longer believes that there are any scenarios under which the earn-out criteria could be met. Management has updated its analysis as of March 31, 2019 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. No such non-recurring measurements were made during the period ended March 31, 2019. 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 March 31, 2019 and December 31, 2018, Veoneer contributed approximately $8 million to the investment in Autotech Fund I, L.P. The carrying amounts reflected in the Condensed Consolidated Balance Sheet in Investments for the Autotech Fund I, L.P approximates its fair values. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision for the three month periods ended March 31, 2019 and 2018 was $6 million and $7 million , respectively. Discrete items, net were expense of $3 million and less than $1 million for the periods ended March 31, 2019 and 2018, respectively. Veoneer's effective tax rate differs from an expected statutory rate primarily due to losses in certain jurisdictions that are not benefited. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has completed its accounting for the effects of the Act on the Company’s deferred tax balances as of the enactment date. Pursuant to the Tax Matters Agreement entered into with Autoliv in connection with the Spin-Off, Autoliv is the primary obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the Company is not liable for any transition taxes under the Act. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. Valuation allowances have been established for the Company’s United States, Swedish, French, Japanese operations, certain Chinese operations and the Company’s joint venture in Japan. The Company has reserves for income taxes that represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. Any income tax liabilities resulting from operations prior to April 1, 2018, are assumed to be settled with Former Parent on the last day Veoneer was part of the Autoliv group and were relieved through the Net Former Parent investment. There were no material changes to the Company’s uncertain tax positions as of March 31, 2019. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. Under local tax law, a Veoneer entity may have been required to file its income tax returns combined with an Autoliv entity up to and including the date of the Spin-Off. Subsequent to the Spin-Off, Veoneer will file its income tax returns on a stand-alone basis. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost (principally on a first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of March 31, 2019 December 31, 2018 Raw materials $ 118 $ 108 Work in progress 11 15 Finished products 64 71 Inventories $ 193 $ 194 Inventory valuation reserve (23 ) (23 ) Total inventories, net of reserve $ 170 $ 172 |
Equity Method Investment
Equity Method Investment | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment As of March 31, 2019, the Company has one equity method investment in Zenuity a 50% joint venture ownership with Volvo cars. At the end of the first quarter of 2018, Veoneer contributed SEK 600 million (approximately $71 million ) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs. The profit and loss attributed to the investment is shown in the line item Loss from equity method investment in the Unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the three months ended March 31, 2019 and 2018 was $17 million and $14 million , respectively. As of March 31, 2019 and December 31, 2018, the Company’s equity investment in Zenuity amounted to $81 million and $101 million , respectively, after consideration of foreign exchange movements. Certain Unaudited Summarized Income Statement information of Zenuity, for the three months ended March 31, 2019 and 2018, is shown below: Three Months Ended March 31 2019 2018 Net sales $ — $ 1 Gross profit — — Operating loss (34 ) (28 ) Loss before income taxes (34 ) (28 ) Net loss $ (34 ) $ (28 ) |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As of March 31, 2019 December 31, 2018 Operating related accruals $ 63 $ 55 Employee related accruals 71 66 Customer pricing accruals 44 39 Product related liabilities 1 14 16 Other accruals 22 18 Total Accrued Expenses $ 214 $ 193 1 As of March 31, 2019 and December 31, 2018 was $11 million and $14 million , respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2019 | |
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 comprised of plans in Japan, Canada, and France, Transferred Veoneer Plans comprised of plans in Germany, India, Japan, and South Korea, and Autoliv Sponsored Plans comprised of plans in Sweden and the U.S. Existing Veoneer Plans The defined benefit pension plans for eligible participants in Japan, Canada, and France prior to the Spin-Off continue to provide pension retirement benefits to the Company’s employees subsequent to the Spin-Off. The Company’s net periodic benefit costs for the Existing Veoneer Plans for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31 2019 2018 Service cost $ 1 $ 1 Interest cost — — Expected return on plan assets (1 ) (1 ) Net periodic benefit cost $ — $ 1 The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) were not material in the Unaudited Condensed Consolidated Statements of Operations. Transferred Veoneer Plans Prior to the plan transfers to Veoneer legal entities on April 1, 2018, eligible Veoneer employees participated in the following Autoliv-sponsored plans: Country Name of Defined Benefit Plans Germany Direct Pension Promises Plan India Gratuity Plan Japan Retirement Allowances Plan Defined Benefit Corporate Plan South Korea Severance Pay Plan (statutory plan) Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan The allocated net periodic benefit costs related to transferred plans from Autoliv to Veoneer were less than $1 million for the three months ended March 31, 2018. Autoliv Sponsored Plans Prior to certain legal decisions or plan amendments, Veoneer employees in Sweden and in the U.S. participated in the following Autoliv-sponsored multiemployer plans: Country Name of Defined Benefit Plans Sweden ITP plan U.S. Autoliv ASP, Inc. Pension Plan Autoliv ASP, Inc. Excess Pension Plan Autoliv ASP, Inc. Supplemental Pension Plan On April 1, 2018, it was determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the Sweden plan for all Veoneer employees included in the Sweden plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The allocation to capture the Company’s specific defined benefit plans expense and contributions prior to the plans amendment for the three months ended March 31, 2018 were less than $1 million . Subsequent to the Spin-Off, Veoneer will be responsible for costs of the Company's eligible employees who participate in the Sweden multiemployer plan. 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. |
Stock Incentive Plan
Stock Incentive Plan | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan | Stock Incentive Plan The Veoneer, Inc. 2018 Stock Incentive Plan was established and effective on June 29, 2018 to govern the Company’s stock-based awards that will be granted in the future. The Veoneer, Inc. 2018 Stock Incentive Plan authorizes the grant of 3 million shares of Veoneer common stock for future equity awards to Veoneer employees and non-employee directors and authorizes up to 1.7 million additional shares to be used for the conversion of outstanding Autoliv stock awards in connection with the Spin-Off. Approximately 1 million shares were used for the conversion of the outstanding grants. In February and March 2019, under the Company’s long-term incentive (LTI) program, certain employees received restricted stock units (RSUs) without dividend equivalent rights and performance shares (PSs) without dividend equivalent rights. The allocation between RSUs and PSs for the grants made in February and March was 131,871 RSUs and 121,564 PSs at 100% target . The RSUs were granted on February 19, 2019 and March 1, 2019 and will vest on the second or third anniversary of the grant date, subject to the grantee’s continued employment with the Company on the vesting date and acceleration of vesting in certain circumstances. The fair value of RSUs and PSs granted in 2019 were calculated by using the closing stock price on the grant dates. The grant date fair value for the RSUs and PSs granted on February 19, 2019 and March 1, 2019 was $4 million and $1 million , respectively. The PSs were granted on February 19, 2019 and March 1, 2019 and will earn out during the first quarter of 2022, upon the Compensation Committee’s certification of achievement of the applicable performance goals. The grantee may earn 0% - 200% of the target number of PSs based on the Company’s achievement of specified targets. The performance target is the Company’s gross margin for the applicable performance period. Each PS represents a promise to transfer a share of the Company’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions. Certain eligible Veoneer employees participate in the Autoliv, Inc. 1997 Stock Incentive Plan (the Plan) sponsored by the Former Parent. Under the Former Parent’s Plan, employees receive 50% of their long-term incentive (LTI) grant value in the form of performance shares (PSs) and 50% in the form of restricted stock units (RSUs) commencing with grants in February 2016. Prior to this, stock options and RSUs were issued. The source of the shares issued upon vesting of awards is generally from Autoliv treasury shares. The grantee may earn 0 - 200% of the target number of PSs based on achievement of specified targets for Former Parent’s compound annual growth rate (CAGR) for sales and Former Parent’s CAGR in earnings per share relative to an established benchmark growth rate. Each performance target is weighted 50% and results are measured at the end of the three -year performance period. Each PS represents a promise to transfer a share of the Former Parent’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions. In February 2018, under the Former Parent’s LTI program, certain Veoneer employees received RSUs with dividend rights. The RSUs were granted on February 18, 2018 and will vest on the third anniversary of the grant date. The fair value of RSUs granted in 2018 is calculated by using the closing stock price on the grant date. The fair value for the RSUs granted on February 18, 2018 was $6 million . Veoneer recognized total stock (RSUs PSs and SOs) compensation cost of $1 million , in the Unaudited Condensed Consolidated Statements of Operations, for three months ended March 31, 2019 and March 31, 2018. |
Contingent Liabilities
Contingent Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Loss Contingency [Abstract] | |
Contingent Liabilities | Contingent Liabilities Legal Proceedings Various claims, lawsuits and proceedings are pending or threatened against the Company, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the condensed 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. The software used in a limited number of units of one of the Company’s product types sold to a single OEM for a specific installation configuration exhibited a processing error once installed. The Company has since remediated the issue for future deliveries. Pursuant to ASC 450 under U.S. GAAP, as of March 31, 2019 the Company believes a loss with respect to this issue is reasonably possible if the customer determines it is necessary to upgrade some or all of the potentially affected products in the field. While the Company has no indication of such intent from the customer, the estimated potential loss is approximately $2 million . 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 records liabilities for product related risks when probable claims are identified and when it is possible to reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performance of newer products, and volume of the products sold. The provisions are recorded on an accrual basis. The table below summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets. Three Months Ended March 31 2019 2018 Reserve at beginning of the period $ 16 $ 22 Change in reserve (1 ) 7 Cash payments (2 ) (6 ) Reserve at end of the period $ 14 $ 23 For the three months ended March 31, 2019 and 2018, provisions and cash paid primarily relate to recall and warranty related issues. The decrease in the reserve balance as of March 31, 2019 compared to the prior year was mainly due to a recall related settlement and 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 March 31, 2019 the indemnification asset of $11 million included in the Other current assets offsets substantially all of the product related liabilities. A substantial portion of these costs are subject to indemnification by Autoliv. Guarantees The Company provided lease guarantees to Zenuity of $8 million as of March 31, 2019 and December 31, 2018. 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. |
Loss per share
Loss per share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss per share | Loss per share Basic loss per share is computed by dividing net loss for the period by the weighted average number of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted loss per share by application of the treasury stock method. The calculation of diluted loss per share excludes all anti-dilutive common stock. The following table sets forth the computation of basic and diluted loss per share for the three months ended March 31, 2019 and 2018. (U.S. dollars in millions, except per share amounts) Three Months Ended March 31 2019 2018 Numerator: Basic and diluted: Net loss attributable to Veoneer $ (137 ) $ (32 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.24 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.24 87.13 Basic loss per share (1.57) (0.36) Diluted loss per share (1.57) (0.36) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. In periods when the Company has a net loss, equity incentive awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The Company excluded equity incentive awards of 321,619 for the three months ended March 31, 2019 and zero as of March 31, 2018. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
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, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The operating results of the operating segments are regularly reviewed by the Company’s CODM, the Chief Executive Officer, to assess the performance of the individual operating segments and to 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 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. Three Months Ended March 31 (Loss) Before Income Taxes 2019 2018 Electronics $ (90 ) $ (1 ) Brake Systems (19 ) (8 ) Segment operating (loss)/income (109 ) (9 ) Corporate and other (19 ) (7 ) Interest and other non-operating items, net 3 — Loss from equity method investment (17 ) (14 ) Loss before income taxes $ (142 ) $ (30 ) |
Relationship with Former Parent
Relationship with Former Parent and Related Entities | 3 Months Ended |
Mar. 31, 2019 | |
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 unaudited condensed consolidated financial statements. Veoneer management considers the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Autoliv attributable to Veoneer for purposes of the stand-alone financial statements; however, the expenses reflected in the unaudited condensed consolidated financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the unaudited condensed consolidated financial statements may not be indicative of expenses that will be incurred in the future by Veoneer. Prior to the Spin-Off, transactions between Autoliv and Veoneer, with the exception of sales and purchase transactions and reimbursements for payments made to third-party service providers by Autoliv on Veoneer’s behalf, are reflected in the Unaudited Condensed 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 three months ended March 31, 2019, Veoneer recognized $1 million of expenses under the TSA, and there were no costs for the three months ended March 31, 2018. For the three months ended March 31, 2019, Veoneer recognized less than $1 million of income under the TSA, and there were no income for the three months ended March 31, 2018. Throughout the periods covered by the unaudited condensed consolidated financial statements, Veoneer sold finished goods to Autoliv and Nissin Kogyo, the 49% owner in VNBS (a 51% owned subsidiary). Related party sales amount to $26 million and $41 million for the three months ended March 31, 2019 and 2018, respectively. Related Party Balances Amounts due to and due from related parties are summarized in the below table: As of Related Party March 31, 2019 December 31, 2018 Related party receivable $ 43 $ 64 Related party notes receivable — 1 Related party payables 4 16 Related party short-term debt 2 1 Related party long-term debt 13 13 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 March 31, 2019, all related party long-term debt agreements were settled or terminated, with the exception of a capital lease arrangement at VNBS of $12 million and $13 million as of March 31, 2019 and December 31, 2018, respectively. The finance lease is with Nissin Kogyo, the 49% owner of VNBS. Corporate Costs/Allocations For the periods prior to April 1, 2018, the unaudited condensed 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 unaudited condensed consolidated financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. All corporate charges and allocations have been deemed paid by Veoneer to Autoliv in the period in which the cost was recorded in the Unaudited Condensed Consolidated Statements of Operations. Effective April 1, 2018, Veoneer began performing certain functions using internal resources or third parties, and certain other services continued to be provided by Autoliv and directly charged to Veoneer. In addition, Veoneer personnel perform certain services for Autoliv, which are directly charged to Autoliv. Allocated corporate costs included in Costs of sales, Selling, general and administrative expenses and Research, development and engineering expenses were for shared services and infrastructure provided, which includes costs such as information technology, accounting, legal, real estate and facilities, corporate advertising, risk and insurance services, treasury, shareholder services and other corporate and infrastructure services. Cash Management and Financing Prior to the Spin-Off, Veoneer participated in Autoliv’s centralized cash management and financing programs. Disbursements were made through centralized accounts payable systems operated by Autoliv. Cash receipts were transferred to centralized accounts, also maintained by Autoliv. As cash was disbursed and received by Autoliv, it was accounted for by Veoneer through the Net Former Parent investment. All short-term and long-term debt was financed by Autoliv or by Nissin Kogyo and financing decisions for wholly and majority owned subsidiaries were determined by Autoliv’s corporate treasury operations. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents. Upon the Spin-Off, Veoneer created its own corporate treasury operations. |
Factoring
Factoring | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Factoring | Factoring The Company receives bank notes generally maturing within six months from certain of its customers in China to settle trade accounts receivable. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash. For the three months ended March 31, 2019, the Company has entered into arrangements with financial institutions and sold $19 million of trade receivables without recourse and $20 million of bank notes without recourse, which qualify as a sale as all rights to the trade and notes receivable have passed to the financial institution. There were no factoring arrangements for the three months ended March 31, 2018. As of March 31, 2019, the Company has $18 million of trade notes receivables which remain outstanding and will mature within the second half of 2019. The collections of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company is currently in discussions with Volvo Cars, its Zenuity JV partner, regarding the development priorities of Zenuity in light of the market shift toward autonomous vehicle solutions. The outcome of these discussions may influence the level of funding and participation of Veoneer in the Zenuity JV, as well as future sharing of intellectual property and IP licenses. Although no final commitment has been made, it is reasonably possible that the Company will make a capital contribution approximately of $27 million to the Zenuity JV in the second quarter of 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying unaudited condensed consolidated financial statements for the period ended March 31, 2018 have been prepared from Autoliv’s historical accounting records and are presented on a stand-alone basis as if the operations had been conducted independently from Autoliv. Prior to the Spin-Off, Autoliv’s net investment in these operations (Former Parent equity) is shown in lieu of a controlling interest’s equity in the unaudited condensed consolidated financial statements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) were reflected in Retained earnings (Accumulated deficit). For periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Condensed Consolidated Financial Statements"). The unaudited condensed consolidated financial statements include the historical operations, assets, and liabilities that were considered to comprise the Veoneer business. All of the allocations and estimates in the unaudited condensed consolidated financial statements are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of Veoneer included herein may not be indicative of what they would have been had Veoneer actually been a stand-alone entity during such periods, nor are they necessarily indicative of Veoneer's future results. The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2018 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. |
New Accounting Standards | New Accounting Standards Adoption of New Accounting Standards 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. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019, as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, and has not made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, have allowed the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of approximately $75 million as of January 1, 2019. The adoption of the new lease standard did not have a material impact on the Company's Condensed Consolidated Statements of Operations or Statements of Cash Flows. Balance Sheet (Dollars in millions) Balance at December 31, 2018 Adjustments due to ASU 2016-02 Balance at January 1, 2019 Assets Right-of-use assets, operating leases $ — $ 75 $ 75 Current liabilities Other current liabilities — 16 16 Non-current liabilities Operating lease liabilities - non-current — 57 57 Equity Accumulated deficit (181 ) — (181 ) In May 2014, the FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. 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 the Condensed Consolidated Financial Statements. 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 the Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on the Condensed Consolidated Financial Statements. |
Fair Value Measurements | Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of adjustments made due to new ASU | Balance Sheet (Dollars in millions) Balance at December 31, 2018 Adjustments due to ASU 2016-02 Balance at January 1, 2019 Assets Right-of-use assets, operating leases $ — $ 75 $ 75 Current liabilities Other current liabilities — 16 16 Non-current liabilities Operating lease liabilities - non-current — 57 57 Equity Accumulated deficit (181 ) — (181 ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue disaggregated by primary region and products of revenue recognition | In the following tables, revenue is disaggregated by primary region and products of revenue recognition. Net Sales by Region (Dollars in millions) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 89 $ 72 $ 161 $ 112 $ 99 $ 211 Americas 154 15 169 179 14 193 Europe 164 — 164 190 — 190 Total $ 407 $ 87 $ 494 $ 481 $ 114 $ 594 Net Sales by Products (Dollars in millions) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 215 $ — $ 215 $ 268 $ — $ 268 Active Safety products 192 — 192 213 — 213 Brake Systems — 87 87 — 114 114 Total net sales $ 407 $ 87 $ 494 $ 481 $ 114 $ 594 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Lease Costs and Supplemental Cash Flows | Other information related to leases for the three months ended was as follows: (in millions, except lease term and discount rate) March 31, 2019 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 4 Operating cash flows used for finance leases — Financing cash flows used for finance leases — Right-of-use assets obtained in exchange for new lease obligations: Operating leases 4 Finance leases 33 Weighted-average remaining lease term Operating Leases 7 Finance Leases 12 Weighted-average discount rate Operating leases 4.1 % Finance leases 4.9 % The components of lease expense for the three months ended were as follows: (in millions) March 31, 2019 Operating lease cost $ 5 Finance lease cost Amortization of right-of-use assets 1 Interest on lease liabilities — Total finance lease cost 1 Short-term lease cost — Variable lease cost — Total lease cost $ 6 |
Schedule of Future Minimum Finance Lease Payments | Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 13 $ 2 2020 15 3 2021 12 14 2022 10 3 2023 8 3 Thereafter 24 38 Total lease payments 82 63 Less imputed interest 13 18 Total lease liabilities $ 69 $ 45 |
Schedule of Future Minimum Operating Lease Payments | Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 13 $ 2 2020 15 3 2021 12 14 2022 10 3 2023 8 3 Thereafter 24 38 Total lease payments 82 63 Less imputed interest 13 18 Total lease liabilities $ 69 $ 45 |
Schedule of Lease Obligations | Leases obligations reported as of March 31, 2019 were as follows: (in millions) Operating Leases Finance Leases Other current liabilities $ 13 $ 1 Lease liabilities - non current 53 33 Total lease liabilities $ 66 $ 34 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories are stated at the lower of cost (principally on a first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of March 31, 2019 December 31, 2018 Raw materials $ 118 $ 108 Work in progress 11 15 Finished products 64 71 Inventories $ 193 $ 194 Inventory valuation reserve (23 ) (23 ) Total inventories, net of reserve $ 170 $ 172 |
Equity Method Investment (Table
Equity Method Investment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Unaudited Income Statement Information | Certain Unaudited Summarized Income Statement information of Zenuity, for the three months ended March 31, 2019 and 2018, is shown below: Three Months Ended March 31 2019 2018 Net sales $ — $ 1 Gross profit — — Operating loss (34 ) (28 ) Loss before income taxes (34 ) (28 ) Net loss $ (34 ) $ (28 ) |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | As of March 31, 2019 December 31, 2018 Operating related accruals $ 63 $ 55 Employee related accruals 71 66 Customer pricing accruals 44 39 Product related liabilities 1 14 16 Other accruals 22 18 Total Accrued Expenses $ 214 $ 193 1 As of March 31, 2019 and December 31, 2018 was $11 million and $14 million , respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of components of net periodic benefit cost | The Company’s net periodic benefit costs for the Existing Veoneer Plans for the three months ended March 31, 2019 and 2018 were as follows: Three Months Ended March 31 2019 2018 Service cost $ 1 $ 1 Interest cost — — Expected return on plan assets (1 ) (1 ) Net periodic benefit cost $ — $ 1 |
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 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 |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Loss Contingency [Abstract] | |
Schedule of change in balance sheet position of product related liabilities | The table below summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets. Three Months Ended March 31 2019 2018 Reserve at beginning of the period $ 16 $ 22 Change in reserve (1 ) 7 Cash payments (2 ) (6 ) Reserve at end of the period $ 14 $ 23 |
Loss per share (Tables)
Loss per share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted loss per share for the three months ended March 31, 2019 and 2018. (U.S. dollars in millions, except per share amounts) Three Months Ended March 31 2019 2018 Numerator: Basic and diluted: Net loss attributable to Veoneer $ (137 ) $ (32 ) Denominator: Basic: Weighted average number of shares outstanding (in millions) 87.24 87.13 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 87.24 87.13 Basic loss per share (1.57) (0.36) Diluted loss per share (1.57) (0.36) 1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. In periods when the Company has a net loss, equity incentive awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The Company excluded equity incentive awards of 321,619 for the three months ended March 31, 2019 and zero as of March 31, 2018. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of (loss)/income before income taxes | Three Months Ended March 31 (Loss) Before Income Taxes 2019 2018 Electronics $ (90 ) $ (1 ) Brake Systems (19 ) (8 ) Segment operating (loss)/income (109 ) (9 ) Corporate and other (19 ) (7 ) Interest and other non-operating items, net 3 — Loss from equity method investment (17 ) (14 ) Loss before income taxes $ (142 ) $ (30 ) |
Relationship with Former Pare_2
Relationship with Former Parent and Related Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of amount due to and from related parties | Amounts due to and due from related parties are summarized in the below table: As of Related Party March 31, 2019 December 31, 2018 Related party receivable $ 43 $ 64 Related party notes receivable — 1 Related party payables 4 16 Related party short-term debt 2 1 Related party long-term debt 13 13 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) - segment | Jun. 29, 2018 | Mar. 31, 2019 |
Restructuring Cost and Reserve [Line Items] | ||
Number of operating segments | 2 | |
Spin-Off | Autoliv | ||
Restructuring Cost and Reserve [Line Items] | ||
Distribution percentage of outstanding common stock in spinoff transaction | 100.00% | |
Spin off conversion ratio | 1 | |
Spin-Off | Autoliv | SDR | ||
Restructuring Cost and Reserve [Line Items] | ||
Spin off conversion ratio | 1 | |
Spin-Off | Autoliv | Common Stock | ||
Restructuring Cost and Reserve [Line Items] | ||
Spin off conversion ratio | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 70 | $ 75 | $ 0 |
Operating lease liabilities | $ 69 | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | 75 | ||
Operating lease liabilities | $ 75 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2016-02 (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Right-of-use assets, operating leases | $ 70 | $ 75 | $ 0 |
Current liabilities | |||
Other current liabilities | 13 | 16 | 0 |
Non-current liabilities | |||
Operating lease liabilities - non-current | 53 | 57 | 0 |
Equity | |||
Accumulated deficit | $ (318) | (181) | $ (181) |
Accounting Standards Update 2016-02 | |||
Assets | |||
Right-of-use assets, operating leases | 75 | ||
Current liabilities | |||
Other current liabilities | 16 | ||
Non-current liabilities | |||
Operating lease liabilities - non-current | 57 | ||
Equity | |||
Accumulated deficit | $ 0 |
Revenue - Revenue Disaggregated
Revenue - Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 494 | $ 594 |
Operating Segments | Restraint Control Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 215 | 268 |
Operating Segments | Active Safety products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 192 | 213 |
Operating Segments | Brake Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 87 | 114 |
Electronics | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 407 | 481 |
Electronics | Operating Segments | Restraint Control Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 215 | 268 |
Electronics | Operating Segments | Active Safety products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 192 | 213 |
Electronics | Operating Segments | Brake Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Brake Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 87 | 114 |
Brake Systems | Operating Segments | Restraint Control Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Brake Systems | Operating Segments | Active Safety products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
Brake Systems | Operating Segments | Brake Systems | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 87 | 114 |
Asia | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 161 | 211 |
Asia | Electronics | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 89 | 112 |
Asia | Brake Systems | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 72 | 99 |
Americas | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 169 | 193 |
Americas | Electronics | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 154 | 179 |
Americas | Brake Systems | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 15 | 14 |
Europe | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 164 | 190 |
Europe | Electronics | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 164 | 190 |
Europe | Brake Systems | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Options to extend term | 10 years |
Assets recorded under finance leases | $ 48 |
Finance lease asset, accumulated depreciation | 2 |
Operating lease not yet commenced | $ 39 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 1 year |
Options to terminate term | 1 month |
Operating leases not yet commenced lease term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 15 years |
Options to terminate term | 5 years |
Operating leases not yet commenced lease term | 15 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 5 |
Finance lease cost | |
Amortization of right-of-use assets | 1 |
Interest on lease liabilities | 0 |
Total finance lease cost | 1 |
Short-term lease cost | 0 |
Variable lease cost | 0 |
Total lease cost | $ 6 |
Leases - Schedule of Cash Flow
Leases - Schedule of Cash Flow and Other Information (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows used for operating leases | $ 4,000,000 |
Operating cash flows used for finance leases | 0 |
Financing cash flows used for finance leases | 0 |
Right-of-use assets obtained in exchange for new lease obligations: | |
Operating leases | 4 |
Finance leases | $ 33 |
Weighted-average remaining lease term | |
Operating Leases | 7 years |
Finance Leases | 12 years |
Weighted-average discount rate | |
Operating leases | 4.10% |
Finance leases | 4.90% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Operating and Finance Lease Payments (Details) $ in Millions | Mar. 31, 2019USD ($) |
Operating Leases | |
2019 (excluding the three months ended March 31, 2019) | $ 13 |
2020 | 15 |
2021 | 12 |
2022 | 10 |
2023 | 8 |
Thereafter | 24 |
Total lease payments | 82 |
Less imputed interest | 13 |
Total lease liabilities | 69 |
Finance Leases | |
2019 (excluding the three months ended March 31, 2019) | 2 |
2020 | 3 |
2021 | 14 |
2022 | 3 |
2023 | 3 |
Thereafter | 38 |
Total lease payments | 63 |
Less imputed interest | 18 |
Total lease liabilities | $ 45 |
Leases - Schedule of Lease Obli
Leases - Schedule of Lease Obligations (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
Other current liabilities | $ 13 | $ 16 | $ 0 |
Operating lease liabilities - non-current | 53 | $ 57 | 0 |
Total lease liabilities | 66 | ||
Finance Leases | |||
Other current liabilities | 1 | ||
Finance lease non-current liabilities | 33 | $ 1 | |
Total lease liabilities | $ 34 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2019USD ($)contract | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Gains and losses on derivative financial instruments recognized in other non-operating items (less than) | $ 1 | $ 1 | ||||
Fair value of earn-out liability | $ 14 | $ 14 | ||||
Other operating income from earn out liability adjustment | $ 13 | |||||
Fair value of contingent consideration | $ 0 | |||||
Foreign exchange swaps | Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Maturity period of swap contracts | 6 months | |||||
Foreign exchange swaps | Maturity Beyond Six Months | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Number of foreign currency derivatives held | contract | 0 | |||||
Foreign exchange forward contracts | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Derivative Asset (Other current/non current assets) | $ 98 | $ 103 | ||||
Derivative Liability (Other current/non current liabilities) | 1 | |||||
Fair Value Measured at Net Asset Value Per Share | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investment | $ 8 | $ 8 | $ 15 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 6 | $ 7 |
Net discrete expense related to changes in valuation allowance | $ 3 | $ 1 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 118 | $ 108 |
Work in progress | 11 | 15 |
Finished products | 64 | 71 |
Inventories | 193 | 194 |
Inventory valuation reserve | (23) | (23) |
Total inventories, net of reserve | $ 170 | $ 172 |
Equity Method Investment - Narr
Equity Method Investment - Narrative (Details) kr in Millions, $ in Millions | 3 Months Ended | ||||
Mar. 31, 2019USD ($)investment | Mar. 31, 2018USD ($) | Mar. 31, 2018SEK (kr) | Dec. 31, 2018USD ($) | Apr. 18, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Number of equity method investments | investment | 1 | ||||
Loss from equity method investment | $ 17 | $ 14 | |||
Equity investments after consideration of foreign exchange movements | 81 | $ 101 | |||
Zenuity | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage in joint venture | 50.00% | 50.00% | |||
Cash contribution to joint venture | $ 71 | kr 600 | |||
Loss from equity method investment | 17 | $ 14 | |||
Equity investments after consideration of foreign exchange movements | $ 81 | $ 101 | |||
Zenuity | Volvo Cars | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage in joint venture | 50.00% |
Equity Method Investment - Summ
Equity Method Investment - Summary of Unaudited Income Statement Information (Details) - Zenuity - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||
Net sales | $ 0 | $ 1 |
Gross profit | 0 | 0 |
Operating loss | (34) | (28) |
Loss before income taxes | (34) | (28) |
Net loss | $ (34) | $ (28) |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Operating related accruals | $ 63 | $ 55 |
Employee related accruals | 71 | 66 |
Customer pricing accruals | 44 | 39 |
Product related liabilities | 14 | 16 |
Other accruals | 22 | 18 |
Total Accrued Expenses | 214 | 193 |
Affiliated Entity | ||
Loss Contingencies [Line Items] | ||
Product related liabilities | $ 11 | $ 14 |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - Pension Plans, Defined Benefit - Existing Veoneer Plans - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 0 | 0 |
Expected return on plan assets | (1) | (1) |
Net periodic benefit cost | $ 0 | $ 1 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - Pension Plans, Defined Benefit $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Transferred Veoneer Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan net periodic benefit cost (less than) | $ 1 |
Autoliv Sponsored Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plan expense and contributions prior to the plans amendment (less than) | $ 1 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) $ in Millions | Mar. 01, 2019 | Feb. 19, 2019 | Jun. 29, 2018 | Feb. 18, 2018 | Mar. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage grantee may earn based on achievement of specific targets | 100.00% | ||||||
Affiliated Entity | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Estimated target performance level | 50.00% | ||||||
Performance period | 3 years | ||||||
2018 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for grant of common stock for future equity awards (in shares) | 3,000,000 | ||||||
Number of shares used for conversion of outstanding grants (in shares) | 1,000,000 | ||||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted (in shares) | 131,871 | ||||||
Grant date fair value | $ 1 | $ 4 | $ 6 | ||||
Percentage of incentive value received as performance shares | 50.00% | ||||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted (in shares) | 121,564 | ||||||
Percentage of incentive value received as performance shares | 50.00% | ||||||
RSUs and PSs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 1 | $ 1 | |||||
Spin-Off | 2018 Stock Incentive Plan | Autoliv | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares authorized to be used for conversion of outstanding Autoliv stock awards (in shares) | 1,700,000 | ||||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage grantee may earn based on achievement of specific targets | 0.00% | ||||||
Minimum | Affiliated Entity | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage grantee may earn based on achievement of specific targets | 0.00% | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage grantee may earn based on achievement of specific targets | 200.00% | ||||||
Maximum | Affiliated Entity | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Percentage grantee may earn based on achievement of specific targets | 200.00% |
Contingent Liabilities - Schedu
Contingent Liabilities - Schedule of Change in Balance Sheet Position of Product Related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Product Warranty Accrual [Roll Forward] | ||
Reserve at beginning of the period | $ 16 | $ 22 |
Change in reserve | (1) | 7 |
Cash payments | (2) | (6) |
Reserve at end of the period | $ 14 | $ 23 |
Contingent Liabilities - Narrat
Contingent Liabilities - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Loss Contingencies [Line Items] | ||
Estimated potential loss | $ 2 | |
Other current assets | 21 | $ 22 |
Guarantee obligations | 8 | $ 8 |
Indemnification Asset | ||
Loss Contingencies [Line Items] | ||
Other current assets | $ 11 |
Loss per share - Computation of
Loss per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Basic and diluted: | ||
Net loss attributable to Veoneer | $ (137) | $ (32) |
Denominator: | ||
Basic: Weighted average number of shares outstanding (in millions) (in shares) | 87,240,000 | 87,130,000 |
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares) | 87,240,000 | 87,130,000 |
Basic loss per share (in dollars per share) | $ (1.57) | $ (0.36) |
Diluted loss per share (in dollars per share) | $ (1.57) | $ (0.36) |
Shares excluded from calculation (in shares) | 321,619 | 0 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
(Loss) Before Income Taxes | $ (128) | $ (16) |
Interest and other non-operating items, net | 3 | 0 |
Loss from equity method investment | (17) | (14) |
Loss before income taxes | (142) | (30) |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
(Loss) Before Income Taxes | (109) | (9) |
Electronics | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
(Loss) Before Income Taxes | (90) | (1) |
Brake Systems | Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
(Loss) Before Income Taxes | (19) | (8) |
Corporate and other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
(Loss) Before Income Taxes | $ (19) | $ (7) |
Relationship with Former Pare_3
Relationship with Former Parent and Related Entities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jun. 29, 2018 | |
Related Party Transaction [Line Items] | ||||
Cash and cash equivalents | $ 715 | $ 864 | $ 1,000 | |
Nissin Kogyo | ||||
Related Party Transaction [Line Items] | ||||
Minority ownership percentage | 49.00% | |||
Veoneer Nissin Brakes Systems | ||||
Related Party Transaction [Line Items] | ||||
Majority ownership percentage | 51.00% | |||
Capital lease arrangements | $ 12 | $ 13 | ||
Autoliv | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 26 | $ 41 | ||
Autoliv | Transition Services Agreement | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Expenses, related party | $ 1 |
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 | Mar. 31, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Related party receivable | $ 43 | $ 64 |
Related party notes receivable | 0 | 1 |
Related party payables | 4 | 16 |
Related party short-term debt | 2 | 1 |
Related party long-term debt | $ 13 | $ 13 |
Factoring (Details)
Factoring (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Receivables [Abstract] | |
Sale of trade receivables | $ 19 |
Sale of bank notes without recourse | 20 |
Trade notes receivables | $ 18 |
Subsequent Events (Details)
Subsequent Events (Details) - Zenuity kr in Millions, $ in Millions | 3 Months Ended | ||
Jun. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Mar. 31, 2018SEK (kr) | |
Subsequent Event [Line Items] | |||
Cash contribution to joint venture | $ 71 | kr 600 | |
Scenario, Forecast | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Cash contribution to joint venture | $ 27 |