Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 16, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38471 | |
Entity Registrant Name | Veoneer, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3720890 | |
Entity Address, Address Line One | Klarabergsviadukten 70, Section C6 | |
Entity Address, Address Line Two | Box 13089 | |
Entity Address, City or Town | Stockholm | |
Entity Address, Country | SE | |
Entity Address, Postal Zip Code | SE- 103 02 | |
City Area Code | 46 | |
Local Phone Number | 8 527 762 00 | |
Title of 12(b) Security | Common stock, $1.00 par value | |
Trading Symbol | VNE | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 111,594,984 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001733186 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 371 | $ 462 | $ 918 | $ 1,446 |
Cost of sales | (317) | (389) | (808) | (1,211) |
Gross profit | 54 | 73 | 110 | 235 |
Selling, general and administrative expenses | (43) | (45) | (124) | (148) |
Research, development and engineering expenses, net | (124) | (144) | (299) | (459) |
Amortization of intangibles | (1) | (6) | (4) | (17) |
Other income, net | 11 | 0 | 27 | 1 |
Operating loss | (103) | (122) | (290) | (388) |
Loss on divestiture and assets impairment charge, net | (24) | 0 | (91) | 0 |
Loss from equity method investment | (1) | (16) | (39) | (50) |
Interest income | 1 | 7 | 8 | 14 |
Interest expense | (5) | (5) | (15) | (7) |
Other non-operating items, net | 0 | 0 | 0 | 1 |
Loss before income taxes | (132) | (136) | (427) | (430) |
Income tax expense (benefit) | 0 | (3) | (26) | 1 |
Net loss | (132) | (139) | (453) | (429) |
Less: Net income (loss) attributable to non-controlling interest | 0 | (6) | 1 | (26) |
Net loss attributable to controlling interest | $ (132) | $ (133) | $ (454) | $ (403) |
Net loss per share - basic and diluted (in dollars per share) | $ (1.18) | $ (1.20) | $ (4.07) | $ (4.10) |
Weighted average number of shares outstanding, (in millions) (in shares) | 111,590 | 111,400 | 111,550 | 98,320 |
Weighted average number of shares outstanding, assuming dilution (in millions) (in shares) | 111,590 | 111,400 | 111,550 | 98,320 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (132) | $ (139) | $ (453) | $ (429) |
Other comprehensive loss, before tax: | ||||
Change in cumulative translation adjustment | 15 | (27) | 15 | (40) |
Other comprehensive income (loss), before tax | 15 | (27) | 15 | (40) |
Other comprehensive income (loss), net of tax | 15 | (27) | 15 | (40) |
Comprehensive loss | (117) | (166) | (438) | (469) |
Less: Comprehensive income (loss) attributable to non-controlling interest | 0 | (7) | 2 | (26) |
Comprehensive loss attributable to controlling interest | $ (117) | $ (159) | $ (440) | $ (443) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 846 | $ 859 |
Receivables, net | 245 | 253 |
Inventories, net | 124 | 144 |
Related party receivables | 6 | 11 |
Prepaid expenses and other contract assets | 32 | 47 |
Other current assets | 20 | 18 |
Assets held for sale | 0 | 317 |
Total current assets | 1,273 | 1,649 |
Property, plant and equipment, net | 413 | 473 |
Operating lease right-of-use assets | 86 | 100 |
Equity method investment | 129 | 87 |
Goodwill | 314 | 290 |
Intangible assets, net | 22 | 17 |
Deferred tax assets | 6 | 7 |
Other long-term investments | 9 | 9 |
Other non-current assets | 27 | 111 |
Total assets | 2,279 | 2,743 |
Liabilities and equity | ||
Accounts payable | 223 | 233 |
Related party payables | 1 | 3 |
Accrued expenses | 230 | 192 |
Income tax payable | 28 | 7 |
Related party short-term debt | 14 | 1 |
Other current liabilities | 51 | 37 |
Liabilities held for sale | 0 | 118 |
Total current liabilities | 547 | 591 |
4.00% Convertible Senior Notes due 2024 | 167 | 160 |
Related party long-term debt | 103 | 0 |
Pension liability | 18 | 17 |
Deferred tax liabilities | 10 | 13 |
Operating lease non-current liabilities | 68 | 82 |
Finance lease non-current liabilities | 42 | 33 |
Other non-current liabilities | 26 | 29 |
Total non-current liabilities | 434 | 334 |
Equity | ||
Common stock (par value $1.00, 325 million shares authorized, 111 million shares issued and outstanding as of September 30, 2020 and December 31, 2019) | 111 | 111 |
Additional paid-in capital | 2,349 | 2,343 |
Accumulated deficit | (1,135) | (681) |
Accumulated other comprehensive loss | (27) | (44) |
Total equity | 1,298 | 1,729 |
Non-controlling interest | 0 | 89 |
Total equity and non-controlling interest | 1,298 | 1,818 |
Total liabilities, equity and non-controlling interest | $ 2,279 | $ 2,743 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Par Value (in dollars per share) | $ 1 | $ 1 |
Shares Authorized (in shares) | 325,000,000 | 325,000,000 |
Shares Issued (in shares) | 111,000,000 | 111,000,000 |
Shares Outstanding (in shares) | 111,000,000 | 111,000,000 |
4% Convertible Senior Dotes due 2024 | Convertible Senior Notes | ||
Stated interest rate | 4.00% |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2018 | $ 1,927 | $ 87 | $ 1,938 | $ (181) | $ (19) | $ 101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (429) | (403) | (26) | |||
Foreign currency translation | (40) | (40) | 0 | |||
Stock based compensation expense | 5 | 5 | 0 | |||
Issuance of common stock | 403 | 24 | 379 | |||
Purchase of minority interest | 0 | (14) | 14 | |||
Equity component of issuance of convertible notes, net of taxes (Note 5) | 35 | 35 | ||||
Balance at end of period at Sep. 30, 2019 | 1,900 | 111 | 2,343 | (584) | (59) | 89 |
Balance at beginning of period at Dec. 31, 2019 | 1,818 | 111 | 2,343 | (681) | (44) | 89 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (453) | (454) | 1 | |||
Foreign currency translation | 15 | 14 | ||||
Stock based compensation expense | 6 | 6 | ||||
Business divestitures | (88) | 3 | (91) | |||
Balance at end of period at Sep. 30, 2020 | $ 1,298 | $ 111 | $ 2,349 | $ (1,135) | $ (27) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net loss | $ (453) | $ (429) |
Depreciation and amortization | 73 | 90 |
Gain on divestitures | (77) | 0 |
Assets impairment charge | 168 | 0 |
Undistributed loss from equity method investments | 39 | 50 |
Stock-based compensation | 6 | 5 |
Deferred income taxes | (3) | (7) |
Other, net | 3 | (7) |
Change in operating assets and liabilities: | ||
Receivables, gross | 36 | 48 |
Accrued expenses | 45 | 42 |
Related party receivables and payables, net | 4 | 37 |
Accounts payable | (8) | (18) |
Prepaid expenses and other contract assets | 14 | (10) |
Inventories, gross | 15 | 1 |
Income taxes | 20 | 0 |
Other current assets and liabilities, net | 3 | (23) |
Net cash used in operating activities | (115) | (221) |
Investing activities | ||
Proceeds from divestitures | 198 | 0 |
Capital expenditures | (70) | (168) |
Equity method investment | 10 | |
Equity method investment | (32) | |
Short-term investments mature into cash | 0 | 5 |
Long term investments | (1) | (3) |
Proceeds from sale of property, plant and equipment | 10 | 0 |
Acquisition of intangible assets | (10) | 0 |
Acquisition of business net of cash acquired | (33) | 0 |
Net cash provided by (used in) investing activities | 104 | (198) |
Financing activities | ||
Issuance of common stock | 0 | 405 |
Dividend paid to non-controlling interest | (5) | 0 |
(Payments for) proceeds from long-term debt | (1) | 206 |
(Payments for) Proceeds from short-term debt | (2) | 22 |
Net increase in related party short-term debt | 0 | 1 |
Net cash (used in) provided by financing activities | (8) | 634 |
Effect of exchange rate changes on cash and cash equivalents | 6 | (17) |
Increase (decrease) in cash and cash equivalents | (13) | 198 |
Cash and cash equivalents at beginning of period | 859 | 864 |
Cash and cash equivalents at end of period | $ 846 | $ 1,062 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Spin-Off 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. 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 Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality. 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, 2019 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 21, 2020. 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. Follow-on Offerings On May 28, 2019, the Company completed follow-on public offerings of 24,000,000 shares of common stock and $207 million aggregate principal amount of 4.00% Convertible Senior Notes due 2024 (the “Notes”) (including $27 million aggregate principal amount pursuant to the underwriters’ over-allotment option to purchase additional notes). The public offering price for the Company's common stock offering was $17.50 per share. The Company received net proceeds of approximately $403 million from the common stock offering and approximately $200 million from the Notes offering, in each case after deducting the underwriting discounts and issuance costs directly attributable to each offering. Divestiture of Veoneer Nissin Brake System ("VNBS") On October 30, 2019, Veoneer signed definitive agreements to sell its 51% ownership in Veoneer Nissin Brake Japan ("VNBJ") and Veoneer Nissin Brake China ("VNBZ") entities that comprise VNBS to its joint venture partner Nissin-Kogyo Co., Ltd. (“Nissin Kogyo”), and Honda Motor Co., Ltd. The aggregate purchase price was $176 million. The divestiture of VNBJ and VNBZ was structured as two separate transactions each of which was completed on February 3, 2020, and the VNBS joint venture was terminated. See Note 5 "Divestiture and held for sale" for additional information. Divestiture of Veoneer Brake Systems ("VBS") |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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, 2019 filed with the SEC on February 21, 2020. Other Income, Net On March 30, 2020, Veoneer commenced arbitration against Nissin Kogyo regarding a dispute arising out of a Share Purchase Agreement (“SPA”) dated September 2015. On June 30, 2020, Veoneer agreed to settle the proceedings, along with any and all legal claims arising out of or relating to the SPA dispute, for $20 million. The cash settlement was received by the Company on June 30, 2020 and is reported among Other income, net in the unaudited Condensed Consolidated Statements of Operations. Research, development and engineering In early 2019, as a result of multiple factors, including general market conditions, numerous customer change requests, and challenges involved in developing new technologies for various customer programs, Veoneer launched a broad initiative to have its customers contribute more to the cost of developing these programs. The Company began to approach customers to negotiate or renegotiate new or existing agreements to provide for more favorable cost sharing terms. As part of this initiative, Veoneer approached a certain customer to adjust the terms of existing award agreements. On May 20, 2020, the Company entered into an adjustment agreement with such customer and received a lump sum settlement of $65 million for past research, development and engineering costs and implementation of change requests, and $11 million for software specific future development. During the second quarter of 2020, the Company received a total of $76 million from the adjustment agreement. According to the Company’s accounting policies, research, development and most engineering expenses are expensed as incurred. These expenses are reported net of expense reimbursements from contracts to further customize existing products for specific customers. For the nine months ended September 30, 2020, the Company recognized a total reimbursement from customers of $82 million for past completed engineering services as a reduction of research, development and engineering costs on the unaudited Condensed Consolidated Statement of Operations. In addition, as of September 30, 2020, the Company recognized $15 million from the adjustment agreement as deferred income reported among Other current liabilities in the unaudited Condensed Consolidated Balance Sheet. The deferred amount will be recognized in a systematic way and in proportion to the completion of the future engineering services related to the adjustment agreement as reimbursement from customers. Accounting for credit losses The Company has evaluated the available adoption options of common credit loss methods that are acceptable as per FASB Accounting Standards Codification Topic 326, Credit Losses. The Company adopted the available Loss-rate method where the impairment is calculated using an estimated loss rate and multiplying it by the asset’s amortized cost at the balance sheet date. This method appropriately reflects the Company´s risk pattern in relation to its accounts receivables. The key components of the Company’s Loss-rate model are as follows: • A list of the Company's customers credit rating and credit default risk rate from Bloomberg. • Actual write-offs or reversals of previous write-offs of accounts receivables. • Evaluation of other unusual facts and circumstances which could impact the credit loss rate, such as risk of bankruptcy or potential collectability issues. The Company’s credit loss model includes the Company’s customer list. The customer list captures the existing customers. The list is put into a Bloomberg data query to generate customers short-term credit rating. The credit default risk rate is used to calculate the credit loss rate or estimated loss rate. For customers that do not have credit default risk rate, management uses the six-month LIBOR rate as a credit rating and a credit default risk rate. Management believes that the six-month LIBOR rate adequately reflects the short-term nature of the Company’s trade receivables and is also in line with the Company’s invoice payment terms. Concentration of Credit Risk A substantial majority of the Company’s trade receivables are derived from sales to OEMs. For the three and nine months ended September 30, 2020 the Company’s four largest customers accounted for 55% and 57% of net sales, respectively and for the three and nine months ended September 30, 2019, the Company’s four largest customers accounted for 61% and 59% of net sales, respectively. Additionally, as of September 30, 2020 and December 31, 2019, these four largest customers accounted for 41% and 39%, respectively, of the Company’s accounts receivables. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers. New Accounting Standards Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s condensed consolidated financial statements. Adoption of New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses ( Topic 326 ), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and earlier adoption is permitted for annual periods beginning after December 15, 2018. The Company adopted ASU 2016-13 effective January 1, 2020 and applied a loss rate model to compute the expected credit loss allowance. The adoption of ASU 2016-13 did not have a material impact on the Company's condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18 Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606, which (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under ASC Topic 606, Revenue from Contracts with Customers (Topic 606) , when the collaborative arrangement participant is a customer in the context of a unit of account, (2) adds unit-of-account guidance in Topic 808 to align with Topic 606 when an entity is assessing whether the collaborative arrangement, or a part of the arrangement, is within the scope of Topic 606, (3) precludes presenting transactions together with revenue when those transactions involve collaborative arrangement participants that are not directly related to third parties and are not customers. The Company adopted ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-18 did not have a material impact on the Company's 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 adopted ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. 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 financial statements. Accounting Standards Issued But Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company plans to adopt ASU 2019-12 as of January 1, 2021. The Company has concluded that the pending adoption of ASU 2019-12 will not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on the Company's condensed consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of revenue In the following tables, revenue is disaggregated by primary region and products. Net Sales by Region Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 85 $ — $ 85 $ 80 $ 77 $ 157 Americas 123 13 136 133 14 147 Europe 150 — 150 158 — 158 Total net sales $ 358 $ 13 $ 371 $ 371 $ 91 $ 462 Net Sales by Region Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 202 $ 24 $ 226 $ 259 $ 229 $ 488 Americas 283 33 316 432 46 478 Europe 376 — 376 480 — 480 Total net sales $ 861 $ 57 $ 918 $ 1,171 $ 275 $ 1,446 Net Sales by Products Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 188 $ — $ 188 $ 193 $ — $ 193 Active Safety products 170 — 170 178 — 178 Brake Systems — 13 13 — 91 91 Total net sales $ 358 $ 13 $ 371 $ 371 $ 91 $ 462 Net Sales by Products Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 450 $ — $ 450 $ 617 $ — $ 617 Active Safety products 411 — 411 554 — 554 Brake Systems — 57 57 — 275 275 Total net sales $ 861 $ 57 $ 918 $ 1,171 $ 275 $ 1,446 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s unaudited condensed consolidated financial statements prospectively from their date of acquisition. Zenuity, Inc and Zenuity GmbH On April 2, 2020, the Company entered into a non-binding agreement with Volvo Cars Corporation (VCC) to separate Zenuity, a 50% ownership joint venture with VCC in order for each company to more effectively drive their respective strategies. The parties entered into definitive agreements and effected the separation on July 1, 2020. As part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US. The Company applied the acquisition method of accounting to the Zenuity, Inc and Zenuity GmbH entities, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the workforce. The recognized goodwill of $23 million recorded as part of this acquisition is included in the Electronics reportable segment and is not deductible for tax purposes. The preliminary opening balance sheet is subject to adjustment based on final assessment of the fair values of certain acquired assets, principally intangibles, and certain assumed liabilities. The Company used discounted cash flow ("DCF") analyses, which represent Level 3 fair value measurements, to assess the purchase price allocation. As the Company finalizes the fair value of the acquired assets and assumed liabilities, additional purchase price adjustments may be recorded during the measurement period. The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur. Total Zenuity, Inc and Zenuity GmbH acquisition related costs were approximately $1 million for the period ended September 30, 2020. These costs were reflected in Selling, general and administrative expenses in the unaudited Condensed Consolidated Statements of Operations for the period ended September 30, 2020. The following table summarizes the estimated fair values of identifiable acquired assets and assumed liabilities: Assets As of July 1, 2020 Cash and cash equivalents $ 4 Receivable, net 12 Property, plant and equipment, net 3 Operating lease right-of-use assets 10 Goodwill 23 Total assets $ 52 Tax payable 2 Accrued liabilities 3 Operating lease non-current liabilities 10 Total liabilities $ 15 Net assets acquired $ 37 Intellectual property In addition, the Company acquired the right to use VCC intellectual property of $10 million in a transaction outside of the business combination. The acquired intangible asset will be assigned a useful life of 8 years and amortized over the useful life on a straight-line basis. |
Divestiture and held for sale
Divestiture and held for sale | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture and held for sale | Divestiture and held for sale VBS In 2019, the Company started exploring strategic options for its non-core business in the Brake Systems segment. In the first quarter of 2020, management committed and approved a plan to sell VBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of June 30, 2020 and were required to be adjusted to the lower of fair value less cost to sell or carrying value. This resulted in an impairment charge of approximately $144 million which was recorded within Gain/(loss) on divestiture and assets held for sales, net on the unaudited Condensed Consolidated Statements of Operations during the period ended June 30, 2020. The impairment was measured using third party sales pricing to determine fair values of the assets. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The assets and liabilities associated with the transaction are separately classified as held for sale in the unaudited Condensed Consolidated Balance Sheet as of June 30, 2020 and depreciation of long-lived assets ceased on June 30, 2020. The divestiture did not meet the criteria for presentation as a discontinued operation. On August 10, 2020 Veoneer signed a definitive agreement to sell the majority of the Brake Systems business in North America to ZF. The aggregate purchase price was $1. In connection with the transaction, the Company received approximately $22 million from ZF for VBS operational cost reimbursement. The reimbursement cost was recognized as asset and liability held for sale on the unaudited Condensed Consolidated Balance sheet as of June 30, 2020. VNBS In the fourth quarter of 2019, management approved a plan to sell VNBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of December 31, 2019, and depreciation of long-lived assets ceased. The divestiture did not meet the criteria for presentation as a discontinued operation. On October 30, 2019, the Company entered into definitive agreements with Nissin-Kogyo Co., Ltd. and Honda Motor Co., Ltd to divest VNBS. On February 3, 2020, the Company completed the sale of VNBS. The aggregate purchase price of the transaction was $176 million, subject to certain adjustments. The net cash proceeds after adjusting for closing costs was $175 million. The Company recognized a gain on the divestiture of $77 million, net of closing costs. The major classes of assets and liabilities held for sale were as follows: (Dollars in millions) As of Assets held for sale December 31, 2019 Cash and cash equivalents $ 35 Receivables, net 58 Inventories, net 17 Property, plant and equipment, net 126 Intangible assets, net 66 Other current assets 15 Total assets held for sale $ 317 Liabilities held for sale Accounts payable 50 Accrued expenses 20 Related party short-term debt 12 Pension liability 8 Other current liabilities 28 Total liabilities held for sale $ 118 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s short and long-term debt consists of the following: As of (Dollars in millions) September 30, 2020 December 31, 2019 Short-Term Debt: Short-term borrowings $ 3 $ 3 Long-Term Debt: 4.00% Convertible Senior Notes due 2024 (Carrying value) 167 160 Other long-term borrowings 6 8 Total Debt $ 176 $ 171 Long-Term Debt: 4.00% Convertible Senior Notes On May 28, 2019, the Company issued, in a registered public offering in the U.S., Convertible Senior Notes (the “Notes”) with an aggregate principal amount of $207 million. The Notes bear interest at a rate of 4.00% per year payable semi-annually in arrears on June 1 and December 1 of each year, beginning December 1, 2019. The Notes will mature on June 1, 2024, unless repurchased, redeemed or converted in accordance with their terms prior to such date. The net proceeds from the offering of the Notes were approximately $200 million, after deducting issuance costs of $7 million. The Company accounted for these issuance costs as a direct deduction from the carrying amount of the Notes. These costs are being amortized into interest expense for 5 years or through June 2024. The conversion rate is 44.8179 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $22.3125 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event or notice of redemption, as the case may be. In no event will the conversion rate per $1,000 principal amount of notes as a result of this adjustment exceed 57.1428 shares of common stock, as stipulated in the indenture. The Company may not redeem the Notes prior to June 1, 2022. On or after this date, the Company may redeem for cash, shares or both all or any portion of the Notes, at our option, if the last reported sale price of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If the Company undergoes a fundamental change (as defined in the indenture), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Notes are the Company's general unsecured obligations and rank senior in right of payment to all of the Company's indebtedness that is expressly subordinated in right of payment to the Notes, equal in right of payment with all of the Company's liabilities that are not so subordinated, effectively junior to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2024 only under the following circumstances: (1) if the last reported sale price of the Company's common stock for at least 20 trading days, whether or not consecutive, during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the "trading price" (as defined in the indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after March 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at the Company's election, as stipulated in the indenture. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the unaudited Consolidated Condensed Balance Sheet and amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate on the Notes is 10%. The equity component of the Notes of approximately $46 million is included in additional paid-in capital in the unaudited Condensed Consolidated Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the unaudited Condensed Consolidated Balance Sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity. The following table presents the outstanding principal amount and carrying value of the Notes: 4.00% Convertible Senior Notes due 2024 As of (Dollars in millions) September 30, 2020 December 31, 2019 Principal amount (face value) $ 207 $ 207 Unamortized issuance cost (4) (5) Unamortized debt discount (36) (42) Net Carrying value $ 167 $ 160 The Company recognized total interest expense related to the Notes of $4 million and $4 million for three months ended September 30, 2020 and 2019, respectively, and $13 million and $6 million for the nine months ended September 30, 2020 and 2019, respectively, in the unaudited Condensed Consolidated Statements of Operations. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying obligation 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. 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 $198 million as of September 30, 2020 and $291 million as of December 31, 2019. As of September 30, 2020, derivatives not designated as hedging instruments was an asset of $3 million, and as of December 31, 2019, the derivatives not designated as hedging instruments was a liability of $1 million. There were no derivatives designated as hedging instruments. Gains and losses on derivative financial instruments recognized in the unaudited Condensed Consolidated Statements of Operations for the three months ended September 30, 2020 and 2019 were a gain of $2 million and a loss of less than $1 million, respectively, and for the nine months ended September 30, 2020 and 2019 were a gain of $4 million and a gain of $1 million, respectively. 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. VBS assets and liabilities classified as held for sale and the related impairment were measured using third party sales pricing to determine fair values of the assets. See Note 5 "Divestiture and held for sale" for additional information. 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, periodically makes capital contributions toward this total commitment amount. As of September 30, 2020 and December 31, 2019, Veoneer contributed approximately $12 million and $10 million, respectively, to the investment in Autotech Fund I, L.P. As of September 30, 2020 the Company has received distributions of $3 million from the partnership and was recognized as reduction of the investment amount. The carrying amounts of $9 million reflected in the unaudited Condensed Consolidated Balance Sheet in Investments for AutoTech Fund I, L.P approximates its fair value as of June 30, 2020 as this is the most recent information available to the Company at this time. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The tax expense for the three and nine month periods ended September 30, 2020, was less than $1 million and $26 million, respectively. During the three and nine month periods ended September 30, 2019, the Company recorded a tax expense of $3 million and a tax benefit of $1 million, respectively. Discrete items, net were a benefit of $2 million and expense of $17 million for the three and nine month periods ended September 30, 2020, respectively, and a benefit of less than $1 million and $6 million for the three and nine month periods ended September 30, 2019, respectively. The discrete item in the nine month period ended September 30, 2020 was primarily related to the tax impact of the divestiture of VNBS. Veoneer's effective tax rate differs from an expected statutory rate primarily due to the discrete item and losses in certain jurisdictions that are not benefited. 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 operations in United States, Sweden, France, Japan and China. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost (according to first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of (Dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 93 $ 99 Work in progress 11 8 Finished products 48 62 Inventories 152 169 Inventory valuation reserve (28) (25) Total inventories, net of reserve $ 124 $ 144 |
Equity Method Investment
Equity Method Investment | 9 Months Ended |
Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investment | Equity Method Investment On April 2, 2020, the Company entered into a non-binding agreement with VCC to separate Zenuity, a 50% ownership joint venture with VCC in order for each company to more effectively drive their respective strategies. The parties entered into definitive agreements and effected the separation on July 1, 2020. On July 1, 2020, the Company finalized the split of Zenuity. As part of the transaction the Company paid approximately $37 million to Zenuity for 200 software engineers and two business units located in Germany and the US. Veoneer acquired the right to use Zenuity's intellectual property for a total consideration of SEK 1,067 million (approximately $114 million) payable in ten annual installment payments, with the first payment due on July 1, 2021. As the transaction resulted in all of the business of Zenuity being transferred to one of its two owners, the Company determined that the remaining value of that equity investment was equal only to the expected future dividends to be received. This resulted in an impairment charge of approximately $24 million that was recorded in the unaudited Condensed Consolidated Statements of Operations for the period ended September 30, 2020. As the transaction was between the investor and investee, the Company did not recognize any gain from the transaction. Following completion of the transaction, Veoneer and VCC continue to own 50% each of Zenuity AB. The joint venture was not dissolved as part of the transaction but continues as a holding company that owns the IP of Zenuity. During the third quarter of 2020, the Company received dividend of SEK 327 million (approximately $35 million) in cash (representing 50% of the total dividend, with the remainder received by VCC) from Zenuity. During the second quarter of 2020, Veoneer contributed SEK 90 million (approximately $9 million) in cash (representing 50% of the total contribution, with the remainder made by VCC) into Zenuity to support its current operating cash flow needs. During the first quarter of 2020, Veoneer contributed SEK 150 million (approximately $16 million) in cash (representing 50% of the total contribution, with the remainder made by VCC) into Zenuity to support its future operating cash flow needs. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses As of (Dollars in millions) September 30, 2020 December 31, 2019 Operating related accruals $ 79 $ 43 Employee related accruals 88 76 Customer pricing accruals 22 39 Product related liabilities 1 19 15 Other accruals 22 19 Total Accrued Expenses $ 230 $ 192 1 As of September 30, 2020 and December 31, 2019, $10 million and $8 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 | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Defined Benefit Pension Plans The Company’s net periodic benefit costs for plans for the three and nine months ended September 30, 2020 and 2019 were as follows: Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Service cost $ 1 $ 1 $ 3 $ 4 Interest cost 1 — 2 1 Expected return on plan assets (1) (1) (2) (1) Net periodic benefit cost $ 1 $ — $ 3 $ 4 The service cost and amortization of prior service cost components are reported among employee compensation costs in the unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported in Other non-operating items, net in the unaudited Condensed Consolidated Statements of Operations. |
Stock Incentive Plan
Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [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 1.5 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. During the nine months ended September 30, 2020 under the Company’s long-term incentive (LTI) program, certain employees and non-employee directors received restricted stock units (RSUs) without dividend equivalent rights and performance shares (PSs) without dividend equivalent rights. The allocation between RSUs and PSs was 777,466 RSUs and 415,381 PSs at 100% target. The majority of the RSUs granted will vest on the 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 2020 were calculated by using the closing stock price on the grant dates. The grant date fair value for the RSUs and PSs, granted in 2020 was $11 million. PSs granted in 2020 will earn out during the first quarter of 2023, 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. Veoneer recognized total stock (RSUs, PS and Stock Options) compensation cost of $1 million and $5 million for the three and nine month periods ended September 30, 2020, respectively. During the three and nine month periods ended September 30, 2019, the Company recorded $2 million and $5 million, respectively. |
Contingent Liabilities
Contingent Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
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. 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 unaudited Condensed Consolidated Balance Sheet. Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Reserve at beginning of the period $ 18 $ 14 $ 15 $ 16 Change in reserve 2 — 8 1 Cash payments (1) — (4) (3) Reserve at end of the period $ 19 $ 14 $ 19 $ 14 For the three and nine month periods ended September 30, 2020 and 2019, cash paid primarily relate to warranty related issues. The increase in the reserve balance as of September 30, 2020 compared to the prior year was due to a recall related reserve liability. Agreements entered into between Autoliv and Veoneer in connection with the Spin-Off provide for Autoliv to indemnify Veoneer for certain liabilities related to electronics products manufactured before April 1, 2018. As of September 30, 2020 and December 31, 2019, $10 million and $8 million, respectively, of product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets. Guarantees The Company provided lease guarantees to Zenuity of $14 million and $7 million as of September 30, 2020, and December 31, 2019, respectively. 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. There are no liabilities recorded in the unaudited Condensed Consolidated Balance Sheet as of September 30, 2020 and December 31, 2019 related to these guarantees. |
Loss per share
Loss per share | 9 Months Ended |
Sep. 30, 2020 | |
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 shares 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 following table sets forth the computation of basic and diluted loss per share for the three and nine month periods ended September 30, 2020 and 2019. Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions, except per share amounts) 2020 2019 2020 2019 Numerator: Basic and diluted: Net loss attributable to Veoneer $ (132) $ (133) $ (454) $ (403) Denominator: Basic: Weighted average number of shares outstanding (in millions) 111.59 111.4 111.55 98.32 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 111.59 111.4 111.55 98.32 Basic loss per share $ (1.18) $ (1.20) $ (4.07) $ (4.10) Diluted loss per share $ (1.18) $ (1.20) $ (4.07) $ (4.10) 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 the Company's calculation of earnings per share as their inclusion would have an anti-dilutive effect. The Company excluded equity incentive awards of 963,171 and 741,120 shares for the three and nine month periods ended September 30, 2020, respectively, and 295,526 and 285,975 for the three and nine month periods ended September 30, 2019, respectively, from the diluted loss per share calculations. The Company may settle the conversion of the Notes in cash, shares of the Company's common stock or any combination thereof at its election. For the Notes, the number of shares of the Company's common stock issuable at the conversion price of $22.3125 per share would be 9,277,305 shares if the Company elected to settle the conversion wholly in shares. See Note 6 "Debt". Due to anti-dilutive effects, the Company excluded potential convertible shares due under the Notes of 9,277,305 for the three and nine month periods ended September 30, 2020, respectively, and 9,277,305 and 4,247,850 for the three and nine month periods ended September 30, 2019, respectively, from the diluted loss per share calculations. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationFinancial 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 Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold on August 10, 2020. The remaining Brake Systems business is no longer a reportable segment due to immateriality. The accounting policies for the reportable segments are the same as those described in Note 2 "Summary of Significant Accounting Policies" included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 21, 2020. Loss Before Income Taxes Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Electronics $ (80) $ (90) $ (202) $ (281) Brake Systems (3) (17) (37) (54) Segment operating loss (83) (107) (239) (335) Corporate and other (20) (15) (51) (53) Loss on divestiture and assets impairment charge, net (24) — (91) — Interest and other non-operating items, net (4) 2 (7) 8 Loss from equity method investment (1) (16) (39) (50) Loss before income taxes $ (132) $ (136) $ (427) $ (430) |
Relationship with Former Parent
Relationship with Former Parent and Related Entities | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Relationship with Former Parent and Related Entities | Relationship with Former Parent and Related Entities 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. The Company recognized less than $1 million of expense under the TSA for the three and nine month periods ended September 30, 2020, and $1 million and $4 million of expense under the TSA for the three and nine month periods ended September 30, 2019 respectively. The Company recognized less than $1 million of income under the TSA for the three and nine month periods ended September 30, 2020 and 2019. 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 former 51% owned subsidiary). Related party sales amounted to $18 million and $48 million for the three and nine month periods ended September 30, 2020, respectively and $24 million and $77 million for the three and nine month periods ended September 30, 2019, respectively. Related Party Balances Amounts due to and due from related parties are summarized in the below table: Related Party As of (Dollars in millions) September 30, 2020 December 31, 2019 Related party receivable $ 6 $ 11 Related party payables 1 3 Related party short-term debt 14 1 Related party long-term debt 103 — 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. |
Factoring
Factoring | 9 Months Ended |
Sep. 30, 2020 | |
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 nine months ended September 30, 2020 and 2019, the Company has entered into arrangements with financial institutions and sold $38 million and $59 million, respectively, of trade receivables without recourse and $10 million and $37 million, respectively, of bank notes without recourse, which qualify as sales as all rights to the trade and notes receivable have passed to the financial institution. As of September 30, 2020, the Company had $7 million of trade notes receivables which remain outstanding and will mature within the fourth quarter of 2020. 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Segments | 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 |
Basis of Accounting | 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, 2019 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 21, 2020. 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 |
Accounting for Credit Losses | Accounting for credit losses The Company has evaluated the available adoption options of common credit loss methods that are acceptable as per FASB Accounting Standards Codification Topic 326, Credit Losses. The Company adopted the available Loss-rate method where the impairment is calculated using an estimated loss rate and multiplying it by the asset’s amortized cost at the balance sheet date. This method appropriately reflects the Company´s risk pattern in relation to its accounts receivables. The key components of the Company’s Loss-rate model are as follows: • A list of the Company's customers credit rating and credit default risk rate from Bloomberg. • Actual write-offs or reversals of previous write-offs of accounts receivables. • Evaluation of other unusual facts and circumstances which could impact the credit loss rate, such as risk of bankruptcy or potential collectability issues. The Company’s credit loss model includes the Company’s customer list. The customer list captures the existing customers. The list is put into a Bloomberg data query to generate customers short-term credit rating. The credit default risk rate is used to calculate the credit loss rate or estimated loss rate. |
New Accounting Standards | New Accounting Standards Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s condensed consolidated financial statements. Adoption of New Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses ( Topic 326 ), Measurement of Credit Losses on Financial Instruments , which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and earlier adoption is permitted for annual periods beginning after December 15, 2018. The Company adopted ASU 2016-13 effective January 1, 2020 and applied a loss rate model to compute the expected credit loss allowance. The adoption of ASU 2016-13 did not have a material impact on the Company's condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18 Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606, which (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under ASC Topic 606, Revenue from Contracts with Customers (Topic 606) , when the collaborative arrangement participant is a customer in the context of a unit of account, (2) adds unit-of-account guidance in Topic 808 to align with Topic 606 when an entity is assessing whether the collaborative arrangement, or a part of the arrangement, is within the scope of Topic 606, (3) precludes presenting transactions together with revenue when those transactions involve collaborative arrangement participants that are not directly related to third parties and are not customers. The Company adopted ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-18 did not have a material impact on the Company's 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 adopted ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. 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 financial statements. Accounting Standards Issued But Not Yet Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company plans to adopt ASU 2019-12 as of January 1, 2021. The Company has concluded that the pending adoption of ASU 2019-12 will not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on the Company's condensed consolidated financial statements. |
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. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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. Net Sales by Region Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 85 $ — $ 85 $ 80 $ 77 $ 157 Americas 123 13 136 133 14 147 Europe 150 — 150 158 — 158 Total net sales $ 358 $ 13 $ 371 $ 371 $ 91 $ 462 Net Sales by Region Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Asia $ 202 $ 24 $ 226 $ 259 $ 229 $ 488 Americas 283 33 316 432 46 478 Europe 376 — 376 480 — 480 Total net sales $ 861 $ 57 $ 918 $ 1,171 $ 275 $ 1,446 Net Sales by Products Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 188 $ — $ 188 $ 193 $ — $ 193 Active Safety products 170 — 170 178 — 178 Brake Systems — 13 13 — 91 91 Total net sales $ 358 $ 13 $ 371 $ 371 $ 91 $ 462 Net Sales by Products Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (Dollars in millions) Electronics Brake Systems Total Electronics Brake Systems Total Restraint Control Systems $ 450 $ — $ 450 $ 617 $ — $ 617 Active Safety products 411 — 411 554 — 554 Brake Systems — 57 57 — 275 275 Total net sales $ 861 $ 57 $ 918 $ 1,171 $ 275 $ 1,446 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the estimated fair values of identifiable acquired assets and assumed liabilities: Assets As of July 1, 2020 Cash and cash equivalents $ 4 Receivable, net 12 Property, plant and equipment, net 3 Operating lease right-of-use assets 10 Goodwill 23 Total assets $ 52 Tax payable 2 Accrued liabilities 3 Operating lease non-current liabilities 10 Total liabilities $ 15 Net assets acquired $ 37 |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Major Classes of Assets and Liabilities Held for Sale | VNBS The major classes of assets and liabilities held for sale were as follows: (Dollars in millions) As of Assets held for sale December 31, 2019 Cash and cash equivalents $ 35 Receivables, net 58 Inventories, net 17 Property, plant and equipment, net 126 Intangible assets, net 66 Other current assets 15 Total assets held for sale $ 317 Liabilities held for sale Accounts payable 50 Accrued expenses 20 Related party short-term debt 12 Pension liability 8 Other current liabilities 28 Total liabilities held for sale $ 118 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s short and long-term debt consists of the following: As of (Dollars in millions) September 30, 2020 December 31, 2019 Short-Term Debt: Short-term borrowings $ 3 $ 3 Long-Term Debt: 4.00% Convertible Senior Notes due 2024 (Carrying value) 167 160 Other long-term borrowings 6 8 Total Debt $ 176 $ 171 The following table presents the outstanding principal amount and carrying value of the Notes: 4.00% Convertible Senior Notes due 2024 As of (Dollars in millions) September 30, 2020 December 31, 2019 Principal amount (face value) $ 207 $ 207 Unamortized issuance cost (4) (5) Unamortized debt discount (36) (42) Net Carrying value $ 167 $ 160 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories are stated at the lower of cost (according to first-in-first-out basis, "FIFO") and net realizable value. The components of inventories were as follows: As of (Dollars in millions) September 30, 2020 December 31, 2019 Raw materials $ 93 $ 99 Work in progress 11 8 Finished products 48 62 Inventories 152 169 Inventory valuation reserve (28) (25) Total inventories, net of reserve $ 124 $ 144 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | As of (Dollars in millions) September 30, 2020 December 31, 2019 Operating related accruals $ 79 $ 43 Employee related accruals 88 76 Customer pricing accruals 22 39 Product related liabilities 1 19 15 Other accruals 22 19 Total Accrued Expenses $ 230 $ 192 1 As of September 30, 2020 and December 31, 2019, $10 million and $8 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) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of components of net periodic benefit cost | The Company’s net periodic benefit costs for plans for the three and nine months ended September 30, 2020 and 2019 were as follows: Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Service cost $ 1 $ 1 $ 3 $ 4 Interest cost 1 — 2 1 Expected return on plan assets (1) (1) (2) (1) Net periodic benefit cost $ 1 $ — $ 3 $ 4 |
Contingent Liabilities (Tables)
Contingent Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 unaudited Condensed Consolidated Balance Sheet. Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Reserve at beginning of the period $ 18 $ 14 $ 15 $ 16 Change in reserve 2 — 8 1 Cash payments (1) — (4) (3) Reserve at end of the period $ 19 $ 14 $ 19 $ 14 |
Loss per share (Tables)
Loss per share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted loss per share for the three and nine month periods ended September 30, 2020 and 2019. Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions, except per share amounts) 2020 2019 2020 2019 Numerator: Basic and diluted: Net loss attributable to Veoneer $ (132) $ (133) $ (454) $ (403) Denominator: Basic: Weighted average number of shares outstanding (in millions) 111.59 111.4 111.55 98.32 Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) 1 111.59 111.4 111.55 98.32 Basic loss per share $ (1.18) $ (1.20) $ (4.07) $ (4.10) Diluted loss per share $ (1.18) $ (1.20) $ (4.07) $ (4.10) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of (loss)/income before income taxes | Loss Before Income Taxes Three Months Ended September 30 Nine Months Ended September 30 (Dollars in millions) 2020 2019 2020 2019 Electronics $ (80) $ (90) $ (202) $ (281) Brake Systems (3) (17) (37) (54) Segment operating loss (83) (107) (239) (335) Corporate and other (20) (15) (51) (53) Loss on divestiture and assets impairment charge, net (24) — (91) — Interest and other non-operating items, net (4) 2 (7) 8 Loss from equity method investment (1) (16) (39) (50) Loss before income taxes $ (132) $ (136) $ (427) $ (430) |
Relationship with Former Pare_2
Relationship with Former Parent and Related Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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: Related Party As of (Dollars in millions) September 30, 2020 December 31, 2019 Related party receivable $ 6 $ 11 Related party payables 1 3 Related party short-term debt 14 1 Related party long-term debt 103 — |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | Aug. 10, 2020USD ($) | May 28, 2019USD ($)$ / sharesshares | Jun. 29, 2018 | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Feb. 03, 2020USD ($)transaction | Oct. 30, 2019 |
Restructuring Cost and Reserve [Line Items] | |||||||
Number of operating segments | segment | 2 | ||||||
Shares issued in public offering (in shares) | shares | 24,000,000 | ||||||
Public offering price (in dollars per share) | $ / shares | $ 17.50 | ||||||
Issuance of common stock | $ 403,000,000 | $ 0 | $ 405,000,000 | ||||
Proceeds from divestitures | $ 198,000,000 | $ 0 | |||||
Honda VNBS Product Line | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Ownership percentage in joint venture | 51.00% | ||||||
Disposal group, including discontinued operation, consideration | $ 176,000,000 | ||||||
Number of transactions | transaction | 2 | ||||||
Veoneer Nissin Brakes Systems | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Disposal group, including discontinued operation, consideration | $ 1 | ||||||
Proceeds from divestitures | $ 22,000,000 | ||||||
4% Convertible Senior Dotes due 2024 | Convertible Senior Notes | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Aggregate principal amount of debt | $ 207,000,000 | ||||||
Stated interest rate | 4.00% | 4.00% | |||||
Net proceeds | $ 200,000,000 | ||||||
Over-Allotment Option | 4% Convertible Senior Dotes due 2024 | Convertible Senior Notes | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Aggregate principal amount of debt | $ 27,000,000 | ||||||
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_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 | May 20, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Payments for legal settlements | $ 20 | |||||||||
Net sales | $ 371 | $ 462 | $ 918 | $ 1,446 | ||||||
Operating lease right-of-use assets | $ 86 | $ 100 | 86 | 86 | ||||||
Accounting Standards Update 2016-02 [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Operating Lease, liability | $ 75 | |||||||||
Operating lease right-of-use assets | $ 75 | |||||||||
Other Current Liabilities | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Deferred income | $ 15 | $ 15 | 15 | |||||||
Research, Development and Implementation of Change | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Net sales | $ 65 | |||||||||
Future Software Development | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Net sales | $ 11 | |||||||||
Research, Development and Software Adjustment Agreement | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Net sales | $ 76 | |||||||||
Engineering Services | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Reimbursements from customers | $ 82 | |||||||||
Revenue from Contract with Customer | Customer Concentration Risk | Four Largest Customers [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Concentration risk, percentage | 55.00% | 61.00% | 57.00% | 59.00% | ||||||
Accounts Receivable | Customer Concentration Risk | Four Largest Customers [Member] | ||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||
Concentration risk, percentage | 41.00% | 39.00% |
Revenue - Revenue Disaggregated
Revenue - Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 371 | $ 462 | $ 918 | $ 1,446 |
Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 188 | 193 | 450 | 617 |
Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 170 | 178 | 411 | 554 |
Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 13 | 91 | 57 | 275 |
Electronics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 358 | 371 | 861 | 1,171 |
Electronics | Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 188 | 193 | 450 | 617 |
Electronics | Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 170 | 178 | 411 | 554 |
Electronics | Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 13 | 91 | 57 | 275 |
Brake Systems | Operating Segments | Restraint Control Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | Operating Segments | Active Safety products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Brake Systems | Operating Segments | Brake Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 13 | 91 | 57 | 275 |
Asia | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 85 | 157 | 226 | 488 |
Asia | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 85 | 80 | 202 | 259 |
Asia | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 77 | 24 | 229 |
Americas | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 136 | 147 | 316 | 478 |
Americas | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 123 | 133 | 283 | 432 |
Americas | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 13 | 14 | 33 | 46 |
Europe | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 150 | 158 | 376 | 480 |
Europe | Electronics | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 150 | 158 | 376 | 480 |
Europe | Brake Systems | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 0 | $ 0 | $ 0 | $ 0 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) kr in Millions, $ in Millions | Jul. 01, 2020USD ($)numberOfSoftwareEngineersnumberOfBusinessUnits | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020SEK (kr) | Mar. 31, 2020USD ($) | Mar. 31, 2020SEK (kr) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 314 | $ 314 | $ 290 | |||||||
Acquisition of intangible assets | 10 | $ 0 | ||||||||
Net sales | $ 371 | $ 462 | 918 | $ 1,446 | ||||||
Zenuity | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash contribution to joint venture | $ 9 | kr 90 | $ 16 | kr 150 | ||||||
Intellectual Property | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition of intangible assets | $ 10 | |||||||||
Finite-lived intangible asset, useful life | 8 years | |||||||||
Intellectual Property | License | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Net sales | 10 | |||||||||
Zenuity, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill | $ 23 | |||||||||
Business combination, acquisition related costs | $ 1 | |||||||||
Zenuity, Inc | Zenuity | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash contribution to joint venture | $ 37 | |||||||||
Number of software engineers | numberOfSoftwareEngineers | 200 | |||||||||
Number of business units | numberOfBusinessUnits | 2 |
Business Combinations - Schedul
Business Combinations - Schedule of Business Acquisitions by Acquisition (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jul. 01, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 314 | $ 290 | |
Zenuity, Inc | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 4 | ||
Receivable, net | 12 | ||
Property, plant and equipment, net | 3 | ||
Operating lease right-of-use assets | 10 | ||
Goodwill | 23 | ||
Total assets | 52 | ||
Tax payable | 2 | ||
Accrued liabilities | 3 | ||
Operating lease non-current liabilities | 10 | ||
Total liabilities | 15 | ||
Net assets acquired | $ 37 |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups - Narrative (Details) - USD ($) | Aug. 10, 2020 | Oct. 30, 2019 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Feb. 03, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Assets impairment charge | $ 144,000,000 | $ 168,000,000 | $ 0 | |||
Proceeds from divestitures | $ 198,000,000 | $ 0 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Honda VNBS Product Line | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal group, including discontinued operation, consideration | $ 176,000,000 | |||||
Disposal group, not discontinued operation, gain (loss) on disposal, net | $ 175,000,000 | |||||
Disposal group, not discontinued operation, gain (loss) on disposal, net of closing costs | $ 77,000,000 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Veoneer Nissin Brakes Systems | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal group, including discontinued operation, consideration | $ 1 | |||||
Proceeds from divestitures | $ 22,000,000 |
Discontinued Operations and D_3
Discontinued Operations and Disposal Groups - Disposal Group, Including Discontinued Operations (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Honda VNBS Product Line $ in Millions | Dec. 31, 2019USD ($) |
Assets held for sale | |
Cash and cash equivalents | $ 35 |
Receivables, net | 58 |
Inventories, net | 17 |
Property, plant and equipment, net | 126 |
Intangible assets, net | 66 |
Other current assets | 15 |
Total assets held for sale | 317 |
Liabilities held for sale | |
Accounts payable | (50) |
Accrued expenses | 20 |
Related party short-term debt | 12 |
Pension liability | 8 |
Other current liabilities | 28 |
Total liabilities held for sale | $ (118) |
Debt - Schedule of Short and Lo
Debt - Schedule of Short and Long Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | May 28, 2019 |
Short-Term Debt: | |||
Short-term borrowings | $ 3 | $ 3 | |
Long-Term Debt: | |||
Total Debt | 176 | 171 | |
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | |||
Long-Term Debt: | |||
4.00% Convertible Senior Notes due 2024 (Carrying value) | $ 167 | 160 | |
Stated interest rate | 4.00% | 4.00% | |
Secured Debt | Other Long-Term Borrowings | |||
Long-Term Debt: | |||
4.00% Convertible Senior Notes due 2024 (Carrying value) | $ 6 | $ 8 |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 28, 2019USD ($)tradingDay$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||
Short-term borrowings | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 | |||
Interest expense | $ 4,000,000 | $ 4,000,000 | $ 13,000,000 | $ 6,000,000 | ||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Trading days | tradingDay | 20 | |||||
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 4.00% | 4.00% | 4.00% | |||
Aggregate principal amount of debt | $ 207,000,000 | |||||
Net proceeds | 200,000,000 | |||||
Debt issuance costs | $ 7,000,000 | |||||
Amortization period of interest expense | 5 years | |||||
Initial conversion price (in dollars per share) | $ / shares | $ 22.3125 | |||||
Threshold percentage of stock price trigger | 130.00% | |||||
Redemption price | 100.00% | |||||
Effective interest rate | 10.00% | 10.00% | ||||
Equity component of notes | $ 46,000,000 | $ 46,000,000 | ||||
Convertible debt fair value | $ 198,000,000 | $ 198,000,000 | ||||
Debt instrument, convertible, conversion ratio | 0.0448179000 | |||||
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Threshold percentage of stock price trigger | 98.00% | |||||
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, convertible, conversion ratio | 0.0571428000 |
Debt - Schedule of Notes (Detai
Debt - Schedule of Notes (Details) - Convertible Senior Notes - 4% Convertible Senior Dotes due 2024 - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Principal amount (face value) | $ 207 | $ 207 |
Unamortized issuance cost | (4) | (5) |
Unamortized debt discount | (36) | (42) |
4% Convertible Senior Notes due 2024 (Carrying value) | $ 167 | $ 160 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020USD ($)contract | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)contract | Sep. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2017USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
(Losses) and gains on derivative financial instruments recognized in other non-operating items (less than) | $ 2 | $ 1 | $ 4 | $ 1 | |||
Other long-term investments | $ 9 | $ 9 | $ 9 | $ 9 | |||
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 | 0 | |||||
Foreign exchange forward contracts | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Notional value | $ 198 | $ 198 | 291 | ||||
Derivative asset | 3 | 3 | 1 | ||||
Fair Value Measured at Net Asset Value Per Share | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment | $ 12 | 12 | $ 10 | $ 15 | |||
Distributions from fund | $ 3 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 0 | $ 3 | $ 26 | $ (1) |
Net discrete (benefit) expense related to changes in valuation allowance | $ 2 | $ 1 | $ 17 | $ 6 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 93 | $ 99 |
Work in progress | 11 | 8 |
Finished products | 48 | 62 |
Inventories | 152 | 169 |
Inventory valuation reserve | (28) | (25) |
Total inventories, net of reserve | $ 124 | $ 144 |
Equity Method Investment - Narr
Equity Method Investment - Narrative (Details) kr in Millions, $ in Millions | Jul. 01, 2020USD ($)numberOfSoftwareEngineersnumberOfBusinessUnitsnumberOfInstallments | Jul. 01, 2020SEK (kr)numberOfSoftwareEngineersnumberOfBusinessUnitsnumberOfInstallments | Sep. 30, 2020USD ($) | Sep. 30, 2020SEK (kr) | Jun. 30, 2020USD ($) | Jun. 30, 2020SEK (kr) | Mar. 31, 2020USD ($) | Mar. 31, 2020SEK (kr) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Apr. 02, 2020 | Dec. 31, 2019USD ($) |
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Impairment charges | $ 24 | ||||||||||||
Loss from equity method investment | $ 1 | $ 16 | 39 | $ 50 | |||||||||
Equity investments after consideration of foreign exchange movements | 129 | 129 | $ 87 | ||||||||||
Zenuity | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership percentage in joint venture | 50.00% | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||
Cash contribution to joint venture | $ 9 | kr 90 | $ 16 | kr 150 | |||||||||
Proceeds from dividends received | 35 | kr 327 | |||||||||||
Loss from equity method investment | 1 | $ 16 | 39 | $ 50 | |||||||||
Equity investments after consideration of foreign exchange movements | $ 129 | $ 129 | $ 87 | ||||||||||
Zenuity | Zenuity, Inc | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Cash contribution to joint venture | $ 37 | ||||||||||||
Number of software engineers | numberOfSoftwareEngineers | 200 | 200 | |||||||||||
Number of business units | numberOfBusinessUnits | 2 | 2 | |||||||||||
Zenuity | Intellectual Property | Zenuity, Inc | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Intellectual property acquired, consideration | $ 114 | kr 1,067 | |||||||||||
Number of annual installment payments | numberOfInstallments | 10 | 10 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
Operating related accruals | $ 79 | $ 43 |
Employee related accruals | 88 | 76 |
Customer pricing accruals | 22 | 39 |
Product related liabilities | 19 | 15 |
Other accruals | 22 | 19 |
Total Accrued Expenses | 230 | 192 |
Affiliated Entity | ||
Loss Contingencies [Line Items] | ||
Product related liabilities | $ 10 | $ 8 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | $ 3 | $ 4 |
Interest cost | 1 | 0 | 2 | 1 |
Expected return on plan assets | (1) | (1) | (2) | (1) |
Net periodic benefit cost | $ 1 | $ 0 | $ 3 | $ 4 |
Stock Incentive Plan - Narrativ
Stock Incentive Plan - Narrative (Details) - USD ($) $ in Millions | Jun. 29, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage grantee may earn based on achievement of specific targets | 100.00% | ||||
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) | 777,466 | ||||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted (in shares) | 415,381 | ||||
RSUs and PSs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grant date fair value | $ 11 | ||||
Stock-based compensation expense | $ 1 | $ 2 | $ 5 | $ 5 | |
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) | 1,500,000 | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage grantee may earn based on achievement of specific targets | 0.00% | ||||
Maximum | |||||
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Product Warranty Accrual [Roll Forward] | ||||
Reserve at beginning of the period | $ 18 | $ 14 | $ 15 | $ 16 |
Change in reserve | 2 | 0 | 8 | 1 |
Cash payments | (1) | 0 | (4) | (3) |
Reserve at end of the period | $ 19 | $ 14 | $ 19 | $ 14 |
Contingent Liabilities - Narrat
Contingent Liabilities - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | ||
Product related liabilities | $ 19 | $ 15 |
Guarantee obligations | 14 | 7 |
Affiliated Entity | ||
Loss Contingencies [Line Items] | ||
Product related liabilities | $ 10 | $ 8 |
Loss per share - Computation of
Loss per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic and diluted: | ||||
Net loss attributable to Veoneer | $ (132) | $ (133) | $ (454) | $ (403) |
Denominator: | ||||
Basic: Weighted average number of shares outstanding (in millions) (in shares) | 111,590 | 111,400 | 111,550 | 98,320 |
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares) | 111,590 | 111,400 | 111,550 | 98,320 |
Basic loss per share (in dollars per share) | $ (1.18) | $ (1.20) | $ (4.07) | $ (4.10) |
Diluted loss per share (in dollars per share) | $ (1.18) | $ (1.20) | $ (4.07) | $ (4.10) |
Loss per share - Narrative (Det
Loss per share - Narrative (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 28, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Maximum number of shares issuable if debt was converted (in shares) | 9,277,305 | 9,277,305 | |||
Stock Compensation Plan | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares excluded from calculation (in shares) | 963,171 | 295,526 | 741,120 | 285,975 | |
Convertible Debt Securities | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares excluded from calculation (in shares) | 9,277,305 | 9,277,305 | 9,277,305 | 4,247,850 | |
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Initial conversion price (in dollars per share) | $ 22.3125 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | $ (103) | $ (122) | $ (290) | $ (388) |
Loss on divestiture and assets impairment charge, net | (24) | 0 | (91) | 0 |
Interest and other non-operating items, net | (4) | 2 | (7) | 8 |
Loss from equity method investment | (1) | (16) | (39) | (50) |
Loss before income taxes | (132) | (136) | (427) | (430) |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | (83) | (107) | (239) | (335) |
Corporate and other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | (20) | (15) | ||
Electronics | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | (80) | (90) | (202) | (281) |
Brake Systems | Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | $ (3) | $ (17) | (37) | (54) |
Corporate and other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating income (loss) | $ (51) | $ (53) |
Relationship with Former Pare_3
Relationship with Former Parent and Related Entities - Narrative (Details) kr in Millions, $ in Millions | Jul. 01, 2020SEK (kr) | Jul. 01, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Zenuity | Zenuity, Inc | Intellectual Property | ||||||
Related Party Transaction [Line Items] | ||||||
Intellectual property acquired, consideration | kr 1,067 | $ 114 | ||||
Autoliv | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | $ 18 | $ 24 | $ 48 | $ 77 | ||
Autoliv | Transition Services Agreement | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Expense under the TSA | $ 1 | 1 | $ 1 | 4 | ||
Income under the TSA | $ 1 | $ 1 | ||||
Veoneer Nissin Brakes Systems | ||||||
Related Party Transaction [Line Items] | ||||||
Minority ownership percentage | 49.00% | 49.00% | ||||
Veoneer Nissin Brakes Systems | Autoliv | Transition Services Agreement | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Majority ownership percentage | 51.00% | 51.00% |
Relationship with Former Pare_4
Relationship with Former Parent and Related Entities - Summary of Amount Due to and from Related Parties (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Related party receivable | $ 6 | $ 11 |
Related party payables | 1 | 3 |
Related party short-term debt | 14 | 1 |
Related party long-term debt | $ 103 | $ 0 |
Factoring (Details)
Factoring (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Receivables [Abstract] | ||
Sale of trade receivables | $ 38 | $ 59 |
Sale of bank notes without recourse | 10 | $ 37 |
Trade notes receivables | $ 7 |