QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging Growth Company |
Page | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Net sales | Note 3 | $ | $ | $ | $ | ||||||||||||
Cost of sales | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Gross profit | |||||||||||||||||
Selling, general and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Research, development and engineering expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Amortization of intangibles | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Other income, net | |||||||||||||||||
Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Loss from equity method investment | Note 9 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Interest income | |||||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Other non-operating items, net | |||||||||||||||||
Loss before income taxes | Note 15 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Income tax benefit / (expense) | Note 7 | ( | ) | ( | ) | ||||||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Less: Net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net loss attributable to controlling interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Net loss per share - basic | Note 14 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Net loss per share - diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Weighted average number of shares outstanding, (in millions) | |||||||||||||||||
Weighted average number of shares outstanding, assuming dilution (in millions) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Other comprehensive income (loss), before tax: | |||||||||||||||
Change in cumulative translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net change in cash flow hedges | |||||||||||||||
Pension liability | ( | ) | ( | ) | |||||||||||
Other comprehensive income (loss), before tax | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Expense for taxes | |||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Less: Comprehensive loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive loss attributable to controlling interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(unaudited) | |||||||||
June 30, 2019 | December 31, 2018 | ||||||||
Assets | |||||||||
Cash and cash equivalents | $ | $ | |||||||
Short-term investments | |||||||||
Receivables, net | |||||||||
Inventories, net | Note 8 | ||||||||
Related party receivables | Note 16 | ||||||||
Prepaid expenses | |||||||||
Other current assets | |||||||||
Total current assets | |||||||||
Property, plant and equipment, net | |||||||||
Operating lease right-of-use assets | — | ||||||||
Equity method investment | Note 9 | ||||||||
Goodwill | |||||||||
Intangible assets, net | |||||||||
Deferred tax assets | |||||||||
Related party notes receivables | Note 16 | ||||||||
Investments | |||||||||
Other non-current assets | |||||||||
Total assets | $ | $ | |||||||
Liabilities and equity | |||||||||
Accounts payable | $ | $ | |||||||
Short-term debt | Note 5 | ||||||||
Related party payables | Note 16 | ||||||||
Accrued expenses | Note 10 | ||||||||
Income tax payable | |||||||||
Related party short-term debt | |||||||||
Other current liabilities | |||||||||
Total current liabilities | |||||||||
4.00% Convertible Senior Notes due 2024 | Note 5 | ||||||||
Related party long-term debt | Note 16 | ||||||||
Pension liability | Note 11 | ||||||||
Deferred tax liabilities | |||||||||
Operating lease non-current liabilities | Note 4 | — | |||||||
Finance lease non-current liabilities | Note 4 | ||||||||
Other non-current liabilities | |||||||||
Total non-current liabilities | |||||||||
Equity | |||||||||
Common stock (par value $1.00, 325 million shares authorized, 111 million and 87 million shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively) | |||||||||
Additional paid-in capital | |||||||||
Accumulated deficit | ( | ) | ( | ) | |||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||||
Total equity | |||||||||
Non-controlling interest | |||||||||
Total equity and non-controlling interest | |||||||||
Total liabilities, equity and non-controlling interest | $ | $ |
Six months ended June 30, 2019 | |||||||||||||||||||||||
Equity attributable to | |||||||||||||||||||||||
Common Stock | Additional Paid In Capital | Accumulated deficit | Accumulated Other Comprehensive Loss | Non-controlling Interest | Total | ||||||||||||||||||
Balance at beginning of period | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||
Comprehensive Income (Loss): | |||||||||||||||||||||||
Net loss | — | — | ( | ) | — | ( | ) | ( | ) | ||||||||||||||
Foreign currency translation | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Stock based compensation expense | — | — | — | — | |||||||||||||||||||
Issuance of common stock | — | — | — | ||||||||||||||||||||
Purchase of minority interest | — | ( | ) | — | — | ||||||||||||||||||
Equity component of issuance of convertible notes, net of taxes (Note 5) | — | — | — | — | |||||||||||||||||||
Total Comprehensive Income (Loss) | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Balance at end of period | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ |
Six months ended June 30, 2018 | |||||||||||||||||||||||
Equity attributable to | |||||||||||||||||||||||
Common Stock | Additional Paid In Capital | Net Former Parent Investment | Accumulated Other Comprehensive Loss | Non-controlling Interest | Total | ||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||
Comprehensive Income (Loss): | |||||||||||||||||||||||
Net loss | — | — | ( | ) | — | ( | ) | ( | ) | ||||||||||||||
Foreign currency translation | — | ( | ) | ( | ) | ||||||||||||||||||
Net change in cash flow hedges | — | — | — | — | |||||||||||||||||||
Pension liability | — | — | — | ( | ) | — | ( | ) | |||||||||||||||
Reclassification of Net Former Parent investment and issuance of ordinary shares in connection with separation | ( | ) | — | — | |||||||||||||||||||
Total Comprehensive Income (Loss) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Net transfers from Former Parent | — | — | — | ( | ) | ||||||||||||||||||
Balance at end of period | $ | $ | $ | $ | ( | ) | $ | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Operating activities | |||||||
Net loss | $ | ( | ) | $ | ( | ) | |
Depreciation and amortization | |||||||
Undistributed loss from equity method investments | |||||||
Stock-based compensation | |||||||
Contingent consideration write-down | ( | ) | |||||
Deferred income taxes | ( | ) | |||||
Other, net | ( | ) | |||||
Change in operating assets and liabilities: | |||||||
Accounts payable | ( | ) | ( | ) | |||
Related party receivables and payables, net | ( | ) | |||||
Income taxes | ( | ) | |||||
Accrued expenses | |||||||
Other current assets and liabilities, net | ( | ) | ( | ) | |||
Receivables, gross | |||||||
Inventories, gross | ( | ) | |||||
Prepaid expenses | ( | ) | |||||
Net cash used in operating activities | ( | ) | ( | ) | |||
Investing activities | |||||||
Net decrease in related party notes receivable | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Equity method investment | ( | ) | ( | ) | |||
Short-term investments mature into cash | |||||||
Long term investments | ( | ) | |||||
Proceeds from sale of property, plant and equipment | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Financing activities | |||||||
Cash provided at separation by Former Parent | |||||||
Proceeds from short-term debt | |||||||
Net transfers from Former Parent | |||||||
Proceeds from related party short-term debt | |||||||
Issuance of common stock | |||||||
Proceeds from long-term debt | |||||||
Decrease in related party long-term debt | ( | ) | |||||
Net cash provided by financing activities | |||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | |||||
Increase in cash and cash equivalents | |||||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ |
(unaudited) | (unaudited) | ||||||||||
Balance Sheet (Dollars in millions) | Balance at December 31, 2018 | Adjustments due to ASU 2016-02 | Balance at January 1, 2019 | ||||||||
Assets | |||||||||||
Right-of-use assets, operating leases | $ | — | $ | $ | |||||||
Current liabilities | |||||||||||
Other current liabilities | — | ||||||||||
Non-current liabilities | |||||||||||
Operating lease liabilities - non-current | — | ||||||||||
Equity | |||||||||||
Accumulated deficit | ( | ) | ( | ) |
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||||||||||||||||||
(Dollars in millions) | Electronics | Brake Systems | Total | Electronics | Brake Systems | Total | |||||||||||||||||
Asia | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Americas | |||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||||||||||||||
(Dollars in millions) | Electronics | Brake Systems | Total | Electronics | Brake Systems | Total | |||||||||||||||||
Asia | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Americas | |||||||||||||||||||||||
Europe | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ | $ | $ |
Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | ||||||||||||||||||||||
(Dollars in millions) | Electronics | Brake Systems | Total | Electronics | Brake Systems | Total | |||||||||||||||||
Restraint Control Systems | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Active Safety products | |||||||||||||||||||||||
Brake Systems | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | ||||||||||||||||||||||
(Dollars in millions) | Electronics | Brake Systems | Total | Electronics | Brake Systems | Total | |||||||||||||||||
Restraint Control Systems | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Active Safety products | |||||||||||||||||||||||
Brake Systems | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ | $ | $ |
(Dollars in millions) | Three months ended June 30, 2019 | Six months ended June 30, 2019 | |||||
Operating lease cost | $ | $ | |||||
Finance lease cost | |||||||
Amortization of right-of-use assets | |||||||
Interest on lease liabilities | |||||||
Total finance lease cost | |||||||
Short-term lease cost | |||||||
Variable lease cost | |||||||
Total lease cost | $ | $ |
Supplemental Cash Flows Information | Six months ended June 30, 2019 | ||
(Dollars in millions) | |||
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows used for operating leases | $ | ||
Operating cash flows used for finance leases | |||
Financing cash flows used for finance leases | |||
Right-of-use assets obtained in exchange for new lease obligations: | |||
Operating leases | |||
Finance leases |
As of | ||
(Lease term and discount rate) | June 30, 2019 | |
Weighted-average remaining lease term | ||
Operating Leases | ||
Finance Leases | ||
Weighted-average discount rate | ||
Operating leases | % | |
Finance leases | % |
(Dollars in millions) | Operating Leases | Finance Leases | |||||
2019 (excluding the six months ended June 30, 2019) | $ | $ | |||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
Thereafter | |||||||
Total lease payments | |||||||
Less imputed interest | |||||||
Total lease liabilities | $ | $ |
(Dollars in millions) | Operating Leases | Finance Leases | |||||
Other current liabilities | $ | $ | |||||
Lease liabilities - non current | |||||||
Related party leases | |||||||
Total lease liabilities | $ | $ |
As of | ||||||||
(Dollars in millions) | June 30, 2019 | December 31, 2018 | ||||||
Short-Term Debt: | ||||||||
Short-term borrowings | $ | $ | ||||||
Long-Term Debt: | ||||||||
4.00% Convertible Senior Notes due 2024 (Carrying value) | $ | $ | ||||||
Total Debt | $ | $ |
4.00% Convertible Senior Notes due 2024 | As of | |||||||
(Dollars in millions) | June 30, 2019 | December 31, 2018 | ||||||
Principal amount (face value) | $ | $ | ||||||
Unamortized issuance cost | ( | ) | ||||||
Unamortized debt discount | ( | ) | ||||||
Net Carrying value | $ | $ |
As of | |||||||
(Dollars in millions) | June 30, 2019 | December 31, 2018 | |||||
Raw materials | $ | $ | |||||
Work in progress | |||||||
Finished products | |||||||
Inventories | |||||||
Inventory valuation reserve | ( | ) | ( | ) | |||
Total inventories, net of reserve | $ | $ |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net sales | $ | $ | $ | $ | |||||||||||
Gross profit | |||||||||||||||
Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) |
As of | |||||||
(Dollars in millions) | June 30, 2019 | December 31, 2018 | |||||
Operating related accruals | $ | $ | |||||
Employee related accruals | |||||||
Customer pricing accruals | |||||||
Product related liabilities1 | |||||||
Other accruals | |||||||
Total Accrued Expenses | $ | $ |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Service cost | $ | $ | $ | $ | |||||||||||
Interest cost | |||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | |||||||||
Net periodic benefit cost | $ | $ | $ | $ |
Country | Name of Defined Benefit Plans |
Germany | Direct Pension Promises Plan |
India | Gratuity Plan |
Japan | Retirement Allowances Plan |
Defined Benefit Corporate Plan | |
South Korea | Severance Pay Plan (statutory plan) |
Country | Name of Defined Benefit Plans |
Sweden | ITP plan |
U.S. | Autoliv ASP, Inc. Pension Plan |
Autoliv ASP, Inc. Excess Pension Plan | |
Autoliv ASP, Inc. Supplemental Pension Plan |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Reserve at beginning of the period | $ | $ | $ | $ | |||||||||||
Change in reserve | |||||||||||||||
Cash payments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Reserve at end of the period | $ | $ | $ | $ |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||
(Dollars in millions, except per share amounts) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Numerator: | |||||||||||||||
Basic and diluted: | |||||||||||||||
Net loss attributable to Veoneer | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Denominator: | |||||||||||||||
Basic: Weighted average number of shares outstanding (in millions) | |||||||||||||||
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1 | |||||||||||||||
Basic loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Loss Before Income Taxes | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||
(Dollars in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Electronics | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Brake Systems | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Segment operating loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Corporate and other | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest and other non-operating items, net | |||||||||||||||
Loss from equity method investment | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Related Party | As of | ||||||
(Dollars in millions) | June 30, 2019 | December 31, 2018 | |||||
Related party receivable | $ | $ | |||||
Related party notes receivable | |||||||
Related party payables | |||||||
Related party short-term debt | |||||||
Related party long-term debt |
• | Executive Overview |
• | Trends, Uncertainties and Opportunities |
• | Market Overview |
• | Results of Operations |
• | Non-U.S. GAAP Financial Measures |
• | Liquidity and Capital Resources |
• | Off-Balance Sheet Arrangements and Other Matters |
• | Contractual Obligations and Commitments |
• | Significant Accounting Policies and Critical Accounting Estimates |
Light Vehicle Production by Region - 2019 | ||||||||||||||||||||
(Millions, except where specified) | China | Japan | Rest of Asia | Americas | Europe | Other | Total | |||||||||||||
Second Quarter (IHS at 16-July-2019) | 5.4 | 2.3 | 3.1 | 4.8 | 5.6 | 0.4 | 21.7 | |||||||||||||
Change vs. Prior Year | (16.1 | )% | 5.7 | % | (2.8 | )% | (2.4 | )% | (6.7 | )% | (32.2 | )% | (7.4 | )% |
Light Vehicle Production by Region - 2019 | ||||||||||||||||||||
(Millions, except where specified) | China | Japan | Rest of Asia | Americas | Europe | Other | Total | |||||||||||||
Full Year (IHS at 16-July-2019) | 24.0 | 9.2 | 12.8 | 18.8 | 21.4 | 2.0 | 88.2 | |||||||||||||
Change vs. Prior Year | (6.8 | )% | 1.3 | % | (1.8 | )% | (1.7 | )% | (2.5 | )% | (23.2 | )% | (3.6 | )% |
Net Sales | Three Months Ended June 30 | Components of Change vs. Prior Year | |||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | ||||||||||||||||||||
$ | $ | $ | % | $ | % | $ | % | ||||||||||||||||||
Restraint Control Systems | 209 | 246 | (37 | ) | (15 | ) | (11 | ) | (4 | ) | (26 | ) | (11 | ) | |||||||||||
Active Safety | 184 | 215 | (31 | ) | (14 | ) | (11 | ) | (5 | ) | (20 | ) | (9 | ) | |||||||||||
Brake Systems | 96 | 111 | (15 | ) | (13 | ) | (3 | ) | (3 | ) | (12 | ) | (11 | ) | |||||||||||
Total | $ | 489 | $ | 572 | $ | (83 | ) | (14 | )% | $ | (25 | ) | (4 | )% | $ | (58 | ) | (10 | )% |
Electronics Segment | Three Months Ended June 30 | Components of Change vs. Prior Year | ||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | |||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||
Net Sales | 393 | 461 | (68 | ) | (15 | ) | (22 | ) | (5 | ) | (46 | ) | (10 | ) | ||||||||||
Operating Loss / Margin | (101 | ) | (25.7 | ) | (31 | ) | (6.7 | ) | (70 | ) | ||||||||||||||
Segment EBITDA1 / Margin | (81 | ) | (20.5 | ) | (13 | ) | (2.8 | ) | (68 | ) | ||||||||||||||
Associates | 7,763 | 6,404 | 1,359 |
Brake Systems Segment | Three Months Ended June 30 | Components of Change vs. Prior Year | ||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | |||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||
Net Sales | 96 | 111 | (15 | ) | (13 | ) | (3 | ) | (3 | ) | (12 | ) | (11 | ) | ||||||||||
Operating Loss / Margin | (17 | ) | (18.3 | ) | (4 | ) | (3.6 | ) | (13 | ) | ||||||||||||||
Segment EBITDA1 / Margin | (7 | ) | (7.4 | ) | 5 | 4.5 | (12 | ) | ||||||||||||||||
Associates | 1,415 | 1,502 | (87 | ) |
Corporate and Other | Three Months Ended June 30 | |||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | |||||
$ | % | $ | % | $ | % | |||
Net Sales | — | — | — | |||||
Operating Loss / Margin | (19) | — | (13) | — | (6) | |||
EBITDA1 / Margin | (18) | — | (13) | — | (5) | |||
Associates | 57 | 30 | 27 |
Income Statement | Three Months Ended June 30 | ||||||||||||||
(Dollars in millions, except per share data) | 2019 | 2018 | |||||||||||||
$ | % | $ | % | Change | |||||||||||
Net sales | $ | 489 | $ | 572 | $ | (83 | ) | ||||||||
Cost of sales | (412 | ) | (84.3 | )% | (460 | ) | (80.3 | )% | 47 | ||||||
Gross profit | $ | 77 | 15.7 | % | $ | 112 | 19.5 | % | $ | (35 | ) | ||||
Selling, general & administrative expenses | (50 | ) | (10.3 | )% | (37 | ) | (6.4 | )% | (13 | ) | |||||
Research, development & engineering expenses, net | (159 | ) | (32.4 | )% | (119 | ) | (20.7 | )% | (40 | ) | |||||
Amortization of intangibles | (6 | ) | (1.3 | )% | (6 | ) | (1.1 | )% | — | ||||||
Other income | 1 | 0.2 | % | 2 | 0.4 | % | (1 | ) | |||||||
Operating loss | $ | (137 | ) | (28.0 | )% | $ | (48 | ) | (8.4 | )% | $ | (89 | ) | ||
Loss from equity method investments | (18 | ) | (3.6 | )% | (16 | ) | (2.8 | )% | (2 | ) | |||||
Interest income | 4 | 0.9 | % | 1 | 0.1 | % | 3 | ||||||||
Interest expense | (2 | ) | (0.4 | )% | (1 | ) | (0.1 | )% | (1 | ) | |||||
Other non-operating items, net | 1 | 0.2 | % | 1 | 0.1 | % | — | ||||||||
Loss before income taxes | $ | (152 | ) | (31.1 | )% | $ | (63 | ) | (11.1 | )% | $ | (89 | ) | ||
Income tax benefit / (expense) | 10 | 2.0 | % | (3 | ) | (0.6 | )% | 13 | |||||||
Net loss1 | $ | (142 | ) | (29.0 | )% | $ | (66 | ) | (11.5 | )% | $ | (76 | ) | ||
Less: Net loss attributable to non-controlling interest | (9 | ) | (1.8 | )% | (3 | ) | (0.5 | )% | (6 | ) | |||||
Net loss attributable to controlling interest | $ | (133 | ) | (27.2 | )% | $ | (63 | ) | (11.0 | )% | $ | (70 | ) | ||
Net loss per share – basic2 | $ | (1.39 | ) | $ | (0.72 | ) | $ | (0.67 | ) | ||||||
Weighted average number of shares outstanding in millions2 | 96.06 | 87.13 | 8.93 |
Net Sales | Six Months Ended June 30 | Components of Change vs. Prior Year | |||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | ||||||||||||||||||||
$ | $ | $ | % | $ | % | $ | % | ||||||||||||||||||
Restraint Control Systems | 425 | 514 | (89 | ) | (17 | ) | (22 | ) | (4 | ) | (67 | ) | (13 | ) | |||||||||||
Active Safety | 375 | 427 | (52 | ) | (12 | ) | (24 | ) | (6 | ) | (28 | ) | (6 | ) | |||||||||||
Brake Systems | 184 | 225 | (41 | ) | (18 | ) | (7 | ) | (3 | ) | (34 | ) | (15 | ) | |||||||||||
Total | $ | 984 | $ | 1,166 | $ | (182 | ) | (16 | )% | $ | (53 | ) | (5 | )% | $ | (129 | ) | (11 | )% |
Electronics Segment | Six Months Ended June 30 | Components of Change vs. Prior Year | ||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | |||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||
Net Sales | 800 | 941 | (141 | ) | (15 | ) | (46 | ) | (5 | ) | (95 | ) | (10 | ) | ||||||||||
Operating Loss / Margin | (191 | ) | (23.8 | ) | (32 | ) | (3.4 | ) | (159 | ) | ||||||||||||||
Segment EBITDA1 / Margin | (151 | ) | (18.9 | ) | 4 | 0.4 | (155 | ) | ||||||||||||||||
Associates | 7,763 | 6,404 | 1,359 |
Brake Systems Segment | Six Months Ended June 30 | Components of Change vs. Prior Year | ||||||||||||||||||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | Currency | Organic1 | |||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | $ | % | |||||||||||||||
Net Sales | 184 | 225 | (41 | ) | (18 | ) | (7 | ) | (3 | )% | (34 | ) | (15 | )% | ||||||||||
Operating Loss / Margin | (37 | ) | (20.1 | ) | (12 | ) | (5.3 | ) | (25 | ) | ||||||||||||||
Segment EBITDA1 / Margin | (17 | ) | (9.4 | ) | 7 | 3.1 | (24 | ) | ||||||||||||||||
Associates | 1,415 | 1,502 | (87 | ) |
Corporate and Other | Six Months Ended June 30 | |||||||
(Dollars in millions, except where specified) | 2019 | 2018 | US GAAP Reported Change | |||||
$ | % | $ | % | $ | % | |||
Net Sales | — | — | — | |||||
Operating Loss / Margin | (37) | — | (20) | — | (17) | |||
EBITDA1 / Margin | (37) | — | (20) | — | (17) | |||
Associates | 57 | 30 | 27 |
Income Statement | Six Months Ended June 30 | ||||||||||||||
(Dollars in millions, except per share data) | 2019 | 2018 | |||||||||||||
$ | % | $ | % | Change | |||||||||||
Net sales | $ | 984 | $ | 1,166 | $ | (182 | ) | ||||||||
Cost of sales | (822 | ) | (83.5 | )% | (943 | ) | (80.9 | )% | 121 | ||||||
Gross profit | $ | 162 | 16.5 | % | $ | 223 | 19.1 | % | $ | (61 | ) | ||||
Selling, general & administrative expenses | (102 | ) | (10.4 | )% | (68 | ) | (5.9 | )% | (34 | ) | |||||
Research, development & engineering expenses, net | (315 | ) | (32.0 | )% | (225 | ) | (19.3 | )% | (90 | ) | |||||
Amortization of intangibles | (11 | ) | (1.1 | )% | (11 | ) | (0.9 | )% | — | ||||||
Other income | 1 | 0.1 | % | 17 | 1.4 | % | (16 | ) | |||||||
Operating loss | $ | (265 | ) | (27.0 | )% | $ | (64 | ) | (5.5 | )% | $ | (201 | ) | ||
Loss from equity method investments | (35 | ) | (3.5 | )% | (30 | ) | (2.6 | )% | (5 | ) | |||||
Interest income | 8 | 0.8 | % | 1 | 0.1 | % | 7 | ||||||||
Interest expense | (2 | ) | (0.2 | )% | (1 | ) | (0.1 | )% | (1 | ) | |||||
Other non-operating items, net | 1 | 0.1 | % | 1 | — | % | — | ||||||||
Loss before income taxes | $ | (294 | ) | (29.9 | )% | $ | (93 | ) | (8.0 | )% | $ | (201 | ) | ||
Income tax benefit / (expense) | 4 | 0.5 | % | (10 | ) | (0.8 | )% | 14 | |||||||
Net loss1 | $ | (290 | ) | (29.5 | )% | $ | (103 | ) | (8.8 | )% | $ | (187 | ) | ||
Less: Net loss attributable to non-controlling interest | (20 | ) | (2.0 | )% | (8 | ) | (0.7 | )% | (12 | ) | |||||
Net loss attributable to controlling interest | $ | (270 | ) | (27.4 | )% | $ | (95 | ) | (8.1 | )% | $ | (175 | ) | ||
Net loss per share – basic2 | $ | (2.94 | ) | $ | (1.09 | ) | $ | (1.86 | ) | ||||||
Weighted average number of shares outstanding in millions2 | 91.68 | 87.13 | 4.55 |
Reconciliations of U.S. GAAP to Non-U.S. GAAP Financial Measures | ||||||||||||||||||||||||
Net Loss to EBITDA | Three Months Ended June 30 | Six Months Ended June 30 | Last 12 Months | Full Year 2018 | ||||||||||||||||||||
Dollars in millions | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Net Loss | $ | (142 | ) | $ | (66 | ) | $ | (290 | ) | $ | (103 | ) | $ | (482 | ) | $ | (294 | ) | ||||||
Depreciation and amortization | 31 | 27 | 60 | 55 | 116 | 111 | ||||||||||||||||||
Loss from equity method investment | 18 | 16 | 35 | 30 | 68 | 63 | ||||||||||||||||||
Interest and other non-operating items, net | (3 | ) | (1 | ) | (6 | ) | (1 | ) | (13 | ) | (7 | ) | ||||||||||||
Income tax expense / (benefit) | (10 | ) | 3 | (4 | ) | 10 | 28 | 42 | ||||||||||||||||
EBITDA | $ | (106 | ) | $ | (21 | ) | $ | (205 | ) | $ | (9 | ) | $ | (283 | ) | $ | (87 | ) |
Segment EBITDA to EBITDA | Three Months Ended June 30 | Six Months Ended June 30 | Last 12 Months | Full Year 2018 | ||||||||||||||||||||
Dollars in millions | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
Electronics | $ | (81 | ) | $ | (13 | ) | $ | (151 | ) | $ | 4 | $ | (198 | ) | $ | (43 | ) | |||||||
Brake Systems | (7 | ) | 5 | (17 | ) | 7 | (17 | ) | 7 | |||||||||||||||
Segment EBITDA | $ | (88 | ) | $ | (8 | ) | $ | (168 | ) | $ | 11 | $ | (215 | ) | $ | (36 | ) | |||||||
Corporate and other | (18 | ) | (13 | ) | (37 | ) | (20 | ) | (68 | ) | (51 | ) | ||||||||||||
EBITDA | $ | (106 | ) | $ | (21 | ) | $ | (205 | ) | $ | (9 | ) | $ | (283 | ) | $ | (87 | ) |
Working Capital to Net Working Capital | June 30, 2019 | June 30, 2018 | March 31, 2019 | March 31, 2018 | December 31, 2018 | December 31, 2017 | ||||||||||||||||||
Dollars in millions | ||||||||||||||||||||||||
Total current assets | $ | 1,758 | $ | 1,699 | $ | 1,352 | $ | 706 | $ | 1,543 | $ | 649 | ||||||||||||
less Total current liabilities | 572 | 584 | 593 | 646 | 636 | 590 | ||||||||||||||||||
Working capital | $ | 1,185 | $ | 1,115 | $ | 759 | $ | 60 | $ | 907 | $ | 59 | ||||||||||||
less Cash and cash equivalents | 1,204 | 980 | 715 | — | 864 | — | ||||||||||||||||||
less Short-term debt | 20 | — | — | — | — | — | ||||||||||||||||||
Net working capital | $ | 1 | $ | 135 | $ | 44 | $ | 60 | $ | 42 | $ | 59 |
Six Months Ended June 30 | |||||||
Selected cash flow items | |||||||
(Dollars in millions, except where specified) | 2019 | 2018 | |||||
Net cash used in operating activities | $ | (160 | ) | $ | (164 | ) | |
Net working capital 1 | 1 | 135 | |||||
Capital expenditures | (109 | ) | (71 | ) | |||
Equity method investment | (11 | ) | (71 | ) | |||
Net Cash Used in Investing Activities | (119 | ) | (62 | ) | |||
Net Cash Provided by Financing Activities | 629 | 1,206 |
June 30, 2019 | March 31, 2019 | December 31, 2018 | September 30, 2018 | June 30, 2018 | ||||||
TOTAL | 9,235 | 9,192 | 8,600 | 8,310 | 7,937 | |||||
Whereof: | Direct Manufacturing | 2,153 | 2,110 | 2,083 | 2,186 | 2,229 | ||||
RD&E | 5,154 | 5,192 | 4,676 | 4,327 | 3,959 | |||||
Temporary | 1,659 | 1,563 | 1,329 | 1,254 | 1,246 |
Exhibit No. | Description | |
101* | The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2019, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited); (ii) the Condensed Consolidated Statements of Comprehensive Loss (Unaudited); (iii) the Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Equity (Unaudited); (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements. |
* | Filed herewith. |
+ | Management contract or compensatory plan. |
By: | /s/ Mats Backman |
Mats Backman | |
Chief Financial Officer | |
(Duly Authorized Officer and Principal Financial Officer) |
1. | The following sentence shall be added to the end of the first paragraph of Section 14 of the Employment Agreement: |
2. | The Employment Agreement, as modified by the terms of this Amendment, shall continue in full force and effect from and after the date of the adoption of this Amendment. |
1. | The following paragraph shall be added as the final bullet point of the Addendum: |
2. | The Addendum, as modified by the terms of this Amendment, shall continue in full force and effect from and after the date of the adoption of this Amendment. |
If to the Company: | Veoneer Inc. |
ARTICLE I PURCHASE AND SALE OF MEMBERSHIP INTERESTS | 1 |
1.1 | Sale and Purchase of Membership Interests 1 |
1.2 | Purchase Price 1 |
1.3 | Closing 1 |
1.4 | Closing Deliveries 2 |
ARTICLE II CONDITIONS TO CLOSING | 3 |
2.1 | Conditions to Obligations of Veoneer 3 |
2.2 | Conditions to Obligations of NK 3 |
Article III REPRESENTATIONS AND WARRANTIES of NK | 4 |
3.1 | Corporate Existence 4 |
3.2 | Authority 4 |
3.3 | No Conflict; Required Consents and Approvals 4 |
3.4 | Ownership of Membership Interests 5 |
3.5 | Proceedings 5 |
3.6 | Disclaimer 5 |
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF VEONEER | 5 |
4.1 | Corporate Existence 5 |
4.2 | Authority 5 |
4.3 | No Conflict; Required Consents and Approvals 5 |
4.4 | Proceedings 6 |
4.5 | Disclaimer 6 |
ARTICLE V COVENANTS | 6 |
5.1 | General 6 |
5.2 | Certain Notifications 6 |
5.3 | Confidentiality 6 |
5.4 | Pre-Closing Funding 7 |
5.5 | Termination of Existing Agreements 7 |
5.6 | Access to Information 7 |
5.7 | Noncompete 7 |
5.8 | Non-Solicit 8 |
5.9 | Ancillary Agreements 8 |
ARTICLE VI INDEMNIFICATION | 8 |
6.1 | NK Indemnity 8 |
6.2 | Veoneer Indemnity 8 |
6.3 | Limitation of Liability 9 |
ARTICLE VII TERMINATION | 9 |
7.1 | Circumstances for Termination 9 |
7.2 | Limitation on Termination 9 |
7.3 | Effect of Termination 9 |
ARTICLE VIII MISCELLANEOUS | 9 |
8.1 | Consent to Transfer 9 |
8.2 | Entire Agreement 10 |
8.3 | Successors and Assigns 10 |
8.4 | No Third Party Beneficiary 10 |
8.5 | Severability 10 |
8.6 | Notices 10 |
8.7 | Governing Law; Dispute Resolution 11 |
8.8 | Interpretation 12 |
8.9 | Modifications, Amendments and Waivers 12 |
8.10 | Counterparts; Electronic Signature 12 |
8.11 | Specific Performance 12 |
8.12 | Expenses 13 |
8.13 | Further Assurances 13 |
1. | I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-54942] for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | [Language omitted in accordance with SEC Release No. 34-54942] |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 26, 2019 |
/s/ Jan Carlson |
Jan Carlson |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-54942] for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | [Language omitted in accordance with SEC Release No. 34-54942] |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 26, 2019 |
/s/ Mats Backman |
Mats Backman |
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jan Carlson |
Jan Carlson |
President and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mats Backman |
Mats Backman |
Chief Financial Officer |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (142) | $ (66) | $ (290) | $ (103) |
Other comprehensive income (loss), before tax: | ||||
Change in cumulative translation adjustment | (2) | (15) | (13) | (4) |
Other comprehensive income (loss), before tax | (2) | (15) | (13) | (4) |
Expense for taxes | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | (2) | (15) | (13) | (4) |
Comprehensive loss | (144) | (81) | (303) | (107) |
Less: Comprehensive loss attributable to non-controlling interest | (7) | (5) | (18) | (7) |
Comprehensive loss attributable to controlling interest | (137) | (76) | (285) | (100) |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | 0 | 1 | 0 | 1 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | $ 0 | $ 1 | $ 0 | $ (1) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
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 | 87,000,000 |
Shares Outstanding (in shares) | 111,000,000 | 87,000,000 |
4% Convertible Senior Dotes due 2024 | Convertible Senior Notes | ||
Stated interest rate | 4.00% |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
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. In advance of the Spin-Off, Autoliv completed a series of internal transactions, in which Autoliv transferred its Electronics business to Veoneer. These transactions are referred to herein as the “internal reorganization”. The internal reorganization was completed on April 1, 2018. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provides brake control and actuation systems. The accompanying unaudited condensed consolidated financial statements for the period ended June 30, 2018 have been prepared from Autoliv’s historical accounting records and are presented on a stand-alone basis as if the operations had been conducted independently from Autoliv. Prior to the Spin-Off, Autoliv’s net investment in these operations (Net Former Parent Investment) is shown in lieu of a controlling interest’s equity in the unaudited condensed consolidated financial statements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) were reflected in Retained earnings (Accumulated deficit). For periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Condensed Consolidated Financial Statements"). The unaudited condensed consolidated financial statements include the historical operations, assets, and liabilities that were considered to comprise the Veoneer business. The allocations and estimates in the unaudited condensed consolidated financial statements for the period ended June 30, 2018 are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of Veoneer included herein may not be indicative of what they would have been had Veoneer actually been a stand-alone entity during such periods, nor are they necessarily indicative of Veoneer's future results. The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2018 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. Joint Venture with Nissin Kogyo On June 14, 2019, the Company signed agreements with Nissin Kogyo, its joint venture partner in Veoneer Nissin Brake Systems ("VNBS"), providing for certain structural changes to the joint venture and the funding of VNBS. Pursuant to the agreements, Veoneer acquired Nissin Kogyo’s interests in the US operations of VNBS, referred to as Veoneer Nissin Brake America ("VNBA"), and VNBS transferred or licensed the VNBS technologies necessary to operate the VNBA business to VNBA. VNBA, including the transferred or licensed technologies, is a wholly-owned Veoneer business effective on the closing date, June 28, 2019. VNBS will also provide certain transition services to VNBA. The VNBS operations in Japan and China will remain a part of the joint venture, with Veoneer owning 51% and Nissin Kogyo owning 49% of the joint venture. Under the agreement, Nissin Kogyo provided guarantees for certain VNBS commercial loans corresponding to 49% of the funding Veoneer had previously unilaterally provided to VNBS. During the six months ended June 30, 2019 Veoneer received approximately $20 million as debt repayment from VNBS. The agreement between Veoneer and Nissin Kogyo resolves the funding situation previously described by Veoneer in its public filings and allows for Veoneer to continue reviewing and evaluating the development priorities and strategic options with respect to its brake systems business. 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 our common stock offering was $17.50 per share. The Company received net proceeds of approximately $404 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.
|
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. New Accounting Standards Adoption of New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019, as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, and has not made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, have allowed the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of approximately $75 million as of January 1, 2019. The adoption of the new lease standard did not have a material impact on the Company's Condensed Consolidated Statements of Operations or Statements of Cash Flows.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on the 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 is currently evaluating this guidance to determine the impact on the Company's Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on the Company's Condensed Consolidated Financial Statements.
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Revenue |
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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
Net Sales by Region
Net Sales by Products
Net Sales by Products
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 month to 2 year(s). As of June 30, 2019, assets recorded under finance leases were $49 million, and accumulated depreciation associated with finance leases was $4 million. The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The components of lease expense for the six months ended June 30, 2019 were as follows:
Other information related to leases for the six months ended June 30, 2019 was as follows:
Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows:
Leases obligations reported as of June 30, 2019 were as follows:
As of June 30, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $35 million. These operating leases will commence during 2019 with lease terms of 2 years to 15 years.
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Leases | Leases The Company has operating and finance leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 12 years, and some of which include options to terminate the leases within 1 month to 2 year(s). As of June 30, 2019, assets recorded under finance leases were $49 million, and accumulated depreciation associated with finance leases was $4 million. The Company has elected the practical expedient not to separate lease components from non-lease components for all its underlying assets. If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency. The components of lease expense for the six months ended June 30, 2019 were as follows:
Other information related to leases for the six months ended June 30, 2019 was as follows:
Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows:
Leases obligations reported as of June 30, 2019 were as follows:
As of June 30, 2019, the Company has additional obligations relating to operating leases, primarily for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment, that have not yet commenced of $35 million. These operating leases will commence during 2019 with lease terms of 2 years to 15 years.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s short and long-term debt consists of the following:
Short-Term Debt: Short-term borrowings are primarily related to the Company's non-U.S. joint ventures and are payable in Japanese Yen. The term loan bears interest at a rate of 0.58% per year. 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 was initially 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 deliver 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 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 will be the Company's general unsecured obligations and will 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) during any fiscal quarter commencing after the fiscal quarter ending on June 30, 2019 (and only during such fiscal quarter), 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 consolidated and 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 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 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:
The Company recognized total interest expense related to Notes of approximately $1 million for both the three and six months ended June 30, 2019 in the Unaudited Condensed Consolidated Statements of Operations. The estimated fair value of the Notes was $156 million as of June 30, 2019. The estimated fair value of the Notes was determined through consideration of quoted market prices. The fair value is classified as Level 2, as defined in Note 6, Fair Value Measurements.
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Fair Value Measurements |
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Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Assets which are valued at net asset value per share ("NAV"), or its equivalent, as a practical expedient are reported outside the fair value hierarchy, but are included in the total assets for reporting and reconciliation purposes. Items Measured at Fair Value on a Recurring Basis Derivative instruments - The Company uses derivative financial instruments, “derivatives”, to mitigate the market risk that occurs from its exposure to changes in interest and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial risk policy. The derivatives outstanding as of June 30, 2019 were foreign exchange swaps. All swaps principally match the terms and maturity of the underlying debt and no swaps have a maturity beyond six months. All derivatives are recognized in the unaudited condensed consolidated financial statements at fair value. Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria. For certain other derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest and foreign exchange rates. The Company’s derivatives are classified as Level 2 of the fair value hierarchy and there were no transfers between the levels during this or comparable periods. During the first quarter of 2018, forward contracts designated as cash flow hedges of certain external purchasing were terminated. The loss associated with such termination was not material. Financial Statement Presentation The Company enters into master netting agreements, International Swaps and Derivatives Association (ISDA) agreements with all derivative counterparties. The netting agreements allow for netting of exposures in the event of default or breach of the counterparty agreement. The fair values in the Condensed Consolidated Balance Sheets have been presented on a gross basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s Condensed Consolidated Balance Sheets. The notional value of the derivatives not designated as hedging instruments was $127 million as of June 30, 2019 and $103 million as of December 31, 2018, respectively. As of June 30, 2019, the asset of the derivatives not designated as hedging instruments was $1 million, and as of December 31, 2018, the asset of the derivatives not designated as hedging instruments was less than $1 million. Gains and losses on derivative financial instruments recognized in the Unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2019 and 2018, were a gain of less than $1 million and a loss of less than $1 million for the six months ended June 30, 2019 and 2018, respectively, and a gain of $1 million and a gain of $1 million, respectively. Contingent consideration - The fair value of the contingent consideration related to the M/A-COM acquisition on August 17, 2015 is re-measured on a recurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. The Company adjusted the fair value of the earn-out liability to $14 million in the first quarter of 2017 based on actual revenue levels to date as well as changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period. Income of approximately $13 million was recognized within Other income in the Unaudited Condensed Consolidated Statements of Operations in the first quarter of 2017 due to the decrease in the contingent consideration liability. The remaining fair value of the earn-out liability of $14 million as of December 31, 2017 was fully released and recognized within Other income in the first quarter of 2018, driven by changes in the estimated probability of different revenue scenarios for the remaining contractual earn-out period such that management no longer believes that there are any scenarios under which the earn-out criteria could be met. Management has updated its analysis as of June 30, 2019 and continues to believe that the fair value of the contingent consideration is $0 million. Items Measured at Fair Value on a Non-Recurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. No such non-recurring measurements were made during the six months ended June 30, 2019 or 2018. Investments The Company may, as a practical expedient, estimate the fair value of certain investments using NAV of the investment as of the reporting date. This practical expedient generally deals with investments that permit an investor to redeem its investment directly with, or receive distributions from, the investee at times specified in the investee’s governing documents. Examples of these investments (often referred to as alternative investments) may include ownership interests in real assets, certain credit strategies, and hedging and diversifying strategies. They are commonly in the form of limited partnership interests. The Company uses NAV as a practical expedient when valuing investments in alternative asset classes and funds which are a limited partnership or similar investment vehicle. On June 30, 2017, Veoneer committed to make a $15 million investment in Autotech Fund I, L.P. pursuant to a limited partnership agreement, and as a limited partner, will periodically make capital contributions toward this total commitment amount. As of June 30, 2019 and December 31, 2018, Veoneer contributed approximately $10 million and $8 million, respectively, to the investment in Autotech Fund I, L.P. The carrying amounts reflected in the Condensed Consolidated Balance Sheet in Investments for the Autotech Fund I, L.P approximates its fair values.
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Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax benefit for the three and six month periods ended June 30, 2019 was $10 million and $4 million, respectively. The income tax provision for the three and six month periods ended June 30, 2018 was $3 million and $10 million, respectively. Discrete items, net were a benefit of $8 million and $5 million for the three and six month periods ended June 30, 2019 , respectively and a provision of $1 million for both the three and six month periods ended June 30, 2018. Veoneer's effective tax rate differs from an expected statutory rate primarily due to prior year provision-to-return adjustments, an intraperiod tax allocation related to the Notes issuance, and losses in certain jurisdictions that are not benefited. Under the intraperiod tax allocation rules, the deferred tax liability created upon the issuance of the Notes and recorded through Additional Paid-in Capital is treated as a source of income, which enables the Company to recognize a tax benefit of $5 million for the U.S. loss before income taxes through continuing operations for both the three and six month periods ended June 30, 2019. The tax benefit related to the issuance of the Notes will be recognized ratably throughout the year and will not recur in future years. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company has completed its accounting for the effects of the Act on the Company’s deferred tax balances as of the enactment date. Pursuant to the Tax Matters Agreement entered into with Autoliv in connection with the Spin-Off, Autoliv is the primary obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the Company is not liable for any transition taxes under the Act. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance. Valuation allowances have been established for the Company’s United States, Swedish, French, Japanese operations, certain Chinese operations and the Company’s joint venture in Japan. The Company has reserves for income taxes that represent the Company’s best estimate of the potential liability for tax exposures. Inherent uncertainties exist in estimates of tax exposures due to changes in tax law, both legislated and concluded through the various jurisdictions’ court systems. Any income tax liabilities resulting from operations prior to April 1, 2018, are assumed to be settled with Former Parent on the last day Veoneer was part of the Autoliv group and were relieved through the Net Former Parent investment. There were no material changes to the Company’s uncertain tax positions as of June 30, 2019. The Company files income tax returns in the United States federal jurisdiction, and various states and non-U.S. jurisdictions. Under local tax law, a Veoneer entity may have been required to file its income tax returns combined with an Autoliv entity up to and including the date of the Spin-Off. Subsequent to the Spin-Off, Veoneer files its income tax returns on a stand-alone basis. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense.
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Inventories |
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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:
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Equity Method Investment |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investment | Equity Method Investment As of June 30, 2019, the Company has one equity method investment, which is in Zenuity, a 50% ownership joint venture with Volvo cars. During the second quarter of 2019, Veoneer contributed SEK 100 million (approximately $11 million) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs. During the first quarter of 2018, Veoneer contributed SEK 600 million (approximately $71 million) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs. The profit and loss attributed to the investment is shown in the line item Loss from equity method investment in the Unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2019 was $18 million and $35 million, respectively. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2018 was $16 million and $30 million, respectively. As of June 30, 2019 and December 31, 2018, the Company’s equity investment in Zenuity was $73 million and $101 million, respectively, after consideration of foreign exchange movements. Certain unaudited summarized income statement information of Zenuity, for the three and six months ended June 30, 2019 and 2018, is shown below:
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Accrued Expenses |
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Accrued Expenses | Accrued Expenses
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Retirement Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans | Retirement Plans Defined Benefit Pension Plans The defined benefit pension plans impacting Veoneer's financial results include the following: Existing Veoneer Plans comprised of plans in Japan, Canada, and France, Transferred Veoneer Plans comprised of plans in Germany, India, Japan, and South Korea, and Autoliv Sponsored Plans comprised of plans in Sweden and the U.S. Existing Veoneer Plans The defined benefit pension plans for eligible participants in Japan, Canada, and France prior to the Spin-Off continue to provide pension retirement benefits to the Company’s employees subsequent to the Spin-Off. The Company’s net periodic benefit costs for the existing Veoneer plans for the three and six months ended June 30, 2019 and 2018 were as follows:
All components of pension cost (service cost, amortization cost, interest cost, expected return on plan assets and amortization of actuarial loss) were not material in the Unaudited Condensed Consolidated Statements of Operations. Transferred Veoneer Plans Prior to the plan transfers to Veoneer legal entities on April 1, 2018, eligible Veoneer employees participated in the following Autoliv-sponsored plans:
On April 1, 2018, the assets, liabilities, and associated accumulated other comprehensive income (loss) of the pension plans in Germany, India, Japan, and South Korea related to active Veoneer employees were transferred to pension plans sponsored by various Veoneer legal entities. Benefit plan obligations of $6 million were recorded by Veoneer related to these plans in connection with the April 1, 2018 transfer. Plan assets in the transferred plans are immaterial. The amounts recorded for the transfer of the Veoneer plans were based on the assumptions incorporated into the plan measurements as of December 31, 2017; however, management determined that there were no material changes in assumptions from December 31, 2017 to April 1, 2018. Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan The Company’s allocated net periodic benefit costs for these defined benefit plans were less than $1 million for the three and six months ended June 30, 2019. The allocated net periodic benefit costs related to transferred plans from Autoliv to Veoneer were less than $1 million for the three months ended March 31, 2018. Subsequent to the plan transfer on April 1, 2018, the components of net periodic benefit costs for these defined benefit plans were less than $1 million for the three and six months ended June 30, 2018. Autoliv Sponsored Plans Prior to certain legal decisions or plan amendments, Veoneer employees in Sweden and in the U.S. participated in the following Autoliv-sponsored multi-employer plans:
On April 1, 2018, it was determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the Sweden plan for all Veoneer employees included in the Sweden plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The allocation to capture the Company’s specific defined benefit plans expense and contributions prior to the plans amendment for the three and six months ended June 30, 2018 were less than $1 million. On June 29, 2018, it was also determined that the assets, liabilities and associated accumulated other comprehensive income (loss) of the U.S. plan for all Veoneer employees included in the U.S. plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The Veoneer employees were considered to be participating in the Autoliv sponsored plan through June 29, 2018 at which date the plan was amended to freeze the accrual of benefits for any Veoneer employees.
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Stock Incentive Plan |
6 Months Ended |
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Jun. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan | Stock Incentive Plan The Veoneer, Inc. 2018 Stock Incentive Plan was established and effective on June 29, 2018 to govern the Company’s stock-based awards that will be granted in the future. The Veoneer, Inc. 2018 Stock Incentive Plan authorizes the grant of 3 million shares of Veoneer common stock for future equity awards to Veoneer employees and non-employee directors and authorizes up to 1.5 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. In February, March and May 2019, under the Company’s long-term incentive (LTI) program, certain employees received restricted stock units (RSUs) without dividend equivalent rights and performance shares (PSs) without dividend equivalent rights. The allocation between RSUs and PSs for the grants made in February, March and May was 133,362 RSUs and 126,037 PSs at 100% target. The RSUs were granted on February 19, 2019, March 1, 2019 and May 13, 2019 and will vest on the second or third anniversary of the grant date, subject to the grantee’s continued employment with the Company on the vesting date and acceleration of vesting in certain circumstances. The fair value of RSUs and PSs granted in 2019 were calculated by using the closing stock price on the grant dates. The grant date fair value for the RSUs and PSs, granted on February 19, 2019, March 1, 2019 and May 13, 2019, was $4 million and $1 million, respectively. The PSs were granted on February 19, 2019, March 1, 2019 and May 13, 2019 and will earn out during the first quarter of 2022, upon the Compensation Committee’s certification of achievement of the applicable performance goals. The grantee may earn 0%-200% of the target number of PSs based on the Company’s achievement of specified targets. The performance target is the Company’s gross margin for the applicable performance period. Each PS represents a promise to transfer a share of the Company’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions. Certain eligible Veoneer employees participate in the Autoliv, Inc. 1997 Stock Incentive Plan (the Plan) sponsored by the Former Parent. Under the Former Parent’s Plan, employees receive 50% of their LTI grant value in the form of PSs and 50% in the form of RSUs commencing with grants in February 2016. Prior to this, stock options and RSUs were issued. The source of the shares issued upon vesting of awards is generally from Autoliv treasury shares. The grantee may earn 0-200% of the target number of PSs based on achievement of specified targets for Former Parent’s compound annual growth rate (CAGR) for sales and Former Parent’s CAGR in earnings per share relative to an established benchmark growth rate. Each performance target is weighted 50% and results are measured at the end of the three-year performance period. Each PS represents a promise to transfer a share of the Former Parent’s common stock to the employee following completion of the performance period, provided that the performance goals mentioned above are met and provided, further, that the grantee remains employed through the performance period, subject to certain limited exceptions. In February 2018, under the Former Parent’s LTI program, certain Veoneer employees received RSUs with dividend rights. The RSUs were granted on February 18, 2018 and will vest on the third anniversary of the grant date. The fair value of RSUs granted in 2018 is calculated by using the closing stock price on the grant date. The fair value for the RSUs granted on February 18, 2018 was $6 million. Veoneer recognized total stock (RSUs PSs and Stock Options) compensation cost of $2 million and $3 million for the three and six months ended June 30, 2019, respectively. During the three and six months ended June 30, 2018, the Company recorded $1 million and $2 million, respectively.
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Contingent Liabilities |
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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 Condensed Consolidated Balance Sheets.
For the three and six months ended June 30, 2019 and 2018, provisions and cash paid primarily relate to recall and warranty related issues. The decrease in the reserve balance as of June 30, 2019 compared to the prior year was mainly due to a recall related settlement and cash payments for warranties and product liabilities. Agreements entered into between Autoliv and Veoneer in connection with the Spin-Off provide for Autoliv to indemnify Veoneer for certain liabilities related to electronics products manufactured before April 1, 2018. As of June 30, 2019 the indemnification asset of $10 million included in the Other current assets offsets substantially all of the product related liabilities. A substantial portion of these costs are subject to indemnification by Autoliv. Guarantees The Company provided lease guarantees to Zenuity of $7 million and $8 million as of June 30, 2019, and December 31, 2018, 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.
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Loss per share |
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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 calculation of diluted loss per share excludes all anti-dilutive common stock. The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2019 and 2018.
1 Shares in the diluted loss per share calculation represent basic shares due to the net loss. In periods when the Company has a net loss, equity incentive awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The Company excluded equity incentive awards of 290,483 and 301,898 for the three and six months ended June 30, 2019, respectively, and zero for the three and six months ended June 30, 2018. The Company may settle the conversions 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 all Notes were converted. See Note 5, Debt. Due to anti-dilutive effects, the Company excluded potential convertible shares of 3,364,297 and 1,691,442 for the three and six months ended June 30, 2019, respectively, and zero for the three and six months ended June 30, 2018 from the diluted loss per share calculations.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Financial results for the Company's reportable segments have been prepared using a management approach, which is consistent with the basis and manner in which financial information is evaluated by the Company's Chief Operating Decision Maker (CODM) in allocating resources and in assessing performance. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The operating results of the operating segments are regularly reviewed by the Company’s CODM, the Chief Executive Officer, to assess the performance of the individual operating segments and to make decisions about resources to be allocated to the operating segments. The accounting policies for the reportable segments are the same as those described in the Note 2, Summary of Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019.
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Relationship with Former Parent and Related Entities |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Relationship with Former Parent and Related Entities | Relationship with Former Parent and Related Entities Prior to the Spin-Off, Veoneer had been managed and operated in the normal course of business with other affiliates of Autoliv. Accordingly, certain shared costs had been allocated to Veoneer and reflected as expenses in the stand-alone unaudited condensed consolidated financial statements. Veoneer management considers the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Autoliv attributable to Veoneer for purposes of the stand-alone financial statements; however, the expenses reflected in the unaudited condensed consolidated financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. In addition, the expenses reflected in the unaudited condensed consolidated financial statements may not be indicative of expenses that will be incurred in the future by Veoneer. Prior to the Spin-Off, transactions between Autoliv and Veoneer, with the exception of sales and purchase transactions and reimbursements for payments made to third-party service providers by Autoliv on Veoneer’s behalf, are reflected in the Unaudited Condensed Consolidated Statements of Cash Flows as a financing activity in Net transfers from Former Parent. Transactions with Related Parties Veoneer and Autoliv entered into a Transition Services Agreement ("TSA") under which certain services are provided by Autoliv to Veoneer and certain services are provided by Veoneer to Autoliv. The Company recognized $1 million and $3 million of expense under the TSA for the three and six months ended June 30, 2019, respectively, and $3 million and $3 million of expense under the TSA for the three and six months ended June 30, 2018 respectively. The Company recognized less than $1 million of income under the TSA for the three and six months ended June 30, 2019, and less than $1 million of income under the TSA for the three and six months ended June 30, 2018. Throughout the periods covered by the unaudited condensed consolidated financial statements, Veoneer sold finished goods to Autoliv and Nissin Kogyo, the 49% owner in VNBS (a 51% owned subsidiary). Related party sales amount to $26 million and $52 million for the three and six months ended June 30, 2019, respectively and $39 million and $80 million for the three and six months ended June 30, 2018, respectively. Related Party Balances Amounts due to and due from related parties are summarized in the below table:
Related party receivables are mainly driven by reseller agreements put in place in connection with the Spin-Off. The reseller agreements are between Autoliv and Veoneer and facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period after the Spin-Off. Autoliv will collect the customer payments and will remit the payments to Veoneer. As of June 30, 2019 and December 31, 2018, all related party long-term debt relates to a capital lease arrangement at VNBS of $12 million and $13 million, respectively. The finance lease is with Nissin Kogyo, the 49% owner of VNBS. Corporate Costs/Allocations For the periods prior to April 1, 2018, the unaudited condensed consolidated financial statements include corporate costs incurred by Autoliv for services that are provided to or on behalf of Veoneer. These costs consist of allocated cost pools and direct costs. Corporate costs have been directly charged to, or allocated to, Veoneer using methods management believes are consistent and reasonable. The method for allocating corporate function costs to Veoneer is based on various formulas involving allocation factors. The methods for allocating corporate administration costs to Veoneer are based on revenue, headcount, or other relevant metrics. However, the expenses reflected in the unaudited condensed consolidated financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if Veoneer historically operated as a separate, stand-alone entity. All corporate charges and allocations have been deemed paid by Veoneer to Autoliv in the period in which the cost was recorded in the Unaudited Condensed Consolidated Statements of Operations. Effective April 1, 2018, Veoneer began performing certain functions using internal resources or third parties, and certain other services continued to be provided by Autoliv and directly charged to Veoneer. In addition, Veoneer personnel perform certain services for Autoliv, which are directly charged to Autoliv. Allocated corporate costs included in Costs of sales, Selling, general and administrative expenses and Research, development and engineering expenses were for shared services and infrastructure provided, which includes costs such as information technology, accounting, legal, real estate and facilities, corporate advertising, risk and insurance services, treasury, shareholder services and other corporate and infrastructure services. Cash Management and Financing Prior to the Spin-Off, Veoneer participated in Autoliv’s centralized cash management and financing programs. Disbursements were made through centralized accounts payable systems operated by Autoliv. Cash receipts were transferred to centralized accounts, also maintained by Autoliv. As cash was disbursed and received by Autoliv, it was accounted for by Veoneer through the Net Former Parent investment. All short-term and long-term debt was financed by Autoliv or by Nissin Kogyo and financing decisions for wholly and majority owned subsidiaries were determined by Autoliv’s corporate treasury operations. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents. Upon the Spin-Off, Veoneer created its own corporate treasury operations.
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Factoring |
6 Months Ended |
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Jun. 30, 2019 | |
Receivables [Abstract] | |
Factoring | Factoring The Company receives bank notes generally maturing within six months from certain of its customers in China to settle trade accounts receivable. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash. For the six months ended June 30, 2019, the Company has entered into arrangements with financial institutions and sold $36 million of trade receivables without recourse and $23 million of bank notes without recourse, which qualify as a sale as all rights to the trade and notes receivable have passed to the financial institution. There were no factoring arrangements for the six months ended June 30, 2018. As of June 30, 2019, the Company has $7 million of trade notes receivables which remain outstanding and will mature within the second half of 2019. The collections of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature.
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company continues to engage in discussions with Volvo Cars, its Zenuity JV partner, regarding the development priorities of Zenuity in light of the market shift toward autonomous vehicle solutions. The outcome of these discussions may influence the level of funding and participation of Veoneer in the Zenuity JV, as well as future sharing of intellectual property and IP licenses. Subsequent to June 30, 2019, the Company made a capital contribution SEK 200 million (approximately $21 million) to the Zenuity JV.
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Summary of Significant Accounting Policies (Policies) |
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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 the period ended June 30, 2018 have been prepared from Autoliv’s historical accounting records and are presented on a stand-alone basis as if the operations had been conducted independently from Autoliv. Prior to the Spin-Off, Autoliv’s net investment in these operations (Net Former Parent Investment) is shown in lieu of a controlling interest’s equity in the unaudited condensed consolidated financial statements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) were reflected in Retained earnings (Accumulated deficit). For periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Condensed Consolidated Financial Statements"). The unaudited condensed consolidated financial statements include the historical operations, assets, and liabilities that were considered to comprise the Veoneer business. The allocations and estimates in the unaudited condensed consolidated financial statements for the period ended June 30, 2018 are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of Veoneer included herein may not be indicative of what they would have been had Veoneer actually been a stand-alone entity during such periods, nor are they necessarily indicative of Veoneer's future results. The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2018 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 22, 2019. Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts
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New Accounting Standards | New Accounting Standards Adoption of New Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019, as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, and has not made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, have allowed the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of approximately $75 million as of January 1, 2019. The adoption of the new lease standard did not have a material impact on the Company's Condensed Consolidated Statements of Operations or Statements of Cash Flows.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance issued by the FASB, including industry specific guidance. In 2016, the FASB issued accounting standard updates to address implementation issues and to clarify guidance in certain areas. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. In addition, ASU 2014-09 requires certain additional disclosure around the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASU 2014-09 effective January 1, 2018 and utilized the modified retrospective (cumulative effect) transition method. The Company applied the modified retrospective transition method through a cumulative adjustment to equity. The adoption of the new revenue standard did not have a material impact on the Company’s Condensed Consolidated Financial Statements. Accounting Standards Issued But Not Yet Adopted In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on the 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 is currently evaluating this guidance to determine the impact on the Company's Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and early adoption is permitted for annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the Company’s pending adoption of ASU 2016-13 on the Company's Condensed Consolidated Financial Statements.
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Fair Value Measurements | Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs. Level 1 - Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 - Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. Level 3 - Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. 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.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of adjustments made due to new ASU |
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Revenue (Tables) |
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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
Net Sales by Region
Net Sales by Products
Net Sales by Products
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Leases (Tables) |
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Schedule of Lease Costs and Supplemental Cash Flows | The components of lease expense for the six months ended June 30, 2019 were as follows:
Other information related to leases for the six months ended June 30, 2019 was as follows:
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Schedule of Future Minimum Finance Lease Payments |
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Schedule of Future Minimum Operating Lease Payments |
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Schedule of Lease Obligations | Leases obligations reported as of June 30, 2019 were as follows:
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The Company’s short and long-term debt consists of the following:
The following table presents the outstanding principal amount and carrying value of the Notes:
|
Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
Equity Method Investment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unaudited Income Statement Information | Certain unaudited summarized income statement information of Zenuity, for the three and six months ended June 30, 2019 and 2018, is shown below:
|
Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accrued Expenses |
|
Retirement Plans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of net periodic benefit cost | The Company’s net periodic benefit costs for the existing Veoneer plans for the three and six months ended June 30, 2019 and 2018 were as follows:
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Summary Of Pension Plans | Prior to the plan transfers to Veoneer legal entities on April 1, 2018, eligible Veoneer employees participated in the following Autoliv-sponsored plans:
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Schedule of Multiemployer Plans | Prior to certain legal decisions or plan amendments, Veoneer employees in Sweden and in the U.S. participated in the following Autoliv-sponsored multi-employer plans:
|
Contingent Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Contingency [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of change in balance sheet position of product related liabilities | The table below summarizes the change in product related liabilities in the Condensed Consolidated Balance Sheets.
|
Loss per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings per share | The following table sets forth the computation of basic and diluted loss per share for the three and six months ended June 30, 2019 and 2018.
1 Shares in the diluted loss per share calculation represent basic shares due to the net loss.
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of (loss)/income before income taxes |
|
Relationship with Former Parent and Related Entities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amount due to and from related parties | Amounts due to and due from related parties are summarized in the below table:
|
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 94 | $ 75 |
Operating lease liabilities | $ 93 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | 75 | |
Operating lease liabilities | $ 75 |
Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2016-02 (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Assets | |||
Right-of-use assets, operating leases | $ 94 | $ 75 | |
Current liabilities | |||
Other current liabilities | 17 | 16 | |
Non-current liabilities | |||
Operating lease liabilities - non-current | 75 | 57 | |
Equity | |||
Accumulated deficit | $ (451) | (181) | $ (181) |
Accounting Standards Update 2016-02 | |||
Assets | |||
Right-of-use assets, operating leases | 75 | ||
Current liabilities | |||
Other current liabilities | 16 | ||
Non-current liabilities | |||
Operating lease liabilities - non-current | 57 | ||
Equity | |||
Accumulated deficit | $ 0 |
Leases - Narrative (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Lessee, Lease, Description [Line Items] | |
Options to extend term | 12 years |
Assets recorded under finance leases | $ 49 |
Finance lease asset, accumulated depreciation | 4 |
Operating lease not yet commenced | $ 35 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 1 year |
Options to terminate term | 1 month |
Operating leases not yet commenced lease term | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease renewal term | 15 years |
Options to terminate term | 2 years |
Operating leases not yet commenced lease term | 15 years |
Leases - Components of Lease Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 6 | $ 11 |
Finance lease cost | ||
Amortization of right-of-use assets | 0 | 1 |
Interest on lease liabilities | 1 | 1 |
Total finance lease cost | 1 | 2 |
Short-term lease cost | 0 | 0 |
Variable lease cost | 0 | 0 |
Total lease cost | $ 7 | $ 13 |
Leases - Schedule of Cash Flow and Other Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows used for operating leases | $ 10,000,000 |
Operating cash flows used for finance leases | 1,000,000 |
Financing cash flows used for finance leases | 1,000,000 |
Right-of-use assets obtained in exchange for new lease obligations: | |
Operating leases | 32 |
Finance leases | $ 33 |
Weighted-average remaining lease term | |
Operating Leases | 8 years |
Finance Leases | 11 years |
Weighted-average discount rate | |
Operating leases | 3.70% |
Finance leases | 4.90% |
Leases - Schedule of Future Minimum Operating and Finance Lease Payments (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Operating Leases | |
2019 (excluding the six months ended June 30, 2019) | $ 11 |
2020 | 20 |
2021 | 15 |
2022 | 13 |
2023 | 12 |
Thereafter | 38 |
Total lease payments | 109 |
Less imputed interest | 16 |
Total lease liabilities | 93 |
Finance Leases | |
2019 (excluding the six months ended June 30, 2019) | 2 |
2020 | 4 |
2021 | 15 |
2022 | 3 |
2023 | 3 |
Thereafter | 37 |
Total lease payments | 64 |
Less imputed interest | 18 |
Total lease liabilities | $ 46 |
Leases - Schedule of Lease Obligations (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Operating Leases | |||
Other current liabilities | $ 17 | $ 16 | |
Operating lease liabilities - non-current | 75 | $ 57 | |
Total lease liabilities | 93 | ||
Finance Leases | |||
Other current liabilities | 1 | ||
Finance lease non-current liabilities | 33 | $ 1 | |
Total lease liabilities | 46 | ||
Operating Leases, Liability, Related Party | 1 | ||
Finance Leases, Liability, Related Party | $ 12 |
Debt - Schedule of Short and Long Term Debt (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
May 28, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Short-Term Debt: | |||
Short-term borrowings | $ 20 | $ 0 | |
Long-Term Debt: | |||
Total Debt | 176 | 0 | |
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | |||
Long-Term Debt: | |||
4.00% Convertible Senior Notes due 2024 (Carrying value) | $ 156 | $ 0 | |
Stated interest rate | 4.00% | 4.00% |
Debt - Narrative (Details) |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
May 28, 2019
USD ($)
$ / shares
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Debt Instrument [Line Items] | |||
Interest expense | $ 1,000,000 | $ 1,000,000 | |
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 | ||
Conversion ratio | 0.0448179 | ||
Initial conversion price | $ / 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 | $ 156,000,000 | $ 156,000,000 | |
Maximum | Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | |||
Debt Instrument [Line Items] | |||
Conversion ratio | 0.0571428 | ||
Term Loans | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0.58% |
Debt - Schedule of Notes (Details) - Convertible Senior Notes - 4% Convertible Senior Dotes due 2024 - USD ($) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal amount (face value) | $ 207,000,000 | $ 0 |
Unamortized issuance cost | (5,000,000) | 0 |
Unamortized debt discount | (46,000,000) | 0 |
4% Convertible Senior Notes due 2024 (Carrying value) | $ 156,000,000 | $ 0 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax benefit / (expense) | $ 10 | $ (3) | $ 4 | $ (10) |
Net discrete (benefit) expense related to changes in valuation allowance | 8 | $ (1) | 5 | $ (1) |
Convertible notes, tax benefit | $ 5 | $ 5 |
Inventories - Components of Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 114 | $ 108 |
Work in progress | 10 | 15 |
Finished products | 58 | 71 |
Inventories | 182 | 194 |
Inventory valuation reserve | (24) | (23) |
Total inventories, net of reserve | $ 158 | $ 172 |
Equity Method Investment - Narrative (Details) kr in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
investment
|
Jun. 30, 2019
SEK (kr)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
SEK (kr)
|
Jun. 30, 2019
USD ($)
investment
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Schedule of Equity Method Investments [Line Items] | ||||||||
Number of equity method investments | investment | 1 | 1 | ||||||
Loss from equity method investment | $ 18 | $ 16 | $ 35 | $ 30 | ||||
Equity investments after consideration of foreign exchange movements | 73 | 73 | $ 101 | |||||
Zenuity | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percentage in joint venture | 50.00% | 50.00% | ||||||
Cash contribution to joint venture | 11 | kr 100 | $ 71 | kr 600 | ||||
Loss from equity method investment | 18 | $ 16 | 35 | $ 30 | ||||
Equity investments after consideration of foreign exchange movements | $ 73 | $ 73 | $ 101 | |||||
Zenuity | Volvo Cars | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Ownership percentage in joint venture | 50.00% | 50.00% |
Equity Method Investment - Summary of Unaudited Income Statement Information (Details) - Zenuity - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Net sales | $ 0 | $ 2 | $ 1 | $ 3 |
Gross profit | 0 | 0 | 0 | 0 |
Operating loss | (35) | (32) | (69) | (60) |
Loss before income taxes | (35) | (32) | (69) | (60) |
Net loss | $ (36) | $ (32) | $ (69) | $ (60) |
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Loss Contingencies [Line Items] | ||
Operating related accruals | $ 53 | $ 55 |
Employee related accruals | 76 | 66 |
Customer pricing accruals | 41 | 39 |
Product related liabilities | 14 | 16 |
Other accruals | 23 | 18 |
Total Accrued Expenses | 207 | 193 |
Affiliated Entity | ||
Loss Contingencies [Line Items] | ||
Product related liabilities | $ 10 | $ 14 |
Retirement Plans - Schedule of Components of Net Periodic Benefit Cost (Details) - Pension Plans, Defined Benefit - Existing Veoneer Plans - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 1 | $ 1 | $ 3 | $ 2 |
Interest cost | 0 | 1 | 1 | 1 |
Expected return on plan assets | (1) | 0 | (1) | (1) |
Net periodic benefit cost | $ 0 | $ 2 | $ 3 | $ 2 |
Retirement Plans - Narrative (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Apr. 01, 2018 |
|
Transferred Veoneer Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Benefit plan obligations | $ 6 | |||||
Defined benefit plan net periodic benefit cost (less than) | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 | |
Autoliv Sponsored Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined benefit plan expense and contributions prior to the plans amendment (less than) | $ 1 |
Contingent Liabilities - Narrative (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Loss Contingencies [Line Items] | ||
Other current assets | $ 19 | $ 22 |
Guarantee obligations | 7 | $ 8 |
Indemnification Asset | ||
Loss Contingencies [Line Items] | ||
Other current assets | $ 10 |
Contingent Liabilities - Schedule of Change in Balance Sheet Position of Product Related Liabilities (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Product Warranty Accrual [Roll Forward] | ||||
Reserve at beginning of the period | $ 14 | $ 23 | $ 16 | $ 22 |
Change in reserve | 2 | 1 | 1 | 8 |
Cash payments | (1) | (1) | (3) | (7) |
Reserve at end of the period | $ 14 | $ 23 | $ 14 | $ 23 |
Loss per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Basic and diluted: | ||||
Net loss attributable to Veoneer | $ (133) | $ (63) | $ (270) | $ (95) |
Denominator: | ||||
Basic: Weighted average number of shares outstanding (in millions) (in shares) | 96,060 | 87,130 | 91,680 | 87,130 |
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions) (in shares) | 96,060 | 87,130 | 91,680 | 87,130 |
Basic loss per share (in dollars per share) | $ (1.39) | $ (0.72) | $ (2.94) | $ (1.09) |
Diluted loss per share (in dollars per share) | $ (1.39) | $ (0.72) | $ (2.94) | $ (1.09) |
Loss per share - Narrative (Details) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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) | 290,483 | 0 | 301,898 | 0 | |
Convertible Debt Securities | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Shares excluded from calculation (in shares) | 3,364,297 | 0 | 1,691,442 | 0 | |
Convertible Senior Notes | 4% Convertible Senior Dotes due 2024 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Initial conversion price | $ 22.3125 |
Segment Information - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Relationship with Former Parent and Related Entities - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 14, 2019 |
Dec. 31, 2018 |
Jun. 29, 2018 |
|
Related Party Transaction [Line Items] | |||||||
Cash and cash equivalents | $ 1,204 | $ 1,204 | $ 864 | $ 1,000 | |||
Autoliv | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 26 | $ 39 | 52 | $ 80 | |||
Autoliv | Transition Services Agreement | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Expense under the TSA | 1 | 3 | 3 | 3 | |||
Income under the TSA | 1 | $ 1 | 1 | $ 3 | |||
Veoneer Nissin Brakes Systems | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Capital lease arrangements | $ 12 | $ 12 | $ 13 | ||||
Veoneer Nissin Brakes Systems | |||||||
Related Party Transaction [Line Items] | |||||||
Minority ownership percentage | 49.00% | 49.00% | 49.00% | ||||
Majority ownership percentage | 51.00% | 51.00% | 51.00% |
Relationship with Former Parent and Related Entities - Summary of Amount Due to and from Related Parties (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Related Party Transactions [Abstract] | ||
Related party receivable | $ 16 | $ 64 |
Related party notes receivable | 0 | 1 |
Related party payables | 12 | 16 |
Related party short-term debt | 3 | 1 |
Related party long-term debt | $ 12 | $ 13 |
Factoring (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Receivables [Abstract] | |
Sale of trade receivables | $ 36 |
Sale of bank notes without recourse | 23 |
Trade notes receivables | $ 7 |
Subsequent Events (Details) - Zenuity kr in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 26, 2019
USD ($)
|
Jul. 26, 2019
SEK (kr)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
SEK (kr)
|
Mar. 31, 2018
USD ($)
|
Mar. 31, 2018
SEK (kr)
|
|
Subsequent Event [Line Items] | ||||||
Cash contribution to joint venture | $ 11 | kr 100 | $ 71 | kr 600 | ||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash contribution to joint venture | $ 21 | kr 200 |
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