☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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82-3720890
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Klarabergsviadukten 70, Section C6
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Box 13089
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock, $1.00 par value
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VNE
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New York Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging Growth Company
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☐
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Page
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
Note 3
|
$
|
462
|
|
|
$
|
526
|
|
|
$
|
1,446
|
|
|
$
|
1,692
|
|
Cost of sales
|
|
(389
|
)
|
|
(428
|
)
|
|
(1,211
|
)
|
|
(1,371
|
)
|
||||
Gross profit
|
|
73
|
|
|
99
|
|
|
235
|
|
|
321
|
|
||||
Selling, general and administrative expenses
|
|
(45
|
)
|
|
(44
|
)
|
|
(148
|
)
|
|
(112
|
)
|
||||
Research, development and engineering expenses, net
|
|
(144
|
)
|
|
(109
|
)
|
|
(459
|
)
|
|
(334
|
)
|
||||
Amortization of intangibles
|
|
(6
|
)
|
|
(5
|
)
|
|
(17
|
)
|
|
(16
|
)
|
||||
Other income, net
|
|
—
|
|
|
1
|
|
|
1
|
|
|
18
|
|
||||
Operating loss
|
|
(122
|
)
|
|
(58
|
)
|
|
(388
|
)
|
|
(122
|
)
|
||||
Loss from equity method investment
|
Note 9
|
(16
|
)
|
|
(15
|
)
|
|
(50
|
)
|
|
(45
|
)
|
||||
Interest income
|
|
7
|
|
|
3
|
|
|
14
|
|
|
4
|
|
||||
Interest expense
|
|
(5
|
)
|
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
||||
Other non-operating items, net
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Loss before income taxes
|
Note 15
|
(136
|
)
|
|
(70
|
)
|
|
(430
|
)
|
|
(163
|
)
|
||||
Income tax benefit / (expense)
|
Note 7
|
(3
|
)
|
|
(3
|
)
|
|
1
|
|
|
(12
|
)
|
||||
Net loss
|
|
(139
|
)
|
|
(72
|
)
|
|
(429
|
)
|
|
(175
|
)
|
||||
Less: Net loss attributable to non-controlling interest
|
|
(6
|
)
|
|
(5
|
)
|
|
(26
|
)
|
|
(13
|
)
|
||||
Net loss attributable to controlling interest
|
|
$
|
(133
|
)
|
|
$
|
(68
|
)
|
|
$
|
(403
|
)
|
|
$
|
(162
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - basic
|
Note 14
|
$
|
(1.20
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(4.10
|
)
|
|
$
|
(1.86
|
)
|
Net loss per share - diluted
|
|
$
|
(1.20
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(4.10
|
)
|
|
$
|
(1.86
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding,
(in millions)
|
|
111.40
|
|
|
87.15
|
|
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98.32
|
|
|
87.15
|
|
||||
Weighted average number of shares outstanding,
assuming dilution (in millions)
|
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111.40
|
|
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87.15
|
|
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98.32
|
|
|
87.15
|
|
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Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net loss
|
$
|
(139
|
)
|
|
$
|
(72
|
)
|
|
$
|
(429
|
)
|
|
$
|
(175
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
||||||||
Change in cumulative translation adjustment
|
(27
|
)
|
|
(2
|
)
|
|
(40
|
)
|
|
(6
|
)
|
||||
Net change in cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Pension liability
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Other comprehensive income (loss), before tax
|
(27
|
)
|
|
(3
|
)
|
|
(40
|
)
|
|
(7
|
)
|
||||
Expense for taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss), net of tax
|
(27
|
)
|
|
(3
|
)
|
|
(40
|
)
|
|
(7
|
)
|
||||
Comprehensive loss
|
(166
|
)
|
|
(75
|
)
|
|
(469
|
)
|
|
(182
|
)
|
||||
Less: Comprehensive loss attributable to non-controlling interest
|
(7
|
)
|
|
(9
|
)
|
|
(26
|
)
|
|
(16
|
)
|
||||
Comprehensive loss attributable to controlling interest
|
$
|
(159
|
)
|
|
$
|
(66
|
)
|
|
$
|
(443
|
)
|
|
$
|
(166
|
)
|
|
|
|
(unaudited)
|
|
|
||||
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|
September 30, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
$
|
1,062
|
|
|
$
|
864
|
|
Short-term investments
|
|
|
—
|
|
|
5
|
|
||
Receivables, net
|
|
|
309
|
|
|
376
|
|
||
Inventories, net
|
Note 8
|
|
159
|
|
|
172
|
|
||
Related party receivables
|
Note 16
|
|
14
|
|
|
64
|
|
||
Prepaid expenses
|
|
|
46
|
|
|
39
|
|
||
Other current assets
|
|
|
12
|
|
|
22
|
|
||
Total current assets
|
|
|
1,602
|
|
|
1,543
|
|
||
Property, plant and equipment, net
|
|
|
570
|
|
|
499
|
|
||
Operating lease right-of-use assets
|
|
|
99
|
|
|
—
|
|
||
Equity method investment
|
Note 9
|
|
75
|
|
|
101
|
|
||
Goodwill
|
|
|
290
|
|
|
291
|
|
||
Intangible assets, net
|
|
|
87
|
|
|
102
|
|
||
Deferred tax assets
|
|
|
11
|
|
|
11
|
|
||
Related party notes receivables
|
Note 16
|
|
—
|
|
|
1
|
|
||
Investments
|
|
|
10
|
|
|
8
|
|
||
Other non-current assets
|
|
|
111
|
|
|
77
|
|
||
Total assets
|
|
|
$
|
2,855
|
|
|
$
|
2,632
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
||
Accounts payable
|
|
|
$
|
317
|
|
|
$
|
369
|
|
Short-term debt
|
Note 5
|
|
21
|
|
|
—
|
|
||
Related party payables
|
Note 16
|
|
4
|
|
|
16
|
|
||
Accrued expenses
|
Note 10
|
|
227
|
|
|
193
|
|
||
Income tax payable
|
|
|
6
|
|
|
9
|
|
||
Related party short-term debt
|
|
|
2
|
|
|
1
|
|
||
Other current liabilities
|
|
|
36
|
|
|
47
|
|
||
Total current liabilities
|
|
|
613
|
|
|
636
|
|
||
4.00% Convertible Senior Notes due 2024
|
Note 5
|
|
158
|
|
|
—
|
|
||
Related party long-term debt
|
Note 16
|
|
12
|
|
|
13
|
|
||
Pension liability
|
Note 11
|
|
21
|
|
|
20
|
|
||
Deferred tax liabilities
|
|
|
12
|
|
|
13
|
|
||
Operating lease non-current liabilities
|
Note 4
|
|
81
|
|
|
—
|
|
||
Finance lease non-current liabilities
|
Note 4
|
|
33
|
|
|
1
|
|
||
Other non-current liabilities
|
|
|
25
|
|
|
24
|
|
||
Total non-current liabilities
|
|
|
342
|
|
|
70
|
|
||
Equity
|
|
|
|
|
|
|
|
||
Common stock (par value $1.00, 325 million shares authorized, 111 million and 87 million shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively)
|
|
|
111
|
|
|
87
|
|
||
Additional paid-in capital
|
|
|
2,343
|
|
|
1,938
|
|
||
Accumulated deficit
|
|
|
(584
|
)
|
|
(181
|
)
|
||
Accumulated other comprehensive loss
|
|
|
(59
|
)
|
|
(19
|
)
|
||
Total equity
|
|
|
1,811
|
|
|
1,826
|
|
||
Non-controlling interest
|
|
|
89
|
|
|
101
|
|
||
Total equity and non-controlling interest
|
|
|
1,900
|
|
|
1,927
|
|
||
Total liabilities, equity and non-controlling interest
|
|
|
$
|
2,855
|
|
|
$
|
2,632
|
|
|
Nine months ended September 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
|
$
|
87
|
|
|
$
|
1,938
|
|
|
$
|
(181
|
)
|
|
$
|
(19
|
)
|
|
$
|
101
|
|
|
$
|
1,927
|
|
Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(403
|
)
|
|
—
|
|
|
(26
|
)
|
|
(429
|
)
|
||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||
Stock based compensation expense
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
Issuance of common stock
|
24
|
|
|
379
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
403
|
|
||||||
Purchase of minority interest
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||||
Equity component of issuance of
convertible notes, net of taxes
(Note 5)
|
—
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
||||||
Total Comprehensive Income (Loss)
|
24
|
|
|
405
|
|
|
(403
|
)
|
|
(40
|
)
|
|
(12
|
)
|
|
(26
|
)
|
||||||
Balance at end of period
|
$
|
111
|
|
|
$
|
2,343
|
|
|
$
|
(584
|
)
|
|
$
|
(59
|
)
|
|
$
|
89
|
|
|
$
|
1,900
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||||||||||
|
Equity attributable to
|
||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid In Capital
|
|
Net Former Parent Investment
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive Loss
|
|
Non-controlling
Interest
|
|
Total
|
||||||||||||||
Balance at beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
844
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
121
|
|
|
$
|
957
|
|
Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
(68
|
)
|
|
—
|
|
|
(13
|
)
|
|
(175
|
)
|
|||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|||||||
Net change in cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Pension liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||||
Reclassification of Net Former Parent investment and issuance of ordinary shares in connection with separation
|
87
|
|
|
1,926
|
|
|
(2,002
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||||
Stock based compensation expense
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Total Comprehensive Income (Loss)
|
87
|
|
|
1,929
|
|
|
(2,097
|
)
|
|
(68
|
)
|
|
(4
|
)
|
|
(16
|
)
|
|
(169
|
)
|
|||||||
Net transfers from Former Parent
|
—
|
|
|
—
|
|
|
1,253
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1,252
|
|
|||||||
Balance at end of period
|
$
|
87
|
|
|
$
|
1,929
|
|
|
$
|
—
|
|
|
$
|
(68
|
)
|
|
$
|
(12
|
)
|
|
$
|
104
|
|
|
$
|
2,040
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(429
|
)
|
|
$
|
(175
|
)
|
Depreciation and amortization
|
90
|
|
|
82
|
|
||
Undistributed loss from equity method investments
|
50
|
|
|
45
|
|
||
Stock-based compensation
|
5
|
|
|
—
|
|
||
Deferred income taxes
|
(7
|
)
|
|
—
|
|
||
Contingent consideration write-down
|
—
|
|
|
(14
|
)
|
||
Other, net
|
(7
|
)
|
|
(49
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Receivables, gross
|
48
|
|
|
13
|
|
||
Accrued expenses
|
42
|
|
|
51
|
|
||
Related party receivables and payables, net
|
37
|
|
|
(58
|
)
|
||
Accounts payable
|
(18
|
)
|
|
—
|
|
||
Prepaid expenses
|
(10
|
)
|
|
(7
|
)
|
||
Inventories, gross
|
1
|
|
|
(16
|
)
|
||
Income taxes
|
—
|
|
|
(31
|
)
|
||
Other current assets and liabilities, net
|
(23
|
)
|
|
(22
|
)
|
||
Net cash used in operating activities
|
(221
|
)
|
|
(181
|
)
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Capital expenditures
|
(168
|
)
|
|
(123
|
)
|
||
Equity method investment
|
(32
|
)
|
|
(71
|
)
|
||
Short-term investments mature into cash
|
5
|
|
|
(5
|
)
|
||
Long term investments
|
(3
|
)
|
|
—
|
|
||
Net decrease in related party notes receivable
|
—
|
|
|
76
|
|
||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
3
|
|
||
Net cash used in investing activities
|
(198
|
)
|
|
(120
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Issuance of common stock
|
405
|
|
|
—
|
|
||
Proceeds from long-term debt
|
206
|
|
|
—
|
|
||
Proceeds from short-term debt
|
22
|
|
|
—
|
|
||
Proceeds from related party short-term debt
|
1
|
|
|
—
|
|
||
Cash provided at separation by Former Parent
|
—
|
|
|
980
|
|
||
Net transfers from Former Parent
|
—
|
|
|
275
|
|
||
Decrease in related party long-term debt
|
—
|
|
|
(49
|
)
|
||
Net cash provided by financing activities
|
634
|
|
|
1,206
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(17
|
)
|
|
14
|
|
||
Increase in cash and cash equivalents
|
198
|
|
|
919
|
|
||
Cash and cash equivalents at beginning of period
|
864
|
|
|
—
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,062
|
|
|
$
|
919
|
|
|
|
|
(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
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
75
|
|
Current liabilities
|
|
|
|
|
|
|
|||||
Other current liabilities
|
—
|
|
|
16
|
|
|
16
|
|
|||
Non-current liabilities
|
|
|
|
|
|
|
|||||
Operating lease non-current liabilities
|
—
|
|
|
57
|
|
|
57
|
|
|||
Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(181
|
)
|
|
—
|
|
|
(181
|
)
|
|
Three Months Ended September 30, 2019
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||
(Dollars in millions)
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Asia
|
$
|
80
|
|
|
$
|
77
|
|
|
$
|
157
|
|
|
$
|
98
|
|
|
$
|
85
|
|
|
$
|
183
|
|
Americas
|
133
|
|
|
14
|
|
|
147
|
|
|
166
|
|
|
15
|
|
|
181
|
|
||||||
Europe
|
158
|
|
|
—
|
|
|
158
|
|
|
163
|
|
|
—
|
|
|
163
|
|
||||||
Total net sales
|
$
|
371
|
|
|
$
|
91
|
|
|
$
|
462
|
|
|
$
|
426
|
|
|
$
|
100
|
|
|
$
|
526
|
|
|
Nine Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
(Dollars in millions)
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Asia
|
$
|
259
|
|
|
$
|
229
|
|
|
$
|
488
|
|
|
$
|
314
|
|
|
$
|
280
|
|
|
$
|
594
|
|
Americas
|
432
|
|
|
46
|
|
|
478
|
|
|
517
|
|
|
45
|
|
|
562
|
|
||||||
Europe
|
480
|
|
|
—
|
|
|
480
|
|
|
537
|
|
|
—
|
|
|
537
|
|
||||||
Total net sales
|
$
|
1,171
|
|
|
$
|
275
|
|
|
$
|
1,446
|
|
|
$
|
1,367
|
|
|
$
|
325
|
|
|
$
|
1,692
|
|
|
Three Months Ended September 30, 2019
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||
(Dollars in millions)
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Restraint Control Systems
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
226
|
|
Active Safety products
|
178
|
|
|
—
|
|
|
178
|
|
|
201
|
|
|
—
|
|
|
201
|
|
||||||
Brake Systems
|
—
|
|
|
91
|
|
|
91
|
|
|
—
|
|
|
100
|
|
|
100
|
|
||||||
Total net sales
|
$
|
371
|
|
|
$
|
91
|
|
|
$
|
462
|
|
|
$
|
426
|
|
|
$
|
100
|
|
|
$
|
526
|
|
|
Nine Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||
(Dollars in millions)
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Restraint Control Systems
|
$
|
617
|
|
|
$
|
—
|
|
|
$
|
617
|
|
|
$
|
739
|
|
|
$
|
—
|
|
|
$
|
739
|
|
Active Safety products
|
554
|
|
|
—
|
|
|
554
|
|
|
628
|
|
|
—
|
|
|
628
|
|
||||||
Brake Systems
|
—
|
|
|
275
|
|
|
275
|
|
|
—
|
|
|
325
|
|
|
325
|
|
||||||
Total net sales
|
$
|
1,171
|
|
|
$
|
275
|
|
|
$
|
1,446
|
|
|
$
|
1,367
|
|
|
$
|
325
|
|
|
$
|
1,692
|
|
(Dollars in millions)
|
Three months ended
September 30, 2019 |
|
Nine months ended
September 30, 2019 |
||||
Operating lease cost
|
$
|
7
|
|
|
$
|
18
|
|
Finance lease cost
|
|
|
|
||||
Amortization of right-of-use assets
|
1
|
|
|
2
|
|
||
Interest on lease liabilities
|
—
|
|
|
1
|
|
||
Total finance lease cost
|
1
|
|
|
3
|
|
||
Short-term lease cost
|
—
|
|
|
—
|
|
||
Variable lease cost
|
—
|
|
|
—
|
|
||
Total lease cost
|
$
|
8
|
|
|
$
|
21
|
|
Supplemental Cash Flows Information
|
Nine months ended
September 30, 2019
|
||
(Dollars in millions)
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows used for operating leases
|
$
|
16
|
|
Operating cash flows used for finance leases
|
1
|
|
|
Financing cash flows used for finance leases
|
1
|
|
|
Right-of-use assets obtained in exchange for new lease obligations:
|
|
||
Operating leases
|
46
|
|
|
Finance leases
|
33
|
|
|
As of
|
|
(Lease term in years and discount rate)
|
September 30, 2019
|
|
Weighted-average remaining lease term
|
|
|
Operating Leases
|
8
|
|
Finance Leases
|
11
|
|
Weighted-average discount rate
|
|
|
Operating leases
|
3.9
|
%
|
Finance leases
|
4.9
|
%
|
(Dollars in millions)
|
Operating Leases
|
|
Finance Leases
|
||||
2019 (excluding the nine months ended September 30, 2019)
|
$
|
6
|
|
|
$
|
1
|
|
2020
|
21
|
|
|
4
|
|
||
2021
|
16
|
|
|
15
|
|
||
2022
|
14
|
|
|
3
|
|
||
2023
|
13
|
|
|
3
|
|
||
Thereafter
|
49
|
|
|
37
|
|
||
Total lease payments
|
119
|
|
|
63
|
|
||
Less imputed interest
|
20
|
|
|
17
|
|
||
Total lease liabilities
|
$
|
99
|
|
|
$
|
46
|
|
(Dollars in millions)
|
Operating Leases
|
|
Finance Leases
|
||||
Other current liabilities
|
$
|
18
|
|
|
$
|
1
|
|
Lease liabilities - non current
|
81
|
|
|
33
|
|
||
Related party leases
|
—
|
|
|
12
|
|
||
Total lease liabilities
|
$
|
99
|
|
|
$
|
46
|
|
|
|
As of
|
||||||
(Dollars in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Short-Term Debt:
|
|
|
|
|
||||
Short-term borrowings
|
|
$
|
21
|
|
|
$
|
—
|
|
Long-Term Debt:
|
|
|
|
|
||||
4.00% Convertible Senior Notes due 2024 (Carrying value)
|
|
158
|
|
|
—
|
|
||
Other long-term borrowings
|
|
4
|
|
|
|
|||
Total Debt
|
|
$
|
183
|
|
|
$
|
—
|
|
4.00% Convertible Senior Notes due 2024
|
|
As of
|
||||||
(Dollars in millions)
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Principal amount (face value)
|
|
$
|
207
|
|
|
$
|
—
|
|
Unamortized issuance cost
|
|
(5
|
)
|
|
—
|
|
||
Unamortized debt discount
|
|
(44
|
)
|
|
—
|
|
||
Net Carrying value
|
|
$
|
158
|
|
|
$
|
—
|
|
|
As of
|
||||||
(Dollars in millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
109
|
|
|
$
|
108
|
|
Work in progress
|
10
|
|
|
15
|
|
||
Finished products
|
63
|
|
|
71
|
|
||
Inventories
|
182
|
|
|
194
|
|
||
Inventory valuation reserve
|
(23
|
)
|
|
(23
|
)
|
||
Total inventories, net of reserve
|
$
|
159
|
|
|
$
|
172
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net sales
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Gross profit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Operating loss
|
(31
|
)
|
|
(31
|
)
|
|
(100
|
)
|
|
(90
|
)
|
||||
Loss before income taxes
|
(31
|
)
|
|
(30
|
)
|
|
(100
|
)
|
|
(90
|
)
|
||||
Net loss
|
(31
|
)
|
|
(30
|
)
|
|
(101
|
)
|
|
(90
|
)
|
|
As of
|
||||||
(Dollars in millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Operating related accruals
|
$
|
59
|
|
|
$
|
55
|
|
Employee related accruals
|
82
|
|
|
66
|
|
||
Customer pricing accruals
|
41
|
|
|
39
|
|
||
Product related liabilities1
|
14
|
|
|
16
|
|
||
Other accruals
|
31
|
|
|
18
|
|
||
Total Accrued Expenses
|
$
|
227
|
|
|
$
|
193
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
||||
Net periodic benefit cost
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
3
|
|
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 September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reserve at beginning of the period
|
$
|
14
|
|
|
$
|
23
|
|
|
$
|
16
|
|
|
$
|
22
|
|
Change in reserve
|
—
|
|
|
1
|
|
|
1
|
|
|
10
|
|
||||
Cash payments
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(8
|
)
|
||||
Reserve at end of the period
|
$
|
14
|
|
|
$
|
24
|
|
|
$
|
14
|
|
|
$
|
24
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(Dollars in millions, except per share amounts)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Veoneer
|
$
|
(133
|
)
|
|
$
|
(68
|
)
|
|
$
|
(403
|
)
|
|
$
|
(162
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic: Weighted average number of shares outstanding (in millions)
|
111.40
|
|
|
87.15
|
|
|
98.32
|
|
|
87.15
|
|
||||
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1
|
111.40
|
|
|
87.15
|
|
|
98.32
|
|
|
87.15
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic loss per share
|
$
|
(1.20
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(4.10
|
)
|
|
$
|
(1.86
|
)
|
Diluted loss per share
|
$
|
(1.20
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(4.10
|
)
|
|
$
|
(1.86
|
)
|
Loss Before Income Taxes
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(Dollars in millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Electronics
|
$
|
(90
|
)
|
|
$
|
(36
|
)
|
|
$
|
(281
|
)
|
|
$
|
(66
|
)
|
Brake Systems
|
(17
|
)
|
|
(9
|
)
|
|
(54
|
)
|
|
(23
|
)
|
||||
Segment operating loss
|
(107
|
)
|
|
(45
|
)
|
|
(335
|
)
|
|
(88
|
)
|
||||
Corporate and other
|
(15
|
)
|
|
(13
|
)
|
|
(53
|
)
|
|
(34
|
)
|
||||
Interest and other non-operating items, net
|
2
|
|
|
4
|
|
|
8
|
|
|
4
|
|
||||
Loss from equity method investment
|
(16
|
)
|
|
(15
|
)
|
|
(50
|
)
|
|
(45
|
)
|
||||
Loss before income taxes
|
$
|
(136
|
)
|
|
$
|
(70
|
)
|
|
$
|
(430
|
)
|
|
$
|
(163
|
)
|
Related Party
|
As of
|
||||||
(Dollars in millions)
|
September 30, 2019
|
|
December 31, 2018
|
||||
Related party receivable
|
$
|
14
|
|
|
$
|
64
|
|
Related party notes receivable
|
—
|
|
|
1
|
|
||
Related party payables
|
4
|
|
|
16
|
|
||
Related party short-term debt
|
2
|
|
|
1
|
|
||
Related party long-term debt
|
12
|
|
|
13
|
|
•
|
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
|
|||||||
Third Quarter (IHS at 16-October-2019)
|
5.6
|
|
|
2.3
|
|
|
2.9
|
|
|
4.6
|
|
|
4.7
|
|
|
0.5
|
|
|
20.5
|
|
Change vs. Prior Year
|
(6
|
)%
|
|
7
|
%
|
|
(10
|
)%
|
|
(2
|
)%
|
|
1
|
%
|
|
(24
|
)%
|
|
(3
|
)%
|
|
Light Vehicle Production by Region - 2019
|
|||||||||||||||||||
(Millions, except where specified)
|
China
|
|
Japan
|
|
Rest of Asia
|
|
Americas
|
|
Europe
|
|
Other
|
|
Total
|
|||||||
Full Year (IHS at 16-October-2019)
|
23.2
|
|
|
9.1
|
|
|
12.2
|
|
|
18.4
|
|
|
21.2
|
|
|
1.9
|
|
|
85.9
|
|
Change vs. Prior Year
|
(9
|
)%
|
|
—
|
%
|
|
(7
|
)%
|
|
(4
|
)%
|
|
(3
|
)%
|
|
(25
|
)%
|
|
(6
|
)%
|
Net Sales
|
Three Months Ended September 30
|
|
Components of Change vs. Prior Year
|
||||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported
Change
|
Currency
|
|
Organic1
|
|||||||||||||||||
$
|
$
|
$
|
%
|
$
|
%
|
$
|
%
|
||||||||||||||||||
Restraint Control Systems
|
193
|
|
|
226
|
|
|
(33
|
)
|
(15
|
)
|
|
(4
|
)
|
(2
|
)
|
|
(29
|
)
|
(13
|
)
|
|||||
Active Safety
|
178
|
|
|
201
|
|
|
(23
|
)
|
(11
|
)
|
|
(7
|
)
|
(3
|
)
|
|
(15
|
)
|
(8
|
)
|
|||||
Brake Systems
|
91
|
|
|
100
|
|
|
(9
|
)
|
(9
|
)
|
|
1
|
|
1
|
|
|
(10
|
)
|
(10
|
)
|
|||||
Total
|
$
|
462
|
|
|
$
|
526
|
|
|
$
|
(64
|
)
|
(12
|
)%
|
|
$
|
(10
|
)
|
(2
|
)%
|
|
$
|
(54
|
)
|
(10
|
)%
|
Electronics Segment
|
Three Months Ended September 30
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
Currency
|
|
Organic1
|
||||||||||||||||
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
|||||||||||||||
Net Sales
|
371
|
|
|
|
426
|
|
|
|
(55
|
)
|
(13
|
)
|
|
(11
|
)
|
(3
|
)
|
|
(44
|
)
|
(10
|
)
|
||
Operating Loss / Margin
|
(90
|
)
|
(24.3
|
)
|
|
(36
|
)
|
(8.4
|
)
|
|
(54
|
)
|
|
|
|
|
|
|
|
|||||
Segment EBITDA1 / Margin
|
(69
|
)
|
(18.5
|
)
|
|
(18
|
)
|
(4.2
|
)
|
|
(51
|
)
|
|
|
|
|
|
|
|
|||||
Associates
|
7,616
|
|
|
|
6,804
|
|
|
|
812
|
|
|
|
|
|
|
|
|
Brake Systems Segment
|
Three Months Ended September 30
|
|
Components of Change vs. Prior Year
|
||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
Currency
|
|
Organic1
|
|||||||||||||||
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
||||||||||||||
Net Sales
|
91
|
|
|
|
100
|
|
|
|
(9
|
)
|
(9
|
)
|
|
1
|
|
1
|
|
(10
|
)
|
(10
|
)
|
||
Operating Loss / Margin
|
(17
|
)
|
(18.6
|
)
|
|
(9
|
)
|
(9.0
|
)
|
|
(8
|
)
|
|
|
|
|
|
|
|
||||
Segment EBITDA1 / Margin
|
(8
|
)
|
(9.3
|
)
|
|
—
|
|
0.1
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
||||
Associates
|
1,467
|
|
|
|
1,467
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Corporate and Other
|
Three Months Ended September 30
|
||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
||||||
$
|
%
|
$
|
%
|
|
$
|
%
|
|||||
Net Sales
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operating Loss / Margin
|
(15
|
)
|
—
|
|
(13
|
)
|
—
|
|
(2
|
)
|
|
EBITDA1 / Margin
|
(15
|
)
|
—
|
|
(13
|
)
|
—
|
|
(2
|
)
|
|
Associates
|
45
|
|
|
|
39
|
|
|
|
6
|
|
|
Income Statement
|
Three Months Ended September 30
|
||||||||||||||
(Dollars in millions, except per share data)
|
2019
|
|
2018
|
|
|
||||||||||
$
|
%
|
$
|
%
|
Change
|
|||||||||||
Net sales
|
$
|
462
|
|
|
|
$
|
526
|
|
|
|
$
|
(64
|
)
|
||
Cost of sales
|
(389)
|
|
(84.2
|
)%
|
|
(428)
|
|
(81.2
|
)%
|
|
39
|
|
|||
Gross profit
|
73
|
|
15.8
|
%
|
|
99
|
|
18.8
|
%
|
|
(26
|
)
|
|||
Selling, general & administrative expenses
|
(45
|
)
|
(9.8
|
)%
|
|
(44
|
)
|
(8.3
|
)%
|
|
(1
|
)
|
|||
Research, development & engineering expenses, net
|
(144
|
)
|
(31.3
|
)%
|
|
(109
|
)
|
(20.7
|
)%
|
|
(35
|
)
|
|||
Amortization of intangibles
|
(6
|
)
|
(1.2
|
)%
|
|
(5
|
)
|
(1.0
|
)%
|
|
(1
|
)
|
|||
Other income
|
—
|
|
—
|
%
|
|
1
|
|
0.2
|
%
|
|
(1
|
)
|
|||
Operating loss
|
(122
|
)
|
(26.5
|
)%
|
|
(58
|
)
|
(11.0
|
)%
|
|
(64
|
)
|
|||
Loss from equity method investments
|
(16
|
)
|
(3.4
|
)%
|
|
(15
|
)
|
(2.9
|
)%
|
|
(1
|
)
|
|||
Interest income
|
7
|
|
1.4
|
%
|
|
3
|
|
0.6
|
%
|
|
4
|
|
|||
Interest expense
|
(5
|
)
|
(1.0
|
)%
|
|
—
|
|
—
|
%
|
|
(5
|
)
|
|||
Other non-operating items, net
|
—
|
|
—
|
%
|
|
1
|
|
0.2
|
%
|
|
(1
|
)
|
|||
Loss before income taxes
|
(136
|
)
|
(29.4
|
)%
|
|
(70
|
)
|
(13.2
|
)%
|
|
(67
|
)
|
|||
Income tax expense
|
(3
|
)
|
(0.6
|
)%
|
|
(3
|
)
|
(0.6
|
)%
|
|
—
|
|
|||
Net loss1
|
(139
|
)
|
(30.0
|
)%
|
|
(72
|
)
|
(13.8
|
)%
|
|
(67
|
)
|
|||
Less: Net loss attributable to non-controlling interest
|
(6
|
)
|
(1.2
|
)%
|
|
(5
|
)
|
(0.9
|
)%
|
|
(1
|
)
|
|||
Net loss attributable to controlling interest
|
$
|
(133
|
)
|
(28.8
|
)%
|
|
$
|
(68
|
)
|
(12.9
|
)%
|
|
$
|
(66
|
)
|
Net loss per share – basic2
|
$
|
(1.20
|
)
|
|
|
$
|
(0.78
|
)
|
|
|
$
|
(0.41
|
)
|
||
Weighted average number of shares outstanding 2
|
111.40
|
|
|
|
87.15
|
|
|
|
24.25
|
|
Net Sales
|
Nine Months Ended September 30
|
|
Components of Change vs. Prior Year
|
||||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported
Change
|
Currency
|
|
Organic1
|
|||||||||||||||||
$
|
$
|
$
|
%
|
$
|
%
|
$
|
%
|
||||||||||||||||||
Restraint Control Systems
|
617
|
|
|
739
|
|
|
(122
|
)
|
(16
|
)
|
|
(26
|
)
|
(4
|
)
|
|
(96
|
)
|
(13
|
)
|
|||||
Active Safety
|
554
|
|
|
628
|
|
|
(74
|
)
|
(12
|
)
|
|
(31
|
)
|
(5
|
)
|
|
(43
|
)
|
(7
|
)
|
|||||
Brake Systems
|
275
|
|
|
325
|
|
|
(50
|
)
|
(15
|
)
|
|
(5
|
)
|
(2
|
)
|
|
(45
|
)
|
(14
|
)
|
|||||
Total
|
$
|
1,446
|
|
|
$
|
1,692
|
|
|
$
|
(246
|
)
|
(15
|
)%
|
|
$
|
(62
|
)
|
(4
|
)%
|
|
$
|
(184
|
)
|
(11
|
)%
|
Electronics Segment
|
Nine Months Ended September 30
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
Currency
|
|
Organic1
|
||||||||||||||||
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
|||||||||||||||
Net Sales
|
1,171
|
|
|
|
1,367
|
|
|
|
(196
|
)
|
(14
|
)
|
|
(57
|
)
|
(4
|
)
|
|
(139
|
)
|
(10
|
)
|
||
Operating Loss / Margin
|
(281
|
)
|
(24.0
|
)
|
|
(66
|
)
|
(4.8
|
)
|
|
(215
|
)
|
|
|
|
|
|
|
|
|||||
Segment EBITDA1 / Margin
|
(220
|
)
|
(18.8
|
)
|
|
(12
|
)
|
(0.9
|
)
|
|
(208
|
)
|
|
|
|
|
|
|
|
|||||
Associates
|
7,616
|
|
|
|
6,804
|
|
|
|
812
|
|
|
|
|
|
|
|
|
Brake Systems Segment
|
Nine Months Ended September 30
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
Currency
|
|
Organic1
|
||||||||||||||||
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
$
|
%
|
|||||||||||||||
Net Sales
|
275
|
|
|
|
325
|
|
|
|
(50
|
)
|
(15
|
)
|
|
(5
|
)
|
(2
|
)
|
|
(45
|
)
|
(14
|
)
|
||
Operating Loss / Margin
|
(54
|
)
|
(19.6
|
)
|
|
(23
|
)
|
(7.0
|
)
|
|
(31
|
)
|
|
|
|
|
|
|
|
|||||
Segment EBITDA1 / Margin
|
(26
|
)
|
(9.3
|
)
|
|
6
|
|
1.8
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|||||
Associates
|
1,467
|
|
|
|
1,467
|
|
|
|
—
|
|
|
|
|
|
|
|
|
Corporate and Other
|
Nine Months Ended September 30
|
||||||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported Change
|
||||||
$
|
%
|
$
|
%
|
|
$
|
%
|
|||||
Net Sales
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operating Loss / Margin
|
(53
|
)
|
—
|
|
(34
|
)
|
—
|
|
(19
|
)
|
|
EBITDA1 / Margin
|
(52
|
)
|
—
|
|
(34
|
)
|
—
|
|
(18
|
)
|
|
Associates
|
45
|
|
|
|
39
|
|
|
|
6
|
|
|
Income Statement
|
Nine Months Ended September 30
|
||||||||||||||
(Dollars in millions, except per share data)
|
2019
|
|
2018
|
|
|
||||||||||
$
|
%
|
$
|
%
|
Change
|
|||||||||||
Net sales
|
$
|
1,446
|
|
|
|
$
|
1,692
|
|
|
|
$
|
(246
|
)
|
||
Cost of sales
|
(1,211
|
)
|
(83.7
|
)%
|
|
(1,371
|
)
|
(81.0
|
)%
|
|
160
|
|
|||
Gross profit
|
235
|
|
16.3
|
%
|
|
321
|
|
19.0
|
%
|
|
(86
|
)
|
|||
Selling, general & administrative expenses
|
(148
|
)
|
(10.2
|
)%
|
|
(112
|
)
|
(6.6
|
)%
|
|
(36
|
)
|
|||
Research, development & engineering expenses, net
|
(459
|
)
|
(31.8
|
)%
|
|
(334
|
)
|
(19.7
|
)%
|
|
(125
|
)
|
|||
Amortization of intangibles
|
(17
|
)
|
(1.2
|
)%
|
|
(16
|
)
|
(0.9
|
)%
|
|
(2
|
)
|
|||
Other income
|
1
|
|
0.1
|
%
|
|
18
|
|
1.1
|
%
|
|
(17
|
)
|
|||
Operating loss
|
(388
|
)
|
(26.8
|
)%
|
|
(122
|
)
|
(7.2
|
)%
|
|
(266
|
)
|
|||
Loss from equity method investments
|
(50
|
)
|
(3.5
|
)%
|
|
(45
|
)
|
(2.7
|
)%
|
|
(5
|
)
|
|||
Interest income
|
14
|
|
1.0
|
%
|
|
4
|
|
0.2
|
%
|
|
10
|
|
|||
Interest expense
|
(7
|
)
|
(0.5
|
)%
|
|
(1
|
)
|
(0.1
|
)%
|
|
(6
|
)
|
|||
Other non-operating items, net
|
1
|
|
0.1
|
%
|
|
1
|
|
0.1
|
%
|
|
—
|
|
|||
Loss before income taxes
|
(430
|
)
|
(29.7
|
)%
|
|
(163
|
)
|
(9.6
|
)%
|
|
(267
|
)
|
|||
Income tax benefit / (expense)
|
1
|
|
0.1
|
%
|
|
(12
|
)
|
(0.7
|
)%
|
|
13
|
|
|||
Net loss 1
|
(429
|
)
|
(29.7
|
)%
|
|
(175
|
)
|
(10.4
|
)%
|
|
(254
|
)
|
|||
Less: Net loss attributable to non-controlling interest
|
(26
|
)
|
1.8
|
%
|
|
(13
|
)
|
(0.8
|
)%
|
|
(13
|
)
|
|||
Net loss attributable to controlling interest
|
$
|
(403
|
)
|
(27.9
|
)%
|
|
$
|
(162
|
)
|
(9.6
|
)%
|
|
$
|
(241
|
)
|
Net loss per share – basic2
|
$
|
(4.10
|
)
|
|
|
$
|
(1.86
|
)
|
|
|
$
|
(2.24
|
)
|
||
Weighted average number of shares outstanding2
|
98.32
|
|
|
|
87.15
|
|
|
|
11.17
|
|
Reconciliations of U.S. GAAP to Non-U.S. GAAP Financial Measures
|
||||||||||||||||||||||||
Net Loss to EBITDA
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
|
Last 12
Months |
|
Full Year
2018 |
||||||||||||||||
Dollars in millions
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||||||||||
Net Loss
|
|
$
|
(139
|
)
|
|
$
|
(72
|
)
|
|
$
|
(429
|
)
|
|
$
|
(175
|
)
|
|
$
|
(548
|
)
|
|
$
|
(294
|
)
|
Depreciation and amortization
|
|
30
|
|
|
27
|
|
|
90
|
|
|
82
|
|
|
118
|
|
|
111
|
|
||||||
Loss from equity method investment
|
|
16
|
|
|
15
|
|
|
50
|
|
|
45
|
|
|
68
|
|
|
63
|
|
||||||
Interest and other non-operating items, net
|
|
(2
|
)
|
|
(4
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
(7
|
)
|
||||||
Income tax expense / (benefit)
|
|
3
|
|
|
3
|
|
|
(1
|
)
|
|
12
|
|
|
28
|
|
|
42
|
|
||||||
EBITDA
|
|
$
|
(92
|
)
|
|
$
|
(31
|
)
|
|
$
|
(298
|
)
|
|
$
|
(40
|
)
|
|
$
|
(344
|
)
|
|
$
|
(87
|
)
|
Segment EBITDA to EBITDA
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
|
Last 12
Months |
|
Full Year
2018 |
||||||||||||||||
Dollars in millions
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||||||||||
Electronics
|
|
(69
|
)
|
|
(18
|
)
|
|
(220
|
)
|
|
(12
|
)
|
|
(251
|
)
|
|
(43
|
)
|
||||||
Brake Systems
|
|
(8
|
)
|
|
—
|
|
|
(26
|
)
|
|
6
|
|
|
(24
|
)
|
|
7
|
|
||||||
Segment EBITDA
|
|
$
|
(77
|
)
|
|
$
|
(18
|
)
|
|
$
|
(246
|
)
|
|
$
|
(6
|
)
|
|
$
|
(275
|
)
|
|
$
|
(36
|
)
|
Corporate and other
|
|
(15
|
)
|
|
(13
|
)
|
|
(52
|
)
|
|
(34
|
)
|
|
(69
|
)
|
|
(51
|
)
|
||||||
EBITDA
|
|
$
|
(92
|
)
|
|
$
|
(31
|
)
|
|
$
|
(298
|
)
|
|
$
|
(40
|
)
|
|
$
|
(344
|
)
|
|
$
|
(87
|
)
|
Working Capital to Net Working Capital
|
|
September 30,
2019 |
|
September 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
|
December 31,
2018 |
|
December 31,
2017 |
||||||||||||
Dollars in millions
|
||||||||||||||||||||||||
Total current assets
|
|
$
|
1,602
|
|
|
$
|
1,648
|
|
|
$
|
1,758
|
|
|
$
|
1,699
|
|
|
$
|
1,543
|
|
|
$
|
648
|
|
less Total current liabilities
|
|
613
|
|
|
630
|
|
|
572
|
|
|
584
|
|
|
636
|
|
|
590
|
|
||||||
Working capital
|
|
989
|
|
|
1,018
|
|
|
1,185
|
|
|
1,115
|
|
|
907
|
|
|
58
|
|
||||||
less Cash and cash equivalents
|
|
(1,062
|
)
|
|
(919
|
)
|
|
(1,204
|
)
|
|
(980
|
)
|
|
(864
|
)
|
|
—
|
|
||||||
less Short-term debt
|
|
21
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net Working Capital
|
|
$
|
(52
|
)
|
|
$
|
99
|
|
|
$
|
2
|
|
|
$
|
135
|
|
|
$
|
42
|
|
|
$
|
58
|
|
Cash Flow before Financing Activities
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
|
Last 12
Months
|
|
Full Year
2018
|
||||||||||||||||
Dollars in millions
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||||||||||||
Net cash used in operating activities
|
|
$
|
(61
|
)
|
|
$
|
(17
|
)
|
|
$
|
(221
|
)
|
|
$
|
(181
|
)
|
|
$
|
(219
|
)
|
|
$
|
(179
|
)
|
plus Net cash used in investing activities
|
|
(79
|
)
|
|
(58
|
)
|
|
(198
|
)
|
|
(120
|
)
|
|
(263
|
)
|
|
(185
|
)
|
||||||
Cash Flow before Financing Activities
|
|
$
|
(140
|
)
|
|
$
|
(75
|
)
|
|
$
|
(419
|
)
|
|
$
|
(301
|
)
|
|
$
|
(482
|
)
|
|
$
|
(364
|
)
|
Selected Cash flow items
|
Nine Months Ended September 30
|
||||||
(Dollars in millions, except where specified)
|
2019
|
|
2018
|
||||
Net cash used in Operating Activities
|
$
|
(221
|
)
|
|
$
|
(181
|
)
|
Capital expenditures
|
$
|
(168
|
)
|
|
$
|
(123
|
)
|
Equity method investment
|
$
|
(32
|
)
|
|
$
|
(71
|
)
|
Net Cash Used in Investing Activities
|
$
|
(198
|
)
|
|
$
|
(120
|
)
|
Cash flow before Financing Activities1
|
$
|
(419
|
)
|
|
$
|
(301
|
)
|
Net Cash Provided by Financing Activities
|
$
|
634
|
|
|
$
|
1,206
|
|
|
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2018 |
|
December 31,
2018 |
|
September 30,
2018 |
|||||
TOTAL
|
|
9,127
|
|
|
9,235
|
|
|
9,191
|
|
|
8,600
|
|
|
8,310
|
|
Whereof:
|
Direct Manufacturing
|
2,116
|
|
|
2,153
|
|
|
2,110
|
|
|
2,083
|
|
|
2,186
|
|
|
RD&E
|
5,086
|
|
|
5,154
|
|
|
5,192
|
|
|
4,676
|
|
|
4,327
|
|
|
Temporary
|
1,630
|
|
|
1,659
|
|
|
1,563
|
|
|
1,329
|
|
|
1,254
|
|
Exhibit No.
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101*
|
|
The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2019, formatted Inline 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.
|
|
|
|
104*
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
*
|
Filed herewith.
|
+
|
Management contract or compensatory plan.
|
By:
|
/s/ Mats Backman
|
|
Mats Backman
|
|
Chief Financial Officer
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
(a)
|
Volvo Car Corporation, a Swedish limited liability company, reg. no. 556074-3089, having its registered office at Assar Gabrielssons Väg, 418 78, Gothenburg, Sweden ("Volvo Cars"); and
|
(b)
|
Veoneer Sweden AB, a Swedish limited liability company, reg. no. 559131-0841, having its registered office at Wallentinsvägen 22, 447 37 Vårgårda, Sweden ("Veoneer").
|
A.
|
Whereas, Volvo Cars and Autoliv Development AB ("Autoliv") entered into: (i) an Investment Agreement dated 20 December 2016 by and between Volvo Cars, Autoliv and Zenuity AB ("Zenuity") (the "IA"); and (ii) a Joint Venture Agreement dated 18 April 2017 by and between Volvo Cars and Autoliv regarding Zenuity (the "JVA");
|
B.
|
Whereas, Veoneer has acquired Autoliv's interests in Zenuity and replaced Autoliv in all aspects under the IA and the JVA and with respect to Zenuity and whereas, the Parties have discussed and agreed that Veoneer Inc. in all aspects under the JVA and with respect to Veoneer has replaced Autoliv Inc. as the ultimate parent, including but not limited to Clause 9.2.1 ; and
|
C.
|
Whereas, the Parties wish to amend the JVA.
|
1.
|
Definitions
|
2.
|
Effective Date
|
3.
|
The business of the JV Group
|
4.
|
Management of the JV Company
|
5.
|
Non-Competition
|
6.
|
The Parties’ co-operation
|
7.
|
Miscellaneous
|
VEONEER SWEDEN AB
|
|
VOLVO CAR CORPORATION
|
/s/ Mikko Taipale
NAME: Mikko Taipale
TITLE: Chairman
|
|
/s/ Maria Hemberg
NAME: Maria Hemberg
TITLE: SVP, General Counsel
|
/s/ Amelie Wendels
NAME: Amelie Wendels
TITLE: Director
|
|
/s/ Carla DeGeyseleer
NAME: Carla DeGeyseleer
TITLE: CFO
|
If to the Company:
|
Veoneer Inc.
|
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.
|
October 23, 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.
|
October 23, 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
|