10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2018

Commission File No.: 001-38471

Veoneer, Inc.

(Exact name of registrant as specified in its charter)

Delaware	82-3720890
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
Klarabergsviadukten 70, Section C6
Box 13089, SE-103 02
Stockholm, Sweden	N/A
(Address of principal executive offices)	(Zip Code)

+46 8 527 762 00

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes:  ☐    No: ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes:  ☒    No:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
(do not check if smaller reporting company)
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes:  ☐    No:  ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of July 20, 2018, there were 87,132,780 shares of common stock of Veoneer, Inc., par value $1.00 per share, outstanding.

Exhibit index located on page number 41

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including without limitation, statements regarding management’s examination of historical operating trends and data, estimates of future sales (including estimates related to order intake), operating margin, cash flow, taxes or other future operating performance or financial results, are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words. We have based these forward-looking statements on our current expectations and assumptions and/or data available from third parties about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs.

New risks and uncertainties arise from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Factors that could cause actual results to differ materially from these forward-looking statements include, without limitation, the following: cyclical nature of automotive sales and production; changes in general industry and market conditions or regional growth or decline; the ability of the Company to achieve the intended benefits from its separation from its former parent; our ability to be awarded new business or loss of business from increased competition; higher raw material, energy and commodity costs; component shortages; changes in customer and consumer preferences for end products; market acceptance of our new products; dependence on and relationships with customers and suppliers; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; costs or difficulties related to the integration of any new or acquired businesses and technologies; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of future litigation, regulatory actions or investigations or infringement claims; our ability to protect our intellectual property rights; tax assessments by governmental authorities and changes in our tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; and other risks and uncertainties contained in this Quarterly Report on Form 10-Q, as well as the disclosures made in the Company’s Information Statement included in the current report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 2, 2018.

For any forward-looking statements contained in this Quarterly Report on Form 10-Q or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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Veoneer, Inc.

Table of Contents

Part I – Financial Information	Page
Item 1 – Condensed Consolidated Financial Statement	4
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	39
Item 4 – Controls and Procedures	39
Part II – Other Information	40
Item 1 – Legal Proceedings	40
Item 1A – Risk Factors	40
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds Item 3 – Default Upon Senior Securities Item 4 – Mine Safety Disclosures Item 5 – Other Information	40
Item 6 – Exhibits	41
Exhibit Index	41
Signatures	43

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Part I – Financial Information

Item 1 – Condensed Consolidated Financial Statement

Veoneer, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(U.S. DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)

		Three Months Ended June 30						Six Months Ended June 30
		2018			2017			2018			2017
Net sales	Note 3	$	572		$	579		$	1,166		$	1,162
Cost of sales			(460	)		(459	)		(943	)		(929	)
Gross profit			112			120			223			233
Selling, general and administrative expenses			(37	)		(26	)		(68	)		(55	)
Research, development and engineering expenses, net			(119	)		(102	)		(225	)		(189	)
Amortization of intangibles			(6	)		(5	)		(11	)		(24	)
Other income (expense), net			2			1			17			13
Operating loss			(48	)		(12	)		(64	)		(22	)
Loss from equity method investment	Note 8		(16	)		(8	)		(30	)		(8	)
Interest income			1			-			1			-
Interest expense			(1	)		-			(1	)		-
Other non-operating items, net			1			1			1			-
Loss before income taxes	Note 14		(63	)		(19	)		(93	)		(30	)
Income tax expense	Note 6		(3	)		(11	)		(10	)		(22	)
Net loss		$	(66	)	$	(30	)	$	(103	)	$	(52	)
Less: Net loss attributable to non-controlling interest			(3	)		(2	)		(8	)		(4	)
Net loss attributable to controlling interest		$	(63	)	$	(28	)	$	(95	)	$	(48	)
Net loss per share - basic	Note 13	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)
Net loss per share - diluted		$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)
Weighted average number of shares outstanding,    (in millions)			87.13			87.13			87.13			87.13
Weighted average number of shares outstanding,    assuming dilution (in millions)			87.13			87.13			87.13			87.13

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Veoneer, Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Net loss	$	(66	)	$	(30	)	$	(103	)	$	(52	)
Other comprehensive income (loss), before tax:
Change in cumulative translation adjustment		(15	)		5			(4	)		15
Net change in cash flow hedges		1			(4	)		1			(6	)
Pension liability		(1	)		-			(1	)		-
Other comprehensive income (loss), before tax		(15	)		1			(4	)		9
Expense for taxes		-			-			-			-
Other comprehensive income (loss), net of tax		(15	)		1			(4	)		9
Comprehensive loss	$	(81	)	$	(29	)	$	(107	)	$	(43	)
Less: Comprehensive loss attributable to non-controlling    interest		(5	)		(1	)		(7	)		(2	)
Comprehensive loss attributable to controlling interest	$	(76	)	$	(28	)	$	(100	)	$	(41	)

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Veoneer, Inc.

Condensed Consolidated Balance Sheets

(U.S. DOLLARS IN MILLIONS)

		(unaudited)
		June 30, 2018			December 31, 2017
Assets
Cash and cash equivalents		$	980		$	-
Receivables, net			439			460
Inventories, net	Note 7		157			154
Related party receivables	Note 15		71			-
Prepaid expenses and contract assets			29			34
Other current assets			23			-
Total current assets			1,699			648
Property, plant and equipment, net			415			362
Equity method investment			134			98
Goodwill	Note 5		291			292
Intangible assets, net	Note 5		109			122
Deferred tax assets			30			30
Related party notes receivables	Note 15		-			76
Other non-current assets			71			34
Total assets		$	2,749		$	1,662
Liabilities and equity
Accounts payable		$	279		$	323
Related party payables	Note 15		47			5
Accrued expenses	Note 9		216			195
Income tax payable			12			41
Other current liabilities			30			26
Total current liabilities			584			590
Related party long-term debt	Note 15		13			62
Pension liability			19			14
Deferred tax liabilities			20			17
Other non-current liabilities			11			22
Total non-current liabilities			63			115
Commitments and contingencies	Note 12
Equity
Common stock			87			-
Additional paid-in capital			1,915			-
Net Former Parent investment			-			844
Accumulated other comprehensive income (loss)			(13	)		(8	)
Total equity			1,989			836
Non-controlling interest			113			121
Total equity and non-controlling interest			2,102			957
Total liabilities, equity and non-controlling interest		$	2,749		$	1,662

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Veoneer, Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Six Months ended
	June 30, 2018
	Equity attributable to
	Common Stock		Additional Paid In Capital		Net Former Parent Investment			Accumulated Other Comprehensive Income			Non-controlling Interest			Total
Balance at beginning of period	$	-	$	-	$	844		$	(8	)	$	121		$	957
Comprehensive Income (Loss):
Net loss		-		-		(95	)		-			(8	)		(103	)
Foreign currency translation		-		-		-			(5	)		1			(4	)
Net change in cash flow hedges		-		-		-			1			-			1
Pension liability		-		-		-			(1	)		-			(1	)
Reclassification of Former Parent's net investment and issuance of ordinary shares in connection with separation		87		1,915		(2,002	)								-
Total Comprehensive Income (Loss)		87		1,915		(2,097	)		(5	)		(7	)		(107	)
Net transfers from Former Parent		-		-		1,253			-			(1	)		1,252
Balance at end of period	$	87	$	1,915	$	-		$	(13	)	$	113		$	2,102

	Six Months ended
	June 30, 2017
	Equity attributable to
	Net Former Parent Investment			Accumulated Other Comprehensive Loss			Non-controlling Interest			Total
Balance at beginning of period	$	877		$	(29	)	$	242		$	1,090
Comprehensive Income (Loss):
Net loss		(48	)		-			(4	)		(52	)
Foreign currency translation		-			13			2			15
Net change in cash flow hedges		-			(6	)		-			(6	)
Total Comprehensive Income (Loss)		(48	)		7			(2	)		(43	)
Net transfers from Former Parent		179			-			-			179
Balance at end of period	$	1,008		$	(22	)	$	240		$	1,226

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Veoneer, Inc.

Condensed Consolidated Statements of Cash Flow (Unaudited)

(U.S. DOLLARS IN MILLIONS)

	Six Months Ended June 30
	2018			2017
Operating activities
Net loss	$	(103	)	$	(52	)
Depreciation and amortization		55			64
Contingent consideration write-down		(14	)		(13	)
Other, net		3			(20	)
Change in operating assets and liabilities:
Accounts payable		(62	)		(3	)
Related party receivables and payables, net		(31	)		3
Income taxes		(29	)		3
Accrued expenses		25			(11	)
Other current assets and liabilities, net		(20	)		6
Receivables, gross		14			(15	)
Inventories, gross		(6	)		7
Prepaid expenses and contract assets		4			(4	)
Net cash used in operating activities		(164	)		(35	)
Investing activities
Net decrease (increase) in related party notes receivable		76			(7	)
Capital expenditures		(71	)		(50	)
Equity method investment		(71	)		(112	)
Proceeds from sale of property, plant and equipment		4			5
Net cash used in investing activities		(62	)		(164	)
Financing activities
Cash provided at separation by Former Parent		980			-
Net transfers from Former Parent		275			179
(Decrease) / increase in related party long-term debt		(49	)		20
Net cash provided by financing activities		1,206			199
Effect of exchange rate changes on cash and cash equivalents		-			-
Increase in cash and cash equivalents		980			-
Cash and cash equivalents at beginning of year		-			-
Cash and cash equivalents at end of year	$	980		$	-

See Notes to Unaudited Condensed Consolidated Financial Statements.

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Veoneer, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(U.S. DOLLARS IN MILLIONS)

1. Basis of Presentation

OnJune29,2018(the “DistributionDate”),Veoneer,Inc.(“Veoneer”or“theCompany”)becameanindependent, publicly-tradedcompany 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)ofrecordasofcertainspecifieddatesreceivedoneshareofVeoneercommonstockoroneVeoneer SDR, respectively,foreveryoneshareofAutolivcommonstockorAutolivSDRheldasofacertaindate.TheSpin-Offwascompleted onJune29,2018inataxfreetransactionpursuanttoSection355oftheU.S.InternalRevenueCode.

OnJuly2,2018,VeoneercommonstockbeganregulartradingontheNewYorkStockExchange(“NYSE”)underthe ticker symbol “VNE” and Veoneer SDRs began trading on National Association of Securities Dealers (“NASDAQ”) Stockholmunderthesymbol“VNE-SDB”.AgreementsenteredintobetweenVeoneerandAutoliv in connection with the Spin-Offgoverntherelationship 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 theparties.

InadvanceoftheSpin-Off,Autolivcompletedaseriesofinternaltransactions,inwhichAutolivtransferreditsElectronics business to Veoneer. These transactions are referred to as the “internal reorganization”. The internal reorganization wascompletedonApril1,2018.

Veoneer has three product areas: Active Safety Products (that includes active safety sensors for advanced driver assistancesystems,highlyautomateddrivingsolutionsandautonomousdrivingsolutions),RestraintControlSystems, and BrakeSystems.

The accompanying Unaudited Condensed Consolidated Financial Statements for all periods presented have been preparedfromAutoliv’shistoricalaccountingrecordsandarepresentedonastand-alonebasisasiftheoperationshad beenconductedindependentlyfromAutoliv.Prior to the Spin-Off,Autoliv’snetinvestmentintheseoperations(Former Parentequity)is showninlieuofacontrollinginterest’sequityintheUnauditedCondensedConsolidatedFinancialStatements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) will be reflected in Retained earnings (Accumulated deficit). Accordingly, for periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Consolidated Financial Statements").

The Unaudited Condensed Consolidated Financial Statements include the historical operations, assets, and liabilities thatareconsideredtocomprisetheVeoneerbusiness.AlloftheallocationsandestimatesintheUnauditedCondensed Consolidated Financial Statements are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of VeoneerincludedhereinmaynotbeindicativeofwhattheywouldhavebeenhadVeoneeractuallybeenastand-alone entityduringsuchperiods,noraretheynecessarilyindicativeofVeoneerfutureresults.

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 disclosuresconsiderednecessaryforafairpresentationhavebeenincluded.Forfurtherinformation,refertoVeoneer’s AuditedCombinedFinancialStatementsfortheyearendedDecember31,2017andcorrespondingnotes in the Company’s Information Statemnt included in the current report on Form 8-K filed with the SEC on July 2, 2018. Certain amounts in the prior year’s Condensed Combined Financial Statements and related footnotes thereto have been reclassified to conform to the current year presentation.

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2. Summary of Significant Accounting Policies

A summary of significant policies is included in the current report on Form 8-K filed with the SEC on July 2, 2018. Discussion on cash and cash equivalents is included here as an additional significant policy which has become relevant beginning quarter ended June 30, 2018.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents.

New Accounting Standards

Adoption of New Accounting Standards

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company early adopted ASU 2018-02 as of January 1, 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Cuts and Jobs Act (the “Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost.

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the Unaudited Condensed Consolidated Statements of Operations separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Unaudited Condensed Consolidated Statements of Operations. The Company adopted ASU 2017-07 in the first quarter of 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented (see Note 10 Retirement Plans).

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Historical GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to equity as of the beginning of the period of adoption. The adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements.

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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 net sales, net income, or balance sheet. The table below shows the adjustments made due to ASU 2014-09.

Balance Sheet (Dollars in millions)	Balance at December 31, 2017		Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Inventories, net	$	154	$	(5	)	$	149
Prepaid expenses and contract assets		34		7			41
Equity
Net Former Parent investment		844		1			845

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
Income Statement (Dollars in millions)	As Reported			Balances without adoption of ASC 606			Effect of Changes			As Reported			Balances without adoption of ASC 606			Effect of Changes
Net sales	$	572		$	573		$	(1	)	$	1,166		$	1,166		$	-
Cost of sales		(460	)		(461	)		1			(943	)		(943	)		-
Operating loss		(48	)		(48	)		-			(64	)		(64	)		-

	As of June 30, 2018
Balance Sheet (Dollars in millions)	As Reported		Balances without adoption of ASC 606		Effect of Changes
Assets
Inventories, net	$	157	$	162	$	(5	)
Prepaid expenses and other current assets		29		22		7
Equity
Additional paid-in capital		1,915		1,914		1

Accounting Standards Issued But Not Yet Adopted

In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted improvements to accounting for hedging activities. The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual period beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of

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ASU 2017-12 will not have a material impact on the Unaudited Condensed Consolidated Financial Statements since the Company closed its cash flow hedges in the first quarter of 2018.

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 its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016- 02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period Financial Statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. The Company’s implementation of this standard includes use of a project management framework that includes a dedicated lead project manager and a cross-functional project steering committee responsible for assessing the impact that the new standard will have on the Company’s accounting, financial statement presentation and disclosure. This team has begun its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. In addition, the Company has selected a new system to assist with lease accounting and has started the implementation. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard. The Company is continuing to consider control and process changes to capture lease data necessary to apply ASU 2016-02.

3. Revenue

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is measured based on consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price concessions or annual price adjustments) and estimated at contract inception. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer.

In addition, from time to time, Veoneer may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless certain criteria are met warranting capitalization. If the payments are capitalized, the amounts are amortized as the related goods are transferred. As of June 30, 2018, and December 31, 2017, the Company capitalized $43 million and $23 million, respectively, in Other non-current assets related to capitalized payments. The Company assesses these amounts for impairment. There was no impairment.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales.

Nature of goods and services

The following is a description of principal activities from which the Company generates its revenue. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The principal activities are essentially the same for each of the segments. Both of the segments generate revenue from the sale of production parts to original equipment manufacturers (“OEMs”). 

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The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any price concession or annual price adjustments, is based on their stand-alone selling prices for each of the products. The stand-alone selling prices are determined based on the cost-plus margin approach.

The Company recognizes revenue for production parts primarily at a point in time.

For production parts with revenue recognized at a point in time, the Company recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically F.O.B. shipping point). There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and a related asset and associated cost of goods sold and inventory. However, the financial impact of these contracts is immaterial considering the very short production cycles and limited inventory days on hand, which is typical for the automotive industry.

The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e. price concessions or annual price adjustments). Customers typically pay for the production parts based on customary business practices with payment terms averaging 30 days.

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary region and products of revenue recognition.

Net Sales by Region

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	104	$	96	$	200	$	117	$	89		$	206
Americas		173		15		188		180		34			214
Europe		184		-		184		160		-			160
Total region sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Region

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	216	$	195	$	411	$	240	$	175		$	415
Americas		351		30		381		359		70			429
Europe		374		-		374		321		-			321
Total region sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total	$	941	$	225	$	1,166	$	920	$	242		$	1,162

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Net Sales by Products

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	246	$	-	$	246	$	266	$	-		$	266
Active Safety products		215		-		215		191		-			191
Brake Systems		-		111		111		-		123			123
Total product sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total net sales	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Products

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	514	$	-	$	514	$	537	$	-		$	537
Active Safety products		427		-		427		383		-			383
Brake Systems		-		225		225		-		245			245
Total product sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total net sales	$	941	$	225	$	1,166	$	920	$	242		$	1,162

Contract balances

The following tables provide information about receivables and contract assets from contracts with customers.

The contract assets related to the Company’s rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. There have been no impairment losses recognized related to contract assets arising from the Company’s contracts with customers.

Contract Balances with Customers

(Dollars in millions)	As of
	June 30, 2018		December 31, 2017
Receivables, net	$	439	$	460
Contract assets1		7		-

¹ Included in prepaid expenses and contract assets

Receivables, net of allowance

(Dollars in millions)	As of
	June 30, 2018			December 31, 2017
Receivables	$	441		$	462
Allowance at beginning of period		(2	)		(4	)
Net decrease/(increase) of allowance		-			2
Allowance at end of period		(2	)		(2	)
Receivables, net of allowance	$	439		$	460

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Changes in the contract asset balances during the period are as follows:

Change in Contract Balances with Customers1
(Dollars in millions)	Three months ended			Six months ended
	June 30, 2018			June 30, 2018
	Contract assets			Contract assets
Beginning balance	$	8		$	-
Increases due to cumulative catch up adjustment		-			7
Increases due to revenue recognized		7			15
Decreases due to transfer to receivables		(8	)		(15	)
Ending balance	$	7		$	7
1The contract asset is determined at each period end, this table reflects the rollforward of the period end balance.

Contract costs

As of June 30, 2018, the Company has capitalized $12 million of direct and incremental contract costs incurred in connection with obtaining a contract with a customer. These costs will be amortized as the related goods are transferred.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The amount of fulfillment costs was not material for any period presented.

4. Business Combinations

Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s Unaudited Condensed Consolidated Financial Statements prospectively from their date of acquisition.

Fotonic i Norden dp AB

On November 1, 2017, Autoliv completed the acquisition of all the shares in Fotonic i Norden dp AB (Fotonic), headquartered in Stockholm and Skellefteå in Sweden which were transferred to Veoneer in connection with the Spin-Off. The final acquisition date fair value of the total consideration transferred was $17 million, consisting of a $15 million cash payment and $2 million of deferred purchase consideration, payable at the 18 month anniversary of the closing date. The deferred purchase consideration reflects the holdback amount as stipulated in the share purchase agreement. The transaction has been accounted for as a business combination. The balance of the deferred purchase consideration remains unchanged at $2 million as of June 30, 2018.

Fotonic provides Lidar and Time of Flight camera expertise and the acquisition included 35 Lidar and Time of Flight engineering experts, in addition to defined tangible and intangible assets. The strength of the acquired competence is on the Lidar and Time of Flight camera hardware side which form a complement to Veoneer’s skillset in the Lidar software and algorithms area. Lidar technology is an enabling technology for Highly Automated Driving and considered the primary sensor by all system developers. Fotonic is being reported in the Electronics segment.

The net assets acquired as of the acquisition date amounted to $17 million. The final fair values of identifiable assets acquired consisted of intangible assets of $4 million and goodwill of $13 million. Acquired intangibles consisted of the fair value of background IP (patent & technical know-how). The useful life of the IP is five years and will be amortized on a straight-line basis. The recognized goodwill primary reflects the valuation of the acquired workforce of specialist engineers.

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5. 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.

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, 2018 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 as of June 30, 2018 and December 31, 2017, as follows:

	June 30, 2018
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	105	$	-	$	-
Total derivatives not designated as hedging instruments	$	105	$	-	$	-

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	December 31, 2017
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives designated as hedging instruments
Foreign exchange forward contracts, less than    1 year (cash flow hedge)	$	67	$	-	$	1
Total derivatives designated as hedging instruments	$	67	$	-	$	1

Gains and losses on derivative financial instruments for the three and six months ended June 30, 2018 and 2017 are as follows:

	Three months ended
	June 30, 2018						June 30, 2017
	Foreignexchange forward contracts			Foreign exchange swaps			Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded into gain (loss)	$	-		$	(2	)	$	-		$	2
Recorded gains (loss) into    AOCI net of tax		-			-			(2	)		-
Less: reclassified from    AOCI into gain (loss)		(1	)		-			2			-
	$	1		$	(2	)	$	(4	)	$	2

	Six months ended
	June 30, 2018					June 30, 2017
	Foreign exchange forward contracts			Foreign exchange swaps		Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded gains (loss) into    AOCI net of tax	$	-		$	-	$	(3	)	$	-
Less: Reclassified from    AOCI gain (loss)		(1	)		-		3			-
	$	1		$	-	$	(6	)	$	-

Contingent consideration-The fair value of the contingent consideration relating 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 to 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, 2018 and continues to believe that the fair value of the contingent consideration is $0 million.

Items Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment.The Company has determined that the fair value measurements included in each of these assets and liabilities rely

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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 tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017.

	June 30, 2018				December 31, 2017
	Fair value measurements		Impairment		Fair value measurements		Impairment
(Dollars in millions)	Level 3		Losses		Level 3		Losses
Goodwill 1)	$	291	$	-	$	292	$	(234	)
Intangible assets, net 2)		109		-		122		(12	)

1) In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

2) In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

6. Income Taxes

The income tax provision for the three month and six month periods ended June 30, 2018 was $3 million and $10 million,respectively. The income tax provisionforthethreemonthandsixmonthperiodsendedJune30,2017was$11 millionand$22million,respectively.Theincometaxprovisionin2018 was primarily impacted by a reduction in the pre tax earnings of the Company’s profitable subsidiaries.

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 on the Company’s deferred tax balances as of the enactment date. PursuanttotheTaxMattersAgreemententered intowithAutolivinconnection with the Spin-Off, Autoliv is the primarily obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the CompanyisnotliableforanytransitiontaxesundertheAct.

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 US, Swedish, and Japanese operations and the Company’s joint venture in Japan.

TheCompanyhasreservesforincometaxesthatrepresenttheCompany’sbestestimateofthepotentialliabilityfortax 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 is part of the Autoliv group and were relieved through the Former Parent company investment. There were no material changes to the Company’s uncertain tax positions as of June 30, 2018. The Company files income tax returns in the United States federal jurisdiction, and variousstatesandnon-U.S.jurisdictions.Underlocaltaxlaw,aVeoneerentitymayhavebeenrequiredtofileitsincome taxreturnscombinedwithanAutoliventityuptoandincludingthedateoftheSpin-Offtransaction.Subsequenttothe Spin-Offtransaction,Veoneerwillfileitsincometaxreturnsonastand-alonebasis

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense.

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7. Inventories

Inventories are stated at the lower of cost (principally FIFO) and net realizable value. The components of inventories were as follows:

	As of
	June 30,  2018			December 31, 2017
Raw materials	$	112		$	90
Work in progress		16			21
Finished products		52			70
Inventories	$	180		$	181
Inventory valuation reserve		(23	)		(27	)
Total inventories, net of reserve	$	157		$	154

8. Equity Method Investment

As of June 30, 2018, the Company has one equity method investment.

On April 18, 2017, Autoliv and Volvo Cars completed the formation of their joint venture, Zenuity AB.Autoliv’s interest in Zenuity was transferred to Veoneer in connection with the Spin-Off. Autoliv made an initial cash contribution of SEK 1 billion (approximately $111 million as of April 18, 2017) and also contributed intellectual property, lab equipment and an assembled workforce. Veoneer and Volvo Cars each have a 50% ownership of Zenuity and neither entity has the ability to exert control over the joint venture, in form or in substance. Veoneer accounts for its investment in Zenuity under the equity method and the investment is shown in the line item Equity method investment in the Condensed Consolidated Balance Sheets. The contributed intellectual property, lab equipment, and an assembled workforce have been assessed to constitute a business as defined by ASU 2017-01, Business Combinations (Topic 805) – Clarifying the Definition of a Business. FASB ASC Topic 810, Consolidation states that when a group of assets that constitute a business is derecognized, the carrying amounts of the assets and liabilities are removed from the Condensed Consolidated Balance Sheets. The investor would recognize a gain or loss based on the difference between the sum of the fair value of any consideration received less the carrying amount of the group of assets and liabilities contributed at the date of the transaction. The equity value of Zenuity on the date of the closing of the transaction of approximately $250 million has been calculated using the discounted cash flow method of the income approach. Veoneer’s 50% share of the equity value, approximately $125 million, represents its investment in Zenuity, including its cash contribution at inception.

At the end of the first quarter of 2018, Veoneer contributed SEK 600 million (approximately $71 million) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs.

The profit and loss attributed to the investment is shown in the line item Loss from equity method investment in the Unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2018 was $16 million and $30 million, respectively. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2017 was $8 million for both periods. As of June 30, 2018, the Company’s equity investment in Zenuity amounted to $134 million after consideration of foreign exchange movements.

Certain Unaudited Summarized Income Statement information of Zenuity, for the three and six months ended June 30, 2018 and 2017, is shown below:

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Net sales	$	2		$	1		$	3		$	1
Gross profit		-			-			-			-
Operating loss		(32	)		(16	)		(60	)		(16	)
Loss before income taxes		(32	)		(16	)		(60	)		(16	)
Net loss	$	(32	)	$	(16	)	$	(60	)	$	(16	)

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9. Accrued Expenses

	As of
	June 30, 2018		December 31, 2017
Operating related accruals	$	53	$	55
Employee related accruals		63		57
Customer pricing accruals		56		36
Product related liabilities1		23		22
Other accruals		21		25
Total Accrued Expenses	$	216	$	195

¹ At June 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

10. Retirement Plans

Defined Benefit Pension Plans

The defined benefit pension plans impacting the Veoneer financial results include the following:

Existing Veoneer Plans which are comprised of plans in Japan, Canada, and France, Transferred Veoneer Plans whicharecomprisedofplansinGermany,India,Japan,andSouthKorea,andAutolivSponsoredPlanswhichare comprisedofplansinSwedenandtheU.S.

The combination of the Existing Veoneer Plans, Transferred Veoneer Plans, and Autoliv Sponsored Plans has resultedinatotalpensionexpenseof$2millionand$3millionforthethreeandsixmonthsendedJune30,2018, respectively.For thethreeandsixmonthsendedJune30,2017totalpensionexpensewas$2millionand$3million,respectively.

Existing Veoneer Plans

ThedefinedbenefitpensionplansforeligibleparticipantsinJapan,Canada,andFrancepriortotheSpin-Offcontinue toprovidepensionretirementbenefitstotheCompany’semployeessubsequenttotheSpin-Offtransaction.

TheCompany’snetperiodicbenefitcostsfortheExistingVeoneerPlansforthethreeandsixmonthsendedJune30, 2017and2018wereasfollows:

	Three Months Ended June 30					Six Months Ended June 30
	2018		2017			2018			2017
Service cost	$	1	$	1		$	2		$	2
Interest cost		1		1			1			1
Expected return on plan assets		-		(1	)		(1	)		(1	)
Net periodic benefit cost	$	2	$	1		$	2		$	2

The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as Other non-operating items, net in the Unaudited Condensed Consolidated Statements of Operations.

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Transferred Veoneer Plans

Prior to the plan transferstoVeoneerlegalentitiesonApril1,2018,eligibleVeoneeremployeesparticipatedinthe followingAutoliv-sponsoredplans:

Country	Name of Defined Benefit Pans
Germany	Direct Pension Promises Plan
India	Gratuity Plan
Japan	Retirement Allowances Plan
	Defined Benefit Corporate Plan
South Korea	Severance Pay Plan (statutory plan)

OnApril1,2018,theassets,liabilities,andassociatedaccumulatedothercomprehensiveincome(loss)ofthepension 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 relatedtotheseplansinconnectionwiththeApril1,2018transfer.Planassetsinthetransferredplansareimmaterial. TheamountsrecordedforthetransferoftheVeoneerplanswerebasedontheassumptionsincorporatedintotheplan measurements as of December 31, 2017; however, management determined that there were no material changes in assumptions from December 31, 2017 to April 1, 2018. The plans will be re-measured in connection with the December 31, 2018 actuarialvaluation.

Changes in Benefit Obligations and Plans Assets

	As of
	June 30, 2018
Benefit obligation as of April 1, 2018	$	-
Service cost		-
Interest cost		-
Benefits paid		-
Obligation transferred in		6
Benefit obligation at end of the period	$	6
Fair value of plan assets as of April 1, 2018
Company contributions		-
Benefits paid		-
Plan assets transferred in		-
Fair value of plan assets at end of the period	$	-
Funded status recognized in the balance sheet	$	(6	)

Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan

TheallocatednetperiodicbenefitcostsrelatedtotransferredplansfromAutolivtoVeoneerwerelessthan$1million for the three months ended March 31, 2018. 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, 2017. Subsequent to the plan transfer on April 1, 2018, the components of net periodic benefit cost are less than $1 million for the three months ended June 30,2018.

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Components of Accumulated other Comprehensive Income Before Tax

	As of
	June 30, 2018
Net actuarial loss (gain)	$	(1	)
Prior service cost (credit)		-
Total accumulated other comprehensive income    recognized in the balance sheet	$	(1	)

The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as other non-operating items, net in the Unaudited CondensedConsolidatedStatementsofOperations.

Autoliv Sponsored Plans

Priortocertainlegaldecisionsorplanamendments,VeoneeremployeesinSwedenandintheU.S.participatedina multiemployerplanwithAutoliv.Thelegalnameoftheplansareasfollow:

Country	Name of Defined Benefit Pans
Sweden	ITP plan
U.S.	Autoliv ASP, Inc. Pension Plan
	Autoliv ASP, Inc. Excess Pension Plan
	Autoliv ASP, Inc. Supplemental Pension Plan

On April 1, 2018, it was determined that the assets, liabilities, and associated accumulated other comprehensive income(loss)oftheSwedenplanforallVeoneeremployeesincludedintheSwedenplanwillremainwithAutolivand benefits will be paid out of that plan in the future upon retirement. The allocation to capture the Company’s specific definedbenefitplansexpenseandcontributionspriortotheplansamendmentforthethreemonthsendedMarch31, 2018werelessthan$1millionandwerelessthan$1millionforthethreeandsixmonthsendedJune30,2017.

On June 29, 2018, it was also determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the U.S. plan for all Veoneer employees included in the U.S. plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The Veoneer employees were considered to be participating in the Autoliv sponsored plan through June 29, 2018 at which date the plan was amended to freeze the accrual of benefits for any Veoneer employees. The U.S. plan resulted in less than $1 million ofdefinedbenefitplanexpenseandcontributionsmadeallocatedtoVeoneerforthethreeandsixmonthsendedJune 30,2018andlessthan$1millionofdefinedbenefitplanexpenseandcontributionsmadeallocatedtoVeoneerforthe threeandsixmonthsendedJune30,2017.

PriortotherespectivedatesabovefortheSwedenandtheU.S.plans,theVeoneeremployeeswereconsideredtobe participatingintheAutolivsponsoredplans.EffectiveApril1,2018fortheSwedenplanandJune29,2018forthe U.S.plantherespectivepartiesdeterminedthatVeoneerwouldnothaveadditionalexpenseorliabilityrelatedtoeach of the existingplans.

Postretirement Benefits other than Pension

InadditiontotheexistingbenefitobligationfromtheCanadianmedicalplan as disclosed in the Audited Combined Financial Statements for the year ended December 31, 2017,theCompanyalsoassumedlessthan$1 million in benefit obligations transferred from Autoliv’s U.S. medical plan as of June 29, 2018 in connection with the Spin-Off.Thenetperiodicbenefitcostandimpactonaccumulatedothercomprehensiveincomerelatedto the plans wereimmaterial.

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11. Stock Incentive Plan

PriortotheSpin-Off,certaineligibleemployeesofVeoneerparticipatedinAutoliv,Inc.1997StockIncentivePlan(the Plan) and received Autoliv stock-based awards which include stock options, restricted stock units and performance shares. In connection with the Veoneer Spin-Off, each outstanding Autoliv stock-based award as of June 29, 2018 wasconvertedtostockawardshaving underlying shares ofbothAutolivandVeoneercommonstock.

The conversion that occurred on the Distribution Date of Veoneer was based on the following:

• Stock Option (SOs) - A number of SOs comprising 50% of the value of the outstanding SOs calculated immediatelypriortotheSpin-OfftransactioncontinuedtobeapplicabletoAutolivcommonstock.Anumberof SOscomprisingtheremaining50%percentofthepre-spinvaluewerereplacedwithoptionstoacquireshares of Veoneer commonstock.

• Restricted Stock Units (RSUs) - A number of RSUs comprising 50% of the value of the outstanding RSU calculatedimmediatelypriortotheSpin-OfftransactioncontinuedtobeapplicabletoAutolivcommonstock.A numberofRSUscomprisingtheremaining50%ofthepre-spinvaluewerereplacedwithRSUswithunderlying Veoneer commonstock.

• Performance Shares (PSs) - Outstanding PSs pre Spin-Off were converted to time-based RSUs and were treatedinthesamemannerasotheroutstandingRSUs(asdescribedabove)ontheDistributionDate. ThenumberofoutstandingPSspre Spin-Offwereconvertedbasedon:

1) The level of actual achievement of performance goals for each outstanding PSs for the period between the firstdayoftheperformanceperiodandDecember31,2017(the“PerformanceMeasurementDate”),referred toas“LevelofPerformance-to-Date”,and;

2) ThegreateroftheLevelofPerformance-to-Dateandestimatedtargetperformancelevel(i.e.,100%)forthe periodbetweenthePerformanceMeasurementDateandthelastdayoftheperformanceperiod.

In each case above, the conversion was intended to generally preserve the intrinsic value of the original award determinedasoftheDistributionDate.ThenumberofconvertedRSUsandSOsforAutolivandVeoneer wasbasedontheaverageofAutolivclosingstockpricesforthelast5dayspriortotheSpin-Offandtheaverageof closingstockpricesofAutolivandVeoneer,respectively,forthefirst5daysaftertheSpin-Off.

AsaresultoftheSpin-Offandtherelatedconversion,itwasdeterminedthatthestockbasedawardsweremodifiedin accordance with ASC 718, Compensation – Stock Compensation. As a result, the fair value of the RSUs and SOs immediately before and after the modification was assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards, including consideration of the impact of conversion using the 5 day average. Based on the valuation performed, it was determined that the conversion did not result in any incrementalcompensationcostforanyoftheoutstandingawards.

With certain limitedexceptions, includingthefreezingofthePerformanceMeasurementDatetoDecember31,2017asnotedabove,the SOs and RSUs post Spin-Off are subject to the same terms and conditions (including with respect to vesting and expiration) that were applicable to such Autoliv stock-based awards immediately prior to the conversion and as describedintheAuditedCombinedFinancialStatementsfortheyearendedDecember31,2017andcorresponding notes included in the current report on Form 8-K filed with the SEC on July 2, 2018. There were no stock-based compensation expense related to SOs for these periods.

The Company recorded approximately $1 million and $2 million stock-based compensation expense related to RSUs and PSs for the three and six months ended June 30, 2018, respectively. During the three and six months ended June 30, 2017, the Company recorded $1 million and $2 million, respectively, of stock-based compensation expense related to RSUs and PSs.

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. 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 as well as 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.

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12. 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 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. The table in Note 9 – Accrued Expenses summarizes the change in the balance sheet position of the product related liabilities.

Product Related Liabilities

TheCompanyrecordsliabilitiesforproductrelatedriskswhenprobableclaimsareidentifiedandwhenitispossibleto reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performanceofnewerproducts,andvolumeoftheproductssold.Theprovisionsarerecordedonanaccrual basis.

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Thetablebelowsummarizesthechangeinthebalancesheetpositionoftheproductrelatedliabilities.

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Reserve at beginning of the period	$	23		$	22		$	22		$	30
Change in reserve		1			1			8			-
Cash payments		(1	)		(3	)		(7	)		(10	)
Translation difference		-			-			-			-
Reserve at end of the year	$	23		$	20		$	23		$	20

ForthethreeandsixmonthsendedJune30,2018andJune30,2017,provisionsandcashpaidprimarilyrelatetorecall and warranty related issues. The increase in the reserve balance as of June 30, 2018 compared to the prior year was mainlydue torecallrelatedissuesoffsetbythecashpaymentsforwarrantiesandproductliabilities.

AgreementsenteredintobetweenAutolivandVeoneerinconnectionwiththeSpin-OffprovideforAutolivtoindemnify VeoneerforcertainliabilitiesrelatedtoelectronicsproductsmanufacturedbeforeApril1,2018.AsofJune30,2018the indemnification asset amounting to $23 million representing substantially all the product related liabilities which is includedintheOthercurrentassetsinthe CondensedConsolidatedBalanceSheets. On May 18, 2018, the Company was informed by one of its customers that it would undertake a recall to proactively address a higher than usual warranty return ratio on one of the Company’s products. The estimated costs associated with this recall are approximately $6 million and were accrued as of June 30, 2018. A substantial portion of these costs are subject to indemnification by Autoliv.

Guarantees

Veoneer has certain guarantees in place and as of June 30, 2018 and December 31, 2017, directly guaranteeing $13 million of such obligations. 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.

13. Loss pershare

Basicloss pershareiscomputedbydividingnetlossfortheperiodbytheweightedaveragenumberofcommon stockoutstandingduringtheperiod.Dilutedloss pershareiscomputedbydividingnetlossfortheperiodbythe weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period.Thedilutiveeffectofoutstandingoptionsandequityincentiveawardsisreflectedindilutedloss pershare by application of the treasury stock method. The calculation of diluted loss per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted loss per share for the three andsixmonthsendedJune30,2018and2017.

(U.S. dollars in millions, except per share amounts)	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Numerator:
Basic and diluted:
Net loss attributable to common shareholders	$	(63	)	$	(28	)	$	(95	)	$	(48	)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)		87.13			87.13			87.13			87.13
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	87.13			87.13			87.13			87.13
Basic loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)
Diluted loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)

¹ Shares in the diluted EPS calculation represent basic shares due to the net loss. The shares excluded from the calculation were 598,568 for the three and six months ended June 30, 2018 and 2017 because they are anti-dilutive.

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14. Segment Information

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 chief operating decision maker to assess the performance of the individual operating segments and make decisions about resources to be allocated to the operating segments.

	Three Months Ended June 30						Six Months Ended June 30
(LOSS)/INCOME BEFORE INCOME TAXES	2018			2017			2018			2017
Electronics	$	(31	)	$	(7	)	$	(32	)	$	(9	)
Brake Systems		(4	)		(1	)		(12	)		(3	)
Segment operating (loss)/income		(35	)		(8	)		(44	)		(12	)
Corporate and other		(13	)		(4	)		(20	)		(10	)
Interest and other non-operating items, net		1			1			1			-
Loss from equity method investment		(16	)		(8	)		(30	)		(8	)
Loss before income taxes	$	(63	)	$	(19	)	$	(93	)	$	(30	)

15. Relationship with Former Parent and Related Entities

Historically, Veoneer has been managed and operated in the normal course of business with other affiliates of Autoliv. Accordingly, certain shared costs have been allocated to Veoneer and reflected as expenses in the stand-alone Unaudited Condensed Consolidated Financial Statements. Management of Autoliv and Veoneer consider the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Autoliv attributable to Veoneer for purposes of the stand-alone Financial Statements; however, the expenses reflected in the 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 equity in the Condensed Consolidated Balance Sheets as Net Former Parent investment and in the Unaudited Condensed Consolidated Statements of Cash Flows as a financing activity in Net transfers from Former Parent.

Transaction with other Autoliv Businesses

Throughout the periods covered by the Unaudited Condensed Consolidated Financial Statements, Veoneer sold finished goods to Autoliv. Related party sales to other Autoliv businesses amount to $21 million and $43 million for the three and six months ended June 30, 2018, respectively, and $18 million and $35 million for the three and six months ended June 30, 2017, respectively.

Related Party Balances

Amounts due to and due from related parties are summarized in the below table:

	As of
RELATED PARTY	June 30, 2018		December 31, 2017
Related party receivable	$	71	$	-
Related party notes receivable		-		76
Related party payables		47		5
Related party long-term debt		13		62

Related party receivables are mainly driven by Reseller Agreements put in place in connection with the Spin-Off. The Reseller Agreements are between Autoliv and Veoneer to facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period post Spin-Off. Autoliv will collect the customer payments and will remit the payments to Veoneer.

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As of December 31, 2017, related party notes receivables relate to a long term loan between Veoneer and Autoliv entities, which was subsequently settled prior to the Spin-Off.

As of June 30, 2018, the related party payables mainly relate to an agreement between Veoneer-Nissin Brake Systems and various Autoliv companies.

A portion of the related party long-term debt is subject to a long term loan agreement that was settled on June 29, 2018. As of June 30, 2018, all related party debt agreements were settled or terminated, with the exception of a capital lease arrangement at Veoneer Nissin Brake Systems (a 51% owned subsidiary) of $13 million and $11 million as of June 30, 2018 and December 31, 2017, respectively. The capital lease is with Nissin Kogyo, the 49% owner of Veoneer Nissin Brake Systems.

Corporate Costs/Allocations

For the periods prior to April 1, 2018, the Unaudited Condensed Combined 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 services continued to be provided by Autoliv and directly charged to Veoneer. In addition, Veoneer personnel perform certain services for Autoliv, which is 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, which are operated by Autoliv. Cash receipts are 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 Spin-Off, Veoneer created its own corporate treasury operations.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition and cash flows of Veoneer, Inc. (“Veoneer” or the “Company”). This MD&A should be read in conjunction with the financial statements and accompanying notes to the financial statements included elsewhere herein, as well as the risk factors and other disclosures made in the Company’s Information Statement included in the current report on Form 8-K filed with the SEC on July 2, 2018.

The historical financial statements included in this Quarterly Report on Form 10-Q may not reflect what our business, financial position or results of operations would have been had we been a publicly traded company during the periods presented or what our results of operations, financial position and cash flow will be in the future now that we are a stand-alone publicly listed company.

Introduction

The following MD&A is intended to help you understand the business operations and financial condition of Veoneer, Inc. (“we”, “our”, or “the Company”). This MD&A is presented in the following sections:

• Executive Overview

• Trends, Uncertainties and Opportunities

• Market Overview

• Non-U.S. GAAP Financial Measures  

• Results of Operations

• Liquidity and Capital Resources

• Off-Balance Sheet Arrangements and Other Matters

• Contractual Obligation and Commitments

• Significant Accounting Policies and Critical Accounting Estimates

Veoneer is a Delaware corporation with its principal executive offices in Stockholm, Sweden. The Company functions as a holding corporation and owns two principal operating subsidiaries, Veoneer AB and Veoneer US, Inc. On June 29, 2018 the spin-off of Veoneer from Autoliv, Inc was completed through the distribution by Autoliv of all the outstanding shares of common stock of Veoneer to Autoliv’s stockholders as of the close of business on June 12, 2018, the common stock record date for the distribution, in a tax-free, pro rata distribution. On July 2, 2018, the shares of Veoneer common stock commenced trading on the New York Stock Exchange under the symbol “VNE” and the Veoneer Swedish Depository Receipts representing shares of Veoneer common stock commenced trading on Nasdaq Stockholm under the symbol “VNE SDB.”

Veoneer is a global leader in the design, development, sale and manufacture of automotive safety electronics with a focus on innovation, quality and manufacturing excellence. Prior to the spin-off, Veoneer operated for almost four years as a segment within Autoliv.  Veoneer Safety Systems are designed to make driving safer and easier, more comfortable and convenient for the end consumer and to intervene before a collision. Veoneer endeavors to prevent vehicle accidents or reduce the severity of impact in the event a crash is unavoidable. Through our customer focus, being an expert partner with our customers, we intend to develop human centric systems that benefit vehicle occupants.

Veoneer’s current product offering includes automotive radars, mono and stereo vision cameras, night vision systems, positioning systems, ADAS (advanced driver assist systems) electronic control units, passive safety electronics (airbag control units and crash sensors), brake control systems and a complete ADAS software offering towards highly automated driving (HAD) and eventually autonomous driving (AD). In addition, we offer driver monitoring systems, LiDAR sensors, RoadScape positioning and other technologies critical for HAD and AD solutions by leveraging our partnership network and internally developed intellectual property.

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Executive Overview

The spin-off of Veoneer from Autoliv, Inc. was successfully completed according to schedule. Veoneer is now the world’s largest pure-play company focused on Advanced Driving Assistance Systems and Automated Driving. We are well capitalized and positioned to capture growth and value from this long-term megatrend in the automotive industry.

Our current top priorities are order intake, execution of our current business and the competitiveness of our technology portfolio.

Our strong order intake over the last 12 months is expected to generate lifetime sales of well over $5 billion. We have recently secured 15 new orders across all of our product areas, leading to a current annual order intake at a similar level as at the end of the quarter. This includes small but strategically important orders with two new customers for Vision, Radar and Driver Monitoring in the rapidly growing market for active safety products in China. This is in addition to our previously announced major business wins during the quarter in vision and driver monitoring.

We currently see increased customer activity across our product portfolio, as well as higher than anticipated take rates for Active Safety products. These early market indicators are encouraging and if we conclude that they are likely to affect our previously announced sales targets for 2022 and beyond, they may also heighten our short-term investment needs.

Our technology portfolio is generally well positioned. Our in-house developed vision products are highly competitive, and we have the next generation products just around the corner. We are winning business in the new growth area of driver monitoring systems, and including the software developed by Zenuity we are positioning Veoneer to be a full system supplier for ADAS and AD.

The anticipated 2018 organic sales decline is mainly a result of our shift in vision product strategy in late 2013, combined with the phase-out of certain contracts in Restraint Control and Brake Systems. In line with previously communicated plans, we expect most of the anticipated strong growth from the current order intake, including Restraint Control and Brake Systems, to begin in late 2019, then stepping up in 2020 and beyond.

We begin as a NYSE and Nasdaq Stockholm listed company with a strong balance sheet of around $1 billion of cash, giving us the ability to continue to effectively invest for growth and tackle potential downturns in the market until we reach positive operating margin and cash flow.

Veoneer’s purpose is to create trust in mobility. Through our unique combination of automotive safety and technical competence we will work relentlessly to support our customers navigating in the current unparalleled change that is taking place in the automotive industry.

Outlook for 2018

Our sales indication for full year 2018 remains unchanged from January 29, 2018. Total net sales are expected to remain at approximately the same level as 2017 where organic sales are estimated to decline from the prior year by around 3%. Net sales declines in Restraint Control and Brake Systems are expected to be partially offset by Active Safety organic sales growth of more than 10%. The overall organic sales decline is expected to be offset by favorable currency translation effects.

Based on our current levels of orders and deliveries we expect the quarterly operating loss to remain around similar levels as second quarter for third quarter and fourth quarter 2018.

Our previously announced 2020 and 2022 targets remain unchanged; however, we see a current trend of increasing customer activity across geographies and our product portfolio, as well as potentially higher than anticipated take rates for Active Safety products. These early market indicators are encouraging and if we conclude that they are likely to affect our previous announced sales targets for 2022 and beyond, they may also potentially heighten our short-term investment needs.

Trends, Uncertainties and Opportunities

Europe continues to take an active role in promoting or requiring active safety technologies. The European New Car Assessment Program (“NCAP”) continuously updates its test program to include more active safety technologies to help the European Union reach its target of cutting road fatalities by 50% by 2020, compared to 2010.

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Additionally, the European Commission has proposed a new mandate to make certain active safety features compulsory in light vehicles by 2022. This European Commission proposal is up for comment during 2018 with and expected decision during 2019.  If passed in its present form, such a mandate should significantly expand demand for our active safety products.  

Market Overview

Millions,	Light Vehicle Production by Region - 2018
(except where specified)	China	Japan	Rest of Asia	Americas	Europe	Other	Total
Q2 as of Jul-16-2018	6.3	2.2	3.3	4.9	6.0	0.6	23.2
Change vs. Prior Year	8.7%	1.1%	5.0%	0.0%	4.1%	-0.2%	4.1%

During the second quarter of 2018, global light vehicle production increased by around 4% mainly due to strong growth in China, despite the increase in tax on 1.6-liter engine vehicles at year-end 2017. In addition, light vehicle demand in Europe and Rest of Asia remained very strong during the quarter.

Millions,	Light Vehicle Production by Region - 2018
(except where specified)	China	Japan	Rest of Asia	Americas	Europe	Other	Total
First Half as of Jul-16-2018	12.7	4.5	6.5	9.8	11.8	1.4	46.7
Change vs. Prior Year	2.9%	0.6%	3.4%	-0.5%	2.2%	3.7%	1.8%

During the first half of 2018, global light vehicle production increased by close to 2% as compared to 2017 due mainly to strong performance in China and Rest of Asia, Europe was essentially in line, South America was up by 2% and North America was down around 2.5% for the first half of 2018 as compared to the same period in 2017.

Non-U.S. GAAP Financial Measures

Non-U.S. GAAP measures are reconciled in the MD&A portion of this Quarterly Report on Form 10-Q. In this report we refer to organic sales or changes in organic sales growth, a non-U.S. GAAP measure that the Company, investors and analysts use to analyze the Company’s sales trends and performance. We believe that this measure assists investors and management in analyzing trends in the Company’s business because the Company generates approximately 65% of sales in currencies other than in U.S. dollars (its reporting currency) and currency rates have been and can be rather volatile. Additionally, the Company has historically made several acquisitions and divestitures.  Organic sales and organic sales growth presents the increase or decrease in the overall U.S. dollar net sales on a comparable basis, allowing separate discussions of the impact of acquisitions/divestitures and exchange rate fluctuations on the Company’s operations and results. The tables in below present changes in organic sales growth as reconciled to the change in the total U.S. GAAP net sales

The Company also uses in this report EBITDA, a non-U.S. GAAP financial measure, which represents the Company’s net income excluding interest expense, income taxes, depreciation and amortization. The Company also uses Segment EBITDA, a non-U.S. GAAP financial measure, which represents the Company’s EBITDA which has been further adjusted to exclude certain corporate and other items. We believe that EBITDA and Segment EBITDA are useful measure for management, analysts and investors to evaluate operating performance ona consolidated and reportable segment basis, because they assisted in comparing our performance on a consistent basis. The tables below provide reconciliations of net income to EBITDA and Segment EBTIDA.

The Company also uses in this report net working capital, a non-U.S. GAAP financial measure, which is defined as current assets (excluding cash and cash equivalent) less current liabilities, management uses this measure to assess liquidity at a point in time. The table below provides a reconciliation of current assets and liabilities to net working capital.

Investors should not consider these non-U.S. GAAP measures as substitutes, but rather as additions, to financial reporting measures prepared in accordance with U.S. GAAP. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.

The forward looking non-U.S. GAAP financial measure used in this report is provided on a non-U.S. GAAP basis. Veoneer has not provided a U.S. GAAP reconciliation of this measure because items that impact this measure, such as foreign currency exchange rates, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and Veoneer is unable to determine the probable significance of the unavailable information.

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Results of Operations

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

The following tables show Veoneer’s performance by segment for the three months ended June 30, 2018 and 2017 along with components of change vs. prior year.

Electronics Segment Performance

	Three Months End June 30																		Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018						2017						US GAAP Reported						Currency					Organic1)
	$			%			$			%			Chg. $			Chg. %			$		%			$			%
Net Sales	$	461					$	457					$	4			0.9	%	$	15		3.2	%	$	(11	)		-2.4	%
Operating Loss /    Margin	$	(31	)		-6.7	%	$	(7	)		-1.5	%	$	(24	)
EBITDA /%	$	(13	)		-2.8	%	$	10			2.2	%	$	(23	)
Associates		6,404						5,466						938
1) Non-U.S. GAAP measure reconciliation for Organic Sales

The net sales increase in the Electronics segment of $4 million for the quarter as compared to 2017 was mainly attributable to strong Active Safety growth which was partially offset by the decline in Restraint Control Systems sales. The operating loss in the segment increased to $31 million in the quarter as compared to 2017, primarily due to slight decrease in margin related to change in product mix and decrease in volume related to lower organic sales and increase in RD&E cost to support future organic sales growth.

For the quarter, Segment EBITDA (non-U.S. GAAP measure) declined by $23 million to negative $13 million as compared to 2017. This decrease is mainly due to the increased operating loss whereas depreciation and amortization remained relatively unchanged. The number of associates increased by over 900 mainly due to hiring of engineers to support a strong order intake for both Restraint Control Systems and Active Safety.

Brake Systems Segment Performance

	Three Months End June 30																		Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018						2017						US GAAP Reported						Currency					Organic1)
	$			%			$			%			Chg. $			Chg. %			$		%			$			%
Net Sales	$	111					$	123					$	(12	)		-9.7	%	$	4		3.3	%	$	(16	)		-13.0	%
Operating Loss /    Margin	$	(4	)		-3.6	%	$	(1	)		-0.8	%	$	(3	)
EBITDA/%	$	5			4.5	%	$	6			4.9	%	$	(1	)
Associates		1,502						1,636						(134	)
1) Non-U.S. GAAP measure reconciliation for Organic Sales

The net sales decline of $12 million in the Brake Systems segment for the quarter as compared to 2017 was mainly attributable to lower delivery volumes on certain Honda vehicle models. The operating loss in the segment increased to $4 million as compared to 2017, primarily due to decrease in volume related to lower organic sales and a slight increase in RD&E to support future organic sales growth which was partially offset by reductions in overhead costs.        

For the quarter, Segment EBITDA (non-U.S. GAAP measure) of $5 million remained relatively unchanged as compared to 2017. The increase in operating loss of $3 million was essentially offset by slightly lower depreciation on fixed assets. The number of associates declined by 134 primarily due to overhead reductions related to the Honda sales decline.

Net Sales by Product

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The following tables show Veoneer’s consolidated net sales by product for the three months ended June 30, 2018 and 2017 along with components of change vs. prior year.

Consolidated Net Sales	Three Months End June 30										Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018		2017		US GAAP Reported						Currency					Organic1)
	$		$		Chg. $			Chg. %			$		%			$			%
Restraint Control    Systems	$	246	$	266	$	(19	)		-7	%	$	11		4	%	$	(31	)		-12	%
Active Safety		215		191		24			12	%		4		2	%		20			11	%
Brake Systems		111		122		(11	)		-9	%		4		3	%		(15	)		-12	%
Total	$	572	$	579	$	(7	)		-1.2	%	$	19		3.3	%	$	(26	)		-4.5	%
1) Non-U.S. GAAP measure reconciliation for Organic Sales

Veoneer’s sales developed according to plan during the quarter in which net sales decreased by around 1% to $572 million as compared to 2017. The organic sales (non-U.S. GAAP measure) decline of 4.5% was mostly offset by currency translation effects of 3.3%, which was mainly due to a weaker US dollar as compared to 2017. The organic sales developed essentially according to plan during the quarter. The decline of Restraint Control Systems and Brake Systems, was partially offset by Active Safety growth.

Restraint Control Systemsnet sales for the quarter of $246 million decreased by 7% as compared to 2017. The organic sales (non-U.S. GAAP measure) decline of approximately 12%, was mainly attributable to the phase out of certain vehicle models.

Active Safety net sales for the quarter of $215 million increased by 12% as compared to 2017. This improvement was mainly driven by an increase in organic sales (non-U.S. GAAP measure) of 11%. Strong demand for vision systems and ADAS ECUs on several vehicle models, mono vision on the Mini, and night vision to Audi together with radar products on several models, accounted for most of the organic sales growth. This strong growth was partially offset by the continued ramp-down of current GPS business.

Brake Systems net sales of $111 million for the quarter decreased by approximately 9% as compared to 2017, mainly due to an organic sales (non-U.S. GAAP measure) decline of 12%, primarily due to lower delivery volumes on certain vehicle models.

Veoneer Performance

	Three Months ended June 30
(Dollars in millions, except per share data)	2018						2017
	Unaudited			%			Unaudited			%			Change
Net Sales	$	572					$	579					$	(7	)
Cost of sales		(460	)		-80.4	%		(459	)		-79	%		(1	)
Gross Profit		112			19.6	%		120			20.7	%		(8	)
SG&A		(37	)		-6.5	%		(26	)		-4.5	%		(11	)
RD&E		(119	)		-20.8	%		(102	)		-17.6	%		(17	)
Amortization of intangibles		(6	)		-1.0	%		(5	)		-0.9	%		(1	)
Other income (expense), net		2			0.3	%		1			0.2	%		1
Operating Loss		(48	)		-8.4	%		(12	)		-2.1	%		(36	)
Income (loss) from equity method investment		(16	)		-2.8	%		(8	)		-1.4	%		(8	)
Loss before taxes		(63	)		-11.0	%		(19	)		-3.3	%		(44	)
Taxes expense		(3	)		-0.5	%		(11	)		-1.9	%		8
Net loss	$	(66	)		-11.5	%	$	(30	)		-5.2	%	$	(36	)
Less Net loss attributable to non-controlling    interest		(3	)		-0.5	%		(2	)		-0.3	%		(1	)
Net loss attributable to controlling interest	$	(63	)		-11	%	$	(28	)		4.9	%	$	(35	)
Loss per share	$	(0.72	)				$	(0.32	)				$	(0.40	)

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Gross Profit – Gross Profit for the quarter of $112 million was $8 million lower as compared to 2017, primarily due to slight decrease in margin related to change in product mix and decrease in volume related to decline in organic sales was partially offset by positive net currency effects of around $3 million.

Operating Loss – The operating loss for the quarter of $48 million was $36 million more as compared to 2017.

The planned increase in RD&E investments of $17 million, mainly related to the increase in engineers to support customer projects for future sales growth, and higher SG&A of $11 million, mostly related to the additional costs associated with being a standalone listed company, accounted for most of the change as compared to 2017.  

The net currency effect for the quarter was negligible as compared to 2017. A slight increase in the amortization of intangibles for the quarter was offset by an increase in other income as compared to 2017.

Net Loss – The net loss for the quarter of $66 million increased by $36 million as compared to 2017. In addition to the operating loss impact, Veoneer’s net cost of the Zenuity JV increased by $8 million during the quarter as compared to 2017. This is primarily due to a higher net cost run-rate in 2018, related to the hiring of additional software engineers over the last 12 months bringing Zenuity’s total to approximately 500.

Income tax for the quarter was $3 million as compared to $11 million in 2017. The lower tax expense was primarily impacted by a reduction in the pre-tax earnings of our profitable subsidiaries. Lastly, the non-controlling interest loss in the VNBS JV was $3 million for the quarter as compared to $2 million in 2017.

Loss per Share - The loss per share decreased to $0.72 for the quarter as compared to a loss of $0.32 per share in 2017 due to the change in net loss, as the share count remained unchanged.

Results of Operations

Six Months Ended June 30, 2018 Compared to Six Months Ended June 30, 2017

The following tables show Veoneer’s performance by segment for the six months ended June 30, 2018 and 2017 along with components of change vs. prior year.

Electronics Segment Performance

	Six Months End June 30																		Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018						2017						US GAAP Reported						Currency					Organic1)
	$			%			$			%			Chg. $			Chg. %			$		%			$			%
Net Sales	$	941					$	920					$	21			2.3	%	$	44		4.8	%	$	(23	)		-2.5	%
Operating Loss /    Margin	$	(32	)		-3.4	%	$	(9	)		-1.0	%	$	(23	)
EBITDA/%	$	4			0.4	%	$	36			3.9	%	$	(32	)
Associates		6,404						5,466						938
1) Non-U.S. GAAP measure reconciliation for Organic Sales

Net sales in the Electronics segment for the first half of 2018 increased by $21 million to $941 million as compared to 2017. The increase was mainly attributable to strong Active Safety growth of approximately $45 million which was partially offset by the decline in Restraint Control Systems of approximately $23 million.

The operating loss in the Electronics segment increased by $23 million to $32 million for the first half of 2018 as compared to 2017, primarily due to slight decrease in margin related to change in product mix and decrease in volume related to unfavorable volume on lower organic sales and a planned increase in RD&E costs to support future sales growth.

For the first half of 2018, Segment EBITDA (non-U.S. GAAP measure) of $4 million was decline by $32 million when compared with the same period of 2017. In addition to the change in operating loss, amortization of intangibles increased mainly related to MACOM acquisition effects.

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The number of associates increased by approximately 500 since December 31, 2017 mainly due to increases in RD&E to support future organic sales growth.

Brake Systems Segment Performance

	Six Months End June 30																		Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018						2017						US GAAP Reported						Currency					Organic1)
	$			%			$			%			Chg. $			Chg. %			$		%			$			%
Net Sales	$	225					$	245					$	(20	)		-8.2	%	$	10		4.0	%	$	(30	)		-12.2	%
Operating Loss /    Margin	$	(12	)		-5.3	%	$	(3	)		-1.2	%	$	(9	)
EBITDA/%	$	7			3.1	%	$	16			6.5	%	$	(9	)
Associates		1,502						1,636						(134	)
1) Non-U.S. GAAP measure reconciliation for Organic Sales

The net sales decline of $20 million in the Brake Systems segment for the first half of 2018 as compared to 2017 was mainly attributable to lower volumes on certain Honda models.

The operating loss in the Brake Systems segment increased by $9 million to $12 million in the first half of 2018 as compared to 2017 primarily due to slight decrease in margin related to change in product mix and decrease in volume related to lower organic sales and slight increase in RD&E costs to support sales growth was partially offset by reduced overhead costs.

For the first half of 2018, Segment EBITDA (non-U.S. GAAP measure) of $7 million declined $9 million as compared to 2017. The change in operating loss accounted for the entire change.

The number of associates declined by close to 90 since December 31, 2017, mainly due to the reductions in direct manufacturing as well as production overhead and SG&A due to lower organic sales.

Net Sales by Product

The following tables show Veoneer’s consolidated net sales by product for the six months ended June 30, 2018 and 2017 along with components of change vs. prior year.

Consolidated Net Sales	Six Months End June 30										Components of Change vs. Prior Year
Dollars in millions, (except where specified)	2018		2017		US GAAP Reported						Currency					Organic1)
	$		$		Chg. $			Chg. %			$		%			$			%
Restraint Control    Systems	$	514	$	537	$	(23	)		-4	%	$	30		6	%	$	(53	)		-10	%
Active Safety		427		383		45			12	%		14		4	%		31			8	%
Brake Systems		225		242		(18	)		-7	%		10		4	%		(28	)		-11	%
Total	$	1,166	$	1,162	$	4			0.3	%	$	53		4.6	%	$	(50	)		-4.3	%
1) Non-U.S. GAAP measure reconciliation for Organic Sales

Veoneer net sales for the first half of 2018 increased by $4 million to $1,166 million as compared to 2017. The organic sales (non-U.S. GAAP measure) decline of 4.3% was more than offset by positive currency translation effects of 4.6%, mainly due to a weaker US dollar as compared to 2017. Organic sales developed according to plan during the first half of 2018. A decline in Restraint Control Systems and Brake Systems, was partially offset by Active Safety organic sales growth. We expect this sales trend in Restraint Control and Brake Systems to rebound during 2019 and into 2020 based on new business awarded during 2016 and 2017.

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Restraint Control Systems net sales of $514 million for the first half of 2018 decreased by 4% as compared to 2017. The organic sales (non-U.S. GAAP measure) decline of approximately 10% was mainly driven by the phase-out of certain models.

Active Safety net sales of $427 million for the first half of 2018 increased by 12% as compared to 2017. This improvement was mostly driven by an increase in organic sales (non-U.S. GAAP measure) of 8%. Strong demand for vision systems, ADAS ECUs and radar products on multiple models accounted for most of the organic sales growth together with night vision systems to Audi. This strong growth was partially offset by the continued ramp-down of current GPS business.

Brake Systems net sales of $225 million for the first half of 2018 decreased by approximately 7% as compared to 2017, mainly due to an organic sales (non-U.S. GAAP measure) decline of 11%, primarily due to lower volumes on certain models.

Veoneer Performance

	Six Months ended June 30
(Dollars in millions, except per share data)	2018						2017
	Unaudited			%			Unaudited			%			Change
Net Sales	$	1,166					$	1,162					$	4
Cost of sales		(943	)		-80.9	%		(929	)		-79.9	%		(14	)
Gross Profit		223			19.1	%		233			20.1	%		(10	)
SG&A		(68	)		-5.8	%		(55	)		-4.7	%		(13	)
RD&E		(225	)		-19.3	%		(189	)		-16.3	%		(36	)
Amortization of intangibles		(11	)		-0.9	%		(24	)		-2.1	%		13
Other income (expense), net		17			1.5	%		13			1.1	%		4
Operating Loss		(64	)		-5.5	%		(22	)		-1.9	%		(42	)
Income (loss) from equity method investment		(30	)		-2.6	%		(8	)		-0.7	%		(22	)
Loss before taxes		(93	)		-8.0	%		(30	)		-2.6	%		(63	)
Taxes expense		(10	)		-0.9	%		(22	)		-1.9	%		12
Net loss	$	(103	)		-8.8	%	$	(52	)		-4.5	%	$	(51	)
Less Net (loss) attributable to non-controlling    interest		(8	)		-0.7	%		(4	)		-0.3	%		(4	)
Net Loss attributable to controlling interest	$	(95	)		-8.1	%	$	(48	)		-4.1	%	$	(47	)
Loss per share	$	(1.09	)				$	(0.55	)				$	(0.54	)

Gross Profit – Gross Profit of $223 million for the first half of 2018 was $10 million lower as compared to 2017, primarily due to slight decrease in margin related to change in product mix and decrease in volume related to from the decline in organic sales was partially offset by net currency effects of around $17 million.

Operating Loss – The operating loss of $64 million for the first half of 2018 was $42 million more as compared to 2017, including a net favorable currency benefit of $6 million. The planned increase in RD&E investments of $36 million, mainly related to the increase in engineers for future sales growth, and higher SG&A of $13 million, mainly resulting from the additional costs associated with being a standalone public company, accounted for most of the change from 2017.

These effects were partially offset by a $13 million decrease in the amortization of intangibles related to acquisitions, which prior year amortizations was the result of an impairment charge in 2017, and a $4 million increase in other income during the first half of 2018.

Net Loss – The net loss for the first half of 2018 of $103 million was $51 million more as compared to 2017.

In addition to the operating loss impact, the Veoneer net cost of the Zenuity JV increased by $22 million for the first half of 2018 due to the increased net cost run-rate in 2018 and an additional quarter of cost in 2018 since the JV was formed in April 2017.

Income tax for the first half of 2018 was $10 million as compared to $22 million in 2017. The tax expense was primarily impacted by a reduction in the pre-tax earnings of our profitable subsidiaries. The non-controlling interest loss in the VNBS JV was $8 million for the first half of 2018 as compared to $4 million in 2017.

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Loss per Share - The loss per share for the first half of 2018 increased to $1.09 as compared to a loss of $0.55 per share in 2017 due to the change in net loss.

Reconciliations to U.S. GAAP

	Three months ended						Six months ended
EBITDA	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Electronics	$	(13	)	$	10		$	4		$	36
Brake Systems		5			6			7			16
Segment EBITDA		(8	)		16			11			52
Corporate and other		(13	)		(4	)		(20	)		(10	)
EBITDA	$	(21	)	$	12		$	(9	)	$	42
	Three months ended						Six months ended
RECONCILIATION OF NET LOSS TO EBITDA	June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017
Net Loss	$	(66	)	$	(30	)	$	(103	)	$	(52	)
Depreciation and amortization		27			24			55			64
Loss from equity method investment		16			8			30			8
Interest and other non-operating items, net		(1	)		(1	)		(1	)		-
Income tax		3			11			10			22
EBITDA	$	(21	)	$	12		$	(9	)	$	42

	As of
Dollars in millions, (expect where specified)	June 30, 2018			March 31, 2018		December 31, 2017		June 30, 2017
Total current assets	$	1,699		$	706	$	648	$	675
Total current liabilities		584			646		590		615
Working capital		1,115			60		58		60
Cash and cash equivalents		(980	)		-		-		-
Net working capital	$	135		$	60	$	58	$	60

Liquidity and Capital Resources

Liquidity

As of June 30, 2018, the Company had cash and cash equivalents of $980 million, which includes the $1 billion net capital contribution from Autoliv as part of the Spin-Off.

The Company’s liquidity requirements are primarily for ongoing working capital requirements and capital expenditures including on-going investments in joint ventures, particularly Zenuity, as well as certain anticipated business combinations. The primary source of liquidity is the existing cash balance of approximately $1 billion which will help fund our planned operations until Veoneer reaches positive cash flow. We expect existing cash and available liquidity to be sufficient to fund our global activities. To the extent we generate more cash flow than expected, we may consider using this cash flow for undertaking new capital investment projects, strategic acquisitions, and/or general corporate purposes.

During the year ended December 31, 2017, the Company entered an unconditional purchase obligation for $10 million to be paid in each of the fiscal years 2018 and 2019. These amounts will be reimbursed by Zenuity. In addition, the Company has a holdback of $2 million related to the Fotonic acquisition to be paid in 2019. See Note 4, Business Combinations, to the Combined Financial Statements included herein. The Company has no other material obligations other than short-term obligations related to operations, inventory, services, tooling, and property, plant and equipment purchased in the ordinary course of business.

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

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amount. As of June 30, 2018, Veoneer contributed a total $5 million to the fund. The initial term of the fund is set to expire on December 31, 2025. This fund focuses broadly on the automotive industry and complements the Company’s innovation strategy, particularly in the areas of active safety and autonomous driving. Under the limited partnership agreement, the general partner has the sole and exclusive right to manage, control, and conduct the affairs of the fund.

Cash Flows

	Six Months Ended June 30
Dollars in millions, (except where specified)	2018			2017
Selected cash flow items	$
Net cash provided by operating activities	$	(164	)	$	(35	)
Capital expenditures	$	(71	)	$	(50	)
Equity method investment	$	(71	)	$	(112	)
Net Cash Used in Investing Activities	$	(62	)	$	(164	)
Net Cash Provided by Financing Activities	$	1,206		$	199

Net Cash Used in by Operating Activities

Net Cash used in operating activities of $164 million for the first half of 2018 increased by $129 million as compared to 2017 mainly due to the change in net loss and timing of changes in working capital.

Days receivables outstanding, outstanding receivables relative to average daily sales, were 82 at June 30, 2018, compared to 75 at June 30, 2017.

Days inventory outstanding, outstanding inventory relative to average daily sales, were 21 as of June 30, 2018, compared to 21 at June 30, 2017.

Net Cash Used in Investing Activities

Net cash used in investing activities of $62 million for the first half of 2018 was $102 million lower as compared to 2017, mainly due to higher capital expenditures which was more than offset by lower affiliate investments and the repayment of related party note receivable.

Net Cash Provided by Financing Activities

Cash and Cash equivalents for the quarter of $980 million includes the net capital contribution from Autoliv. Net transfers from Former Parent were consistent for the first six months of 2018 and 2017.

Net Working Capital

The net working capital (non-U.S. GAAP measure) of $135 million at the end of the quarter was an increase of $75 million as compared to the prior quarter in 2017. The increase was mainly due to timing of changes in working capital.

The net working capital (non-U.S. GAAP measure) of $135 million at the end of the quarter was an increase of $77 million since December 31, 2017. The increase is mainly due to an increase in related party receivables.

Capital Expenditures

Capital expenditures during the first half of 2018 of $71 million was approximately 6% of sales and $21 million more as compared to 2017. This level is slightly lower than the expectation for full year 2018.

Shareholder Equity

Shareholder equity, excluding non-controlling interest for the quarter of $1,989 million includes the cash liquidity provided from Autoliv immediately prior to the spin-off.

Associates

The number of associates increased to 7,937 during the quarter due to the addition of more than 250 engineers to support future sales growth. Over the last year, close to 800 engineers have been hired while direct manufacturing associates have been reduced close to 100 reflecting the current decline in organic sales.

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Significant Legal Matters

For discussion of legal matters we are involved in, see Note 12, Contingent Liabilities, to the Condensed Consolidated Financial Statements included herein.

Off-Balance Sheet Arrangements and Other Matters

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows.

Contractual Obligations and Commitments

There have been no significant changes to the contractual obligation and commitments disclosed in the current report on Form 8-K filed with the SEC on July 2, 2018.

Significant Accounting Policies and Critical Accounting Estimates

See Note 2, “New Accounting Standards” to the accompanying Condensed Financial Statements for descriptions of new accounting standards.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2018, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that was provided in the Company’s Information Statement included with the current report on Form 8-K filed with the SEC on July 2, 2018.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

An evaluation has been carried out, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various claims, litigation and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters.

For a description of our material legal proceedings, see Note 12 Contingent Liabilities – Legal Proceedings to our unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

As of June 30, 2018, there have been no material changes to the risk factors that were previously disclosed in the Company’s Information Statement included in the current report on Form 8-K filed with the SEC on July 2, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

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ITEM 6. EXHIBITS

Exhibit No.	Description
2.1	Distribution Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K (filing date July 2, 2018).
3.1	Amended and Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (filing date July 2, 2018).
3.2	Amended and Restated Bylaws, incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K (filing date July 2, 2018).
4.1	General Terms and Conditions for Swedish Depository Receipts in Veoneer, Inc., effective as from May 30, 2018, incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date June 4, 2018).
10.1	Employee Matters Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (filing date July 2, 2018).
10.2	Tax Matters Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (filing date July 2, 2018).
10.3	Amended and Restated Master Transition Services Agreement, dated June 28, 2018, between Veoneer, Inc. and Autoliv, Inc., incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K (filing date July 2, 2018).
10.4+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Jan Carlson, incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.5+	Severance Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Jan Carlson, incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.6+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Mathias Hermansson, incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.7+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Johan Löfvenholm, incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.8+	Change-in-Control Severance Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Johan Löfvenholm, incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.9+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Lars Sjöbring, incorporated herein by reference to Exhibit 10.12 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.10+	Change-in-Control Severance Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Lars Sjöbring, incorporated herein by reference to Exhibit 10.13 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.11+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Thomas Jönsson, incorporated herein by reference to Exhibit 10.14 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.12+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Mikko Taipale, incorporated herein by reference to Exhibit 10.15 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.13+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Arthur Blanchford, incorporated herein by reference to Exhibit 10.16 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).

41

10.14+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Peter Rogbrant, incorporated herein by reference to Exhibit 10.17 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.15+	Employment Agreement, effective as of June 29, 2018, by and between Veoneer, Inc. and Steven Rodé, incorporated herein by reference to Exhibit 10.18 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date May 21, 2018).
10.16+	Form of Indemnification Agreement between Veoneer, Inc. and its officers and directors, incorporated herein by reference to Exhibit 10.12 to the Current Report on Form 8-K (filing date July 2, 2018).
10.17*+	Veoneer, Inc. 2018 Stock Incentive Plan.
10.18*+	Veoneer, Inc. Non-Employee Director Compensation Policy.
10.19*+	Form of Non-Employee Director restricted stock unit grant agreement to be used under the Veoneer, Inc. 2018 Stock Incentive Plan.
10.20*+	Veoneer, Inc. Non-Qualified Retirement Plan.
10.21	Cooperation Agreement, dated May 24, 2018, among Autoliv, Inc., Veoneer, Inc. and Cevian Capital II GP Limited, incorporated herein by reference to Exhibit 10.21 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date June 4, 2018).
10.22	Form of Support Agreement among Autoliv, Inc., Veoneer, Inc. and the other parties thereto, incorporated herein by reference to Exhibit 10.22 to the Company’s Registration Statement on Form 10 (File No. 001-38471, filing date June 4, 2018).
31.1*	Certification of the Chief Executive Officer of Veoneer, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*	Certification of the Chief Financial Officer of Veoneer, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*	Certification of the Chief Executive Officer of Veoneer, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Chief Financial Officer of Veoneer, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018, 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.

42

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: July 27, 2018

VEONEER, INC.

(Registrant)

By:	/s/ Mathias Hermansson
	Mathias Hermansson
	Chief Financial Officer
	(Duly Authorized Officer and Principal Financial Officer)

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EX-10.17

Exhibit 10.17

VEONEER, INC.

2018 STOCK INCENTIVE PLAN

1.    Purpose. The purpose of the Veoneer, Inc. 2018 Stock Incentive Plan (the “Plan”) is to promote the long term financial interests and growth of Veoneer, Inc. (the “Company”) by (a) attracting and retaining executive personnel, (b) motivating executive personnel by means of growth-related incentives, (c) providing incentive compensation opportunities that are competitive with those of other major corporations; and (d) furthering the identity of interests of participants with those of the stockholders of the Company. In addition, the Plan permits grants of awards in adjustment of, substitution for or conversion of awards relating to the ordinary shares of Autoliv, Inc. and any successor thereto (“Former Parent”) immediately prior to the spin-off of the Company by Former Parent (the “Spinoff”), in accordance with the terms of an Employee Matters Agreement into which Former Parent and the Company enter in connection with the Spinoff (the “Employee Matters Agreement”).

2.    Definitions. The following definitions are applicable to the Plan:

“Adjusted Award” means an Award that is issued under the Plan in accordance with the terms of the Employee Matters Agreement in adjustment of, substitution for or conversion of an option, time-based restricted stock unit or performance-based restricted stock unit award (or other Former Parent award outstanding at the time of the Spinoff) that was granted under a Former Parent Plan. Notwithstanding anything in the Plan to the contrary, subject to the Award Agreements for the Adjusted Awards, the Adjusted Awards will reflect substantially the original terms of the awards being so adjusted or converted, and they need not comply with other specific terms of the Plan.

“Award Agreement” means a written document, in such form as the Committee (as defined below) prescribes from time to time, setting forth the terms and conditions of an award. Award Agreements may be in the form of individual award agreements or certificates or a program document describing the terms and provisions of an award or series of awards under the Plan. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant (as defined below). With respect to Adjusted Awards, the term also includes any writing or memorandum or summary of terms that may be specified by the Former Parent Committee, together with any evidence of award under any Former Parent Plan that may be referred to therein.

“Affiliate” means any entity in which the Company has a direct or indirect equity interest which is so designated by the Committee.

“Code” means that the Internal Revenue Code of 1986, as amended, and any successor statute.

“Committee” means a committee of two or more directors of the Company who are “Non-Employee Directors” as such term is used in Rule 16b-3.

“Common Stock” means the common stock, $1 par value, of the Company or such other securities as may be substituted therefor pursuant to paragraph 5(c).

“Distribution Date” means the effective date of the distribution in connection with the Spinoff.

“Effective Date” means the Distribution Date.

“Exchange” means any national securities exchange on which the Common Stock may from time to time be listed or traded.

The “Fair Market Value” of the Common Stock on any date, means the “Closing Market Price.”  The “Closing Market Price” means the price at which the Company’s security was last sold in the principal United States market for such security as of the date for which the closing market price is determined. If the Common Stock is listed on a U.S. securities exchange, the Closing Market Price will be the closing sales price on such exchange or over such system on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported, or (ii) if the Common Stock is not listed on a securities exchange, the last sale price as quoted by the applicable interdealer quotation system for such date, provided that if the Common Stock is not quoted on such interdealer quotation system or it is determined that the fair market value is not properly reflected by such quotations, Fair Market Value will be determined by such other method as the Committee determines in good faith to be reasonable and in compliance with Section 409A of the Code.

“Former Parent Committee” means the Leadership Development and Compensation Committee of the Board of Directors of Former Parent.

“Former Parent Plan” means the Autoliv, Inc. Amended and Restated 1997 Stock Incentive Plan, as amended, or any similar or predecessor plan sponsored by Former Parent or any of its subsidiaries, as applicable, under which any awards remain outstanding as of the date immediately prior to the Distribution Date.

“Participant” means (i) any employee, non-employee director or consultant of the Company or an Affiliate selected by the Committee and granted an award under the Plan, and (ii) holders of Adjusted Awards.

“Rule 16b-3” means such rule adopted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor rule.

3.    Limitation on Aggregate Shares. The number of shares of Common Stock with respect to which awards may be granted under the Plan and which may be issued upon the exercise or payment thereof shall not exceed, in the aggregate, a number of shares equal to 3,000,000, all of which may be granted as incentive stock options (“ISOs”) within the meaning of Section 422 of the Code or any successor provision, plus 1,957,388 shares of Common Stock subject to Adjusted Awards; provided, however, that to the extent any awards expire unexercised or unpaid or are cancelled, terminated or forfeited in any manner without the issuance of shares of Common Stock thereunder, such shares shall again be available under the Plan. Such shares of Common Stock may be either authorized and unissued shares, treasury shares, or a combination thereof, as the Committee shall determine.

4.    Awards. The Committee may grant to Participants, in accordance with this paragraph 4 and the other provisions of the Plan, stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), deferred stock units (“DSUs”) and other cash-based or stock-based awards.

(a)    Options.

(i)    Options granted under the Plan may be ISOs within the meaning of Section 422 of the Code or any successor provision, or in such other form, consistent with the Plan, as the Committee may determine.

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(ii)    The option price per share of Common Stock shall be fixed by the Committee at not less than 100% of the Fair Market Value of a share of Common Stock on the date of grant (except in the case of Adjusted Awards).

(iii)    Options shall be exercisable at such time or times as the Committee shall determine at or subsequent to grant.

(iv)    Options shall be exercised in whole or in part by written notice to the Company (to the attention of the Corporate Secretary) and payment in full of the option price. Payment of the option price may be made, at the discretion of the optionee, and to the extent permitted by the Committee, (A) in cash (including check, bank draft, or money order), (B) in Common Stock (valued at the Fair Market Value thereof on the date of exercise), (C) by a combination of cash and Common Stock or (D) with any other consideration.

(v)    Except as otherwise provided in paragraph 5(c), the option price of an option may not be reduced, directly or indirectly by cancellation and regrant or otherwise, without the prior approval of the stockholders of the Company.

(vi)    Notwithstanding anything in this Plan or any Award Agreement, no option shall provide for dividend equivalents or have any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the option.

(vii)    No option granted under the Plan shall be exercisable for more than ten (10) years from the date of grant.

(b)    SARs.

(i)    An SAR shall entitle its holder to receive from the Company, at the time of exercise of such right, an amount equal to the excess of the Fair Market Value (at the date of exercise) of a share of Common Stock over a specified price fixed by the Committee (“Base Price”) multiplied by the number of shares as to which the holder is exercising the SAR. The amount payable may be paid by the Company in Common Stock (valued at its Fair Market Value on the date of exercise), cash or a combination thereof, as the Committee may determine, which determination shall be made after considering any preference expressed by the holder.

(ii)    An SAR shall be exercised by written notice to the Company (to the attention of the Corporate Secretary) at any time prior to its stated expiration.

(iii)    An SAR shall have a Base Price that is not less than the Fair Market Value of a share of Common Stock as of the date of grant.

(iv)    Except as otherwise provided in paragraph 5(c), the Base Price of a SAR may not be reduced, directly or indirectly by cancellation and regrant or otherwise, without the prior approval of the stockholders of the Company.

(v)    Notwithstanding anything in this Plan or any Award Agreement, no SAR shall provide for dividend equivalents or have any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the SAR.

(vi)    No SAR shall be exercisable for more than ten (10) years from the date of grant.

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(c)    Restricted Stock; Restricted Stock Units; Deferred Stock Units.

(i)    The Committee is authorized to make awards of restricted stock, restricted stock units (“RSUs”) or deferred stock units (“DSUs”) to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An award of restricted stock, RSUs or DSUs shall be evidenced by an Award Agreement setting forth the terms, conditions, and restrictions applicable to the award.

(ii)    There shall be established for each restricted stock and RSU award a restriction period (the “restriction period”) of such length as shall be determined by the Committee. Shares of restricted stock or RSUs may not be sold, assigned, transferred, pledged or otherwise encumbered, except as hereinafter provided, during the restriction period. Awards of restricted stock, RSUs or DSUs shall be subject to such other restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote restricted stock or the right to receive dividends on the restricted stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines at the time of the grant of the award or thereafter. Except for such restrictions on transfer and such other restrictions as the Committee may impose, the Participant shall have all the rights of a holder of Common Stock as to such restricted stock and the Participant shall have none of the rights of a stockholder with respect to RSUs or DSUs until such time as shares of stock are paid in settlement of the RSUs or DSUs. The Committee, in its sole discretion, may permit or require the payment of cash dividends or dividend equivalents on restricted stock, RSUs or DSUs to be deferred and, if the Committee so determines, reinvested in additional restricted stock RSUs or DSUs or otherwise invested. Unless otherwise provided in the applicable Award Agreement, any dividends or dividend equivalents paid on restricted stock, RSUs or DSUs will be paid or distributed to the holder no later than the end of the calendar year in which the dividends are paid to stockholders or, if later, the 15th day of the third month following the date the dividends are paid to stockholders.

(iii)    Shares of restricted stock shall be delivered to the Participant at the time of grant either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or one or more of its employees) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If physical certificates representing shares of restricted stock are registered in the name of the Participant, such certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such restricted stock, shall be registered in the name of the Participant and deposited, together with a stock power endorsed in blank, with the Company. At the expiration of the restriction period, the Company shall redeliver to the Participant (or the Participant’s legal representative or designated beneficiary) the certificates deposited pursuant to this paragraph.

(iv)    Except as provided by the Committee at the time of grant or otherwise, upon a termination of employment of the Participant for any reason during the applicable restriction period or upon failure to satisfy a performance goal during the applicable restriction period, all shares of restricted stock or RSUs still subject to restriction shall be forfeited by the Participant.

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(d)    Other Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to the Common Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including without limitation shares of Common Stock awarded purely as a “bonus” and not subject to any restrictions or conditions; convertible or exchangeable debt securities; other rights convertible or exchangeable into shares of Common Stock, and awards valued by reference to the value of securities of or the performance of the Company. Such awards may be payable in Common Stock, cash or both, and shall be subject to such restrictions and conditions, as the Committee shall determine.

(e)    Performance Conditions on Awards.

(i)    The Committee is authorized to grant any award under this Plan, including cash-based awards, with performance-based vesting criteria, on such terms and conditions as may be selected by the Committee.  The Committee may establish performance goals for such awards which may be based on any criteria selected by the Committee, including but not limited to the criteria listed in subsection (ii) hereof.  In addition, the Committee shall, if applicable, determine a performance period and performance goals to be achieved during the performance period, subject to such later revisions as the Committee shall deem appropriate to reflect significant unforeseen events such as changes in laws, regulations or accounting practices, unusual or non-recurring items or occurrences. Following the conclusion of each performance period, the Committee shall determine the extent to which performance goals have been attained or a degree of achievement between maximum and minimum levels during the performance period in order to evaluate the level of payment to be made, if any.

(ii)    The Committee may establish performance goals for performance-based awards based on any performance criteria it selects, including but not limited to any of the following criteria, which may be expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of an Affiliate or a division, region, department or function within the Company or an Affiliate:

• Revenue

• Sales

• Profit (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures)

• Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures)

• Net income (before or after taxes, operating income or other income measures)

• Cash (cash flow, cash generation or other cash measures)

• Stock price or performance

• Total stockholder return (stock price appreciation plus reinvested dividends divided by beginning share price)

• Economic value added (and other value creation measures)

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• Return measures (including, but not limited to, return on assets, capital, equity, investments or sales, and cash flow return on assets, capital, equity, or sales);

• Market share

• Improvements in capital structure (including, but not limited to, debt to equity ratio and debt to total assets ratio)

• Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures)

• Business expansion or consolidation (acquisitions and divestitures)

• Internal rate of return or increase in net present value

• Working capital targets relating to inventory and/or accounts receivable

• Safety standards

• Productivity measures

• Cost reduction measures

• Strategic plan development and implementation.

Performance goals with respect to the foregoing performance criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, that the Committee deems appropriate. The Committee may determine that any member of a comparable group or an index that disappears during a measurement period shall be disregarded for the entire measurement period. Performance goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion).

(B)    The Committee may provide in any performance-based award that any evaluation of performance shall exclude or otherwise objectively adjust for any specified event that occurs during a performance period, including by way of example but without limitation the following: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization and restructuring programs; (e)unusual or infrequently occurring items as described in Accounting Standards Codification Topic 225-20 (or any successor pronouncements thereto) and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year; (f) any other specific, unusual or nonrecurring events, or objectively determinable category thereof, including discontinued operations  or changes in the Company’s fiscal year; (g) acquisitions or divestitures; and (h) foreign exchange gains and losses.

(C)    Any payment of a performance-based award shall be conditioned on the written certification of the Committee in each case that the performance goals and any other material conditions were satisfied.

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(e)    Deferrals. The Committee may allow a Participant may elect to defer all or a portion of any award (other than an option or SAR) in accordance with procedures established by the Committee and in compliance with Section 409A of the Code, if applicable. Deferred amounts will be subject to such terms and conditions and shall accrue such yield thereon (which may be measured by the Fair Market Value of the Common Stock and dividends thereon) as the Committee may determine. Payment of deferred amounts may be in cash, Common Stock or a combination thereof, as the Committee may determine. Deferred amounts shall be considered an award under the Plan. The Committee may establish a trust to hold deferred amounts or any portion thereof for the benefit of Participants. Notwithstanding anything in this Plan, no option or SAR granted under this Plan shall have any feature for the deferral of compensation other than the deferral of recognition of income until the exercise or disposition of the option or SAR.

(f)    Foreign Alternatives. Without amending and notwithstanding the other provisions of the Plan, in the case of any award to be held by any Participant who is employed outside the United States or who is a foreign national the Committee may specify that such award shall be made on such terms and conditions different from those specified in the Plan, as may, in the judgment of the Committee, be necessary or desirable to further the purposes of the Plan.

5.    Miscellaneous Provisions.

(a)    Administration. The Plan shall be administered by the Committee. Subject to the limitations of the Plan, the Committee shall have the sole and complete authority: (i) to select Participants in the Plan, (ii) to make awards in such forms and amounts as it shall determine, (iii) to impose such limitations, restrictions and conditions upon such awards as it shall deem appropriate, (iv) to interpret the Plan and to adopt, amend and rescind administrative guidelines and other rules and regulations relating to the Plan, (v) to correct any defect or omission or to reconcile any inconsistency in the Plan or in any award granted hereunder and (vi) to make all other determinations and to take all other actions necessary or advisable for the implementation and administration of the Plan. The Committee’s determinations on matters within its authority shall be conclusive and binding upon the Company and all other persons. All expenses associated with the Plan shall be borne by the Company, subject to such allocation to its Affiliates and operating units as it deems appropriate. The Committee may delegate any of its authority under clauses (i), (ii) or (iii) above to such persons as it deems appropriate; provided, however, that such delegation may not be made with respect to the grant of awards to eligible Participants who are subject to Section 16(a) of the Exchange Act as of the date of grant of an award. The acts of such delegates shall be treated hereunder as acts of the Committee and such delegates shall report regularly to the Committee regarding the delegated duties and responsibilities and any awards so granted.

(b)    Non-Transferability. Except as may otherwise be determined by the Committee and subject to provisions of paragraph 5(f), (i) no award under the Plan, and no interest therein, shall be transferable by the Participant otherwise than by will or the laws of descent and distribution, and (ii) all awards shall be exercisable or received during the Participant’s lifetime only by the Participant or the Participant’s legal representative. Any purported transfer contrary to this provision will nullify the award.

(c)    Adjustments Upon Certain Changes. In the event of a reorganization, recapitalization, spinoff, stock dividend or stock split, or combination or other increase or reduction in the number of issued shares of Common Stock, the Board of Directors or the Committee shall, in order to prevent the dilution or enlargement of rights under awards, make such adjustments in the number and type of shares authorized by the Plan, the number and type of shares covered by, or with respect to which payments are measured under, outstanding awards and the exercise prices specified therein as may be determined to be appropriate and equitable.

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The Committee may provide in the Award Agreement for adjustments to such award in order to prevent the dilution or enlargement of rights thereunder or to provide for acceleration of benefits thereunder in the event of a change in control, merger, consolidation, reorganization, recapitalization, sale or exchange of substantially all assets or dissolution of, or spinoff or similar transaction by, the Company.

Notwithstanding any other provision of the Plan to the contrary, except as otherwise provided in the Award Certificate or any special document governing an Award, in the event of a Change in Control: (i) any SARs and options outstanding as of the date such Change in Control is determined to have occurred and not then exercisable and vested shall become fully exercisable and vested to the full extent of the original grant; and (ii) the service-based restrictions applicable to any restricted stock or stock unit shall lapse, and such award shall become free of all restrictions and become fully vested and transferable to the full extent of the original grant; and (iii) the target payout opportunities attainable under all outstanding stock-settled performance-based awards shall be deemed to have been fully earned as of the effective date of the Change in Control based upon an assumed achievement of all relevant performance goals at the “target” level and there shall be a prorata payout to Participants within thirty (30) days following the effective date of the Change in Control based upon the length of time within the performance period that has elapsed prior to the Change in Control. The Committee may in its sole discretion determine that, upon the occurrence of a Change in Control, that any performance-based criteria with respect to any cash-settled performance-based Awards held by a Participant shall be deemed to be wholly or partially satisfied as of such date as the Committee may, in its sole discretion, declare, and the Committee may discriminate among Participants and among Awards granted to a Participant in exercising such discretion.

For purposes of the Plan, a “Change in Control” shall mean the happening of any of the following events:

(i)    An acquisition after the Spinoff by any individual, entity or group (with the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company or (4) any acquisition of the Company by any corporation pursuant to a reorganization, merger, consolidation or similar corporate transaction (hereinafter referred to as a “Corporate Transaction”), if, pursuant to such Corporate Transaction, the conditions described in clauses (1), (2) and (3) of subparagraph (iii) below are satisfied; or

(ii)    A change in the composition of the Board of Directors after the Spinoff such that the individuals who, as of the Effective Date the, constituted the Board of Directors (such Board of Directors shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, for purposes of this subparagraph, that any individual who becomes a member of the Board of Directors subsequent to the Effective Date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board of Directors and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such

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terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors shall not be so considered as a member of the Incumbent Board; or

(iii)    The consummation of a Corporate Transaction after the Spinoff; excluding, however, such a Corporate Transaction pursuant to which (1) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction and the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the electron of directors, in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction or any Person beneficially owning, immediately prior to such Corporate Transaction, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (3) individuals who were members of the Incumbent Board constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

(iv)    The consummation after the Spinoff of (1) a complete liquidation or dissolution of the Company or (2) the sale or other disposition of all or substantially all of the assets of the Company; excluding, however, such a sale or other disposition to a corporation, with respect to which immediately following such sale or other disposition, (A) more than 60% of, respectively, the outstanding shares of common stock of such corporation and the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors is beneficially owned, directly, or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (other than the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of such corporation and the combined voting power of the outstanding securities of such corporation entitled to vote generally in the election of directors and (c) individuals who were members of the Incumbent Board constitute at least a majority of the members of the board of directors of such corporation.

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(d)    Tax Withholding. The Committee shall have the power to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy any withholding or other tax due with respect to any amount payable and/or shares issuable under the Plan, and the Committee may defer such payment or issuance unless indemnified to its satisfaction. Unless otherwise determined by the Committee at the time the Award is granted or thereafter, a Participant may make an irrevocable election to have shares of Common Stock otherwise issuable under an award withheld, tender back to the Company shares of common stock received pursuant to an award or deliver to the Company previously-acquired shares of Common Stock, in each case, having a Fair Market Value on the date of withholding equal to the amount required to be withheld in accordance with applicable tax requirements (up to the maximum individual statutory rate in the applicable jurisdiction as may be permitted under then-current accounting principles to qualify for equity classification),in accordance with such procedures as the Committee establishes. Such election must be made by a Participant prior to the date on which the relevant tax obligation arises. The Committee may disapprove of any election and may limit, suspend or terminate the right to make such elections.

(e)    Listing and Legal Compliance. The Committee may suspend the exercise or payment of any award so long as it determines that securities exchange listing or registration or qualification under any securities laws is required in connection therewith and has not been completed on terms acceptable to the Committee.

(f)    Beneficiary Designation. Subject to paragraph 5(b), Participants may name, from time to time, beneficiaries (who may be named contingently or successively) to whom benefits under the Plan are to be paid in the event of their death before they receive any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the participant in writing with the Committee during the participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

(g)    Rights of Participants. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company for any period of time or to continue his or her present or any other rate of compensation. No employee shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant.

(h)    Amendment, Suspension and Termination of Plan. The Board of Directors or the Committee may suspend or terminate the Plan or any portion thereof at any time and may amend it from time to time in such respects as the Board of Directors or the Committee may deem advisable. No such amendment, suspension or termination shall impair the rights of Participants under outstanding awards without the consent of the Participants affected thereby.

The Committee may amend or modify any award in any manner to the extent that the Committee would have had the authority under the Plan to initially grant such award. No such amendment or modification shall impair the rights of any Participant under any award without the consent of such Participant.

(i)    Code Section 409A

(1)    Application. The provisions of this Section 5(i) shall apply only with respect to participants who are subject to the provisions of Section 409A of the Code.

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(2)    General. It is intended that the payments and benefits provided under the Plan and any award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and any Award Agreement shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any award.

(3)    Definitional Restrictions. Notwithstanding anything in the Plan or any Award Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installments) would be effected, under the Plan or by reason of the occurrence of a Change in Control or separation from service, such amount or benefit will not be payable or distributable to the Participant, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control or separation from service meet any description or definition of “change in control event” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not prohibit the vesting of any award upon a Change in Control or separation from service, however defined. If this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the next earliest payment or distribution date or event specified in the award that is permissible under Section 409A. If this provision prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as would have applied absent such designated event or circumstance.

(4)    Allocation among Possible Exemptions. If any one or more awards granted under the Plan to a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such awards in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through the Committee) shall determine which awards or portions thereof will be subject to such exemptions.

(5)    Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any Award Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Plan or any Award Agreement by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i)    the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the Participant’s death) (in either case, the “Required Delay Period”); and

(ii)    the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder, provided, however, that, as permitted in such

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final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.

(6)    Grants to Employees of Affiliates. Eligible Participants who are service providers to an Affiliate may be granted options or SARs under this Plan only if the Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of §1.409A-1(b)(5)(iii)(E) of the final regulations under Code Section 409A.

(7)    Anti-Dilution Adjustments. Notwithstanding any anti-dilution provision in the Plan, the Committee shall not make any adjustments to outstanding options or SARs that would constitute a modification or substitution of the stock right under Treas. Reg. Sections 1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or change in the form of payment for purposes of Code Section 409A.

**********

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The foregoing is hereby acknowledged as being the Veoneer, Inc. 2018 Stock Incentive Plan as adopted by the Board on June 1, 2018, and by the Company’s sole stockholder on June 1, 2018.

VEONEER, INC.
By:	/s/ Lars Sjöbring
Name:	Lars Sjöbring
Title:	Executive Vice President, Legal Affairs, General Counsel and Secretary

EX-10.18

Exhibit 10.18

VEONEER, INC.

NON-EMPLOYEE DIRECTOR COMPENSATIONPOLICY

Effective June 29, 2018

I. Retainers.  The following shall remain in effect until changed by the Board:

Annual BaseRetainer* in USD
All Non-Employee Directors other thanChairman	$240,000
Non-executiveChairman	$390,000
Lead Director Annual SupplementalRetainer*	$40,000
Committee Chair Annual SupplementalRetainers*
AuditCommittee	$30,000
CompensationCommittee	$20,000
Nominating and Corporate GovernanceCommittee	$20,000

*Subject to proration as described below.

II. Payment Schedule

AnnualBaseRetainer

1) Payment in Cash.  Fifty percent (50%) of the applicable Annual Base Retainer will be paid (a) in cash, (b) in advance, (c) on a quarterly basis and (d) prorated as described below.

“Quarterly Service Period”	Payment Date
May 1 to July 31	3 business days after the date of Annual General Meeting of Stockholders (“AGM”)
August 1 to October 31	August 1*
November 1 to January 31	November 1*
February 1 to April 30	February 1*

• If a non-employee director is newly appointed or elected to the Board at the AGM, then his or her first quarterly cash payment will be prorated to reflect two full calendar months of service (e.g. if the AGM is in May, then the first quarterly cash payment will be with respect to service during June and July of such Quarterly Service Period).  

• If a non-employee director is newly appointed or elected to the Board at any time other than at an AGM, then his or her first quarterly cash payment will be prorated to reflect the number of full calendar months of service between the effective date of the non-employee director’s appointment or election through the last day of the respective Quarterly Service Period (e.g. if a non-employee director is appointed to the Board on December 15, then his or her first quarterly cash payment will be with respect to service during January of such Quarterly Service Period), and will be paid on the third business day following the date of his or her appointment or election.

• If a non-employee director is not re-elected at the AGM, or a newly-nominated individual is not elected as a non-employee director at the AGM, then he or she will not receive any cash payment for servicesduring the month of such AGM.

*If the payment date is not a business day, then the applicable payment shall be made on the first business day immediately following the payment date.

2) Payment in Stock. SubjecttoshareavailabilityundertheVeoneer, Inc. StockIncentivePlan,as the same may be amended from time to time (the “Plan”), fifty percent (50%) of the applicable Annual Base Retainer will be paid in the form of restricted stock units (the “Annual RSU Award”) granted on the date that the AGM is held (or, if the person becomes a non-employee director at any time other than at an AGM, the first business day following the effective date on which the person becomes a non-employee director) (in either case, a “RSU Grant Date”). The Annual RSU Awards will be granted under, and subject to the terms and conditions of, thePlan, and will vest on the earlier of (i) date of the next AGM, or (ii) the one-year anniversary of the RSU Grant Date (the “RSU Vesting Date”), subject to the non-employee director’s continued service on the Board on the RSU Vesting Date. If a non-employee director’s service on the Board terminates for any reason prior to the RSU Vesting Date, then he or she will forfeit the Annual RSU Award. The number of RSUs granted pursuant to the Annual RSU Award willbedeterminedby(A)dividingtheamountthatisfiftypercent(50%)oftheapplicableAnnualBaseRetainer by the closing price of a share of Common Stock on the RSU Grant Date and (B) rounding to the nearest whole number. If a non-employee director is newly appointed or elected to the Board at any time other than at an AGM, then the dollar value of his or her Annual RSU Award will be prorated based on the number of full calendar months between the effective date of the non-employee director’s appointment or election through the month in which the next AGM will be held.  

Lead Director and Committee Chair Retainers

Lead Director and Committee Chair annual supplemental retainers will be paid in cash quarterly in advance, as set forth in the table above, and subject to proration as described under the “Annual Base Retainer” section above. In the event a non-employee director is serving as Committee Chair during a Quarterly Service period and leaves such appointment to be appointed as a Committee Chair with a higher retainer or as Lead Director during the same Quarterly Service Period, the quarterly retainer for such director will be re-calculated pro-rated for days of service in each role during the quarter and the difference is paid on the third business day following his or her appointment.

Stock Ownership Policy.  Non-employee directors are required to hold shares of Common Stock granted pursuant to the Annual Stock Grants until he or she has met the ownership requirements set forth in the Veoneer, Inc. Stock OwnershipPolicyforNon-EmployeeDirectors.

EX-10.19

Exhibit 10.19

Non-Employee Director

GRANT AGREEMENT

Applicable to Restricted Stock Units promised under the Veoneer, Inc. 2018 Stock Incentive Plan

Your above-described grant of restricted stock units (“RSUs”) is subject to the following provisions in addition to those set forth in the attached Notice of Grant (the “Grant Notice”) and the Veoneer, Inc. 2018 Stock Incentive Plan (the “Plan”):

1. Defined Terms: Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.  

2. Vesting: The RSUs have been credited to a bookkeeping account (“Account”) on your behalf as of the grant date specified in the Grant Notice (the “Grant Date”).  Your Account will reflect the number of RSUs awarded to you as set forth in the Grant Notice, as well as any additional RSUs credited as a result of dividend equivalents, as described in Section 9 below. Each RSU represents an unfunded, unsecured right to receive Common Stock, subject to the terms and conditions stated in the Plan and this Grant Agreement. Your RSUs will vest and become non-forfeitable on the earliest to occur of the following (each, a “Date of Vesting”):

(a) as to all of the RSUs, on the Date of Vesting specified in the Grant Notice, provided that you are then still providing services as a member of the Board of Directors of the Company (the “Board”); or

(b) as to all of the RSUs, upon the occurrence of a Change in Control, provided that you are then still providing services as a member of the Board.

If your service on the Board terminates for any reason, you will forfeit all right, title and interest in and to the unvested RSUs as of the date of such termination, and the unvested RSUs will be reconveyed to the Company without further consideration or any act or action by you.

3. Conversion to Shares of Common Stock; Procedure at Date of Vesting:

a. Unless the RSUs are forfeited prior to the Date of Vesting as provided in Section 2 above, the RSUs will be converted on the Date of Vesting to actual shares of Common Stock.  The shares of Common Stock to be issued pursuant to this Grant Agreement shall be issued in the form of book-entry shares of Common Stock in your name as the beneficial owner as of the Date of Vesting.  

1

Non-Employee Director

b. You will, if requested, within the specified time set forth in any such request (not to exceed 30 days), deliver to the Company such written representations and undertakings as may, in the opinion of the Company’s legal counsel, be necessary or desirable to comply with tax and securities laws.  

4. Securities Law Restrictions; Insider Trading Policy:

You may not offer, sell or otherwise dispose of any shares of Common Stock in a manner which would violate any applicable laws, including, without limitation, the laws of Sweden, U.S. federal and state securities laws, U.S. federal law, the requirements of any stock exchange or quotation system upon which the Common Stock may then be listed or quoted and any laws of any other country or jurisdiction that may be applicable to you.

In connection with receipt of this Grant Agreement, you acknowledge that you are subject to the Company’s Insider Trading Policy which is available upon request to the Legal department of the Company.

5. Change in Control of the Company:

Notwithstanding any provision herein to the contrary, your RSUs shall be immediately vested in full upon the occurrence of a Change in Control.

6. Non-Transferability:

Your RSUs are personal to you and shall not be transferable by you otherwise than by will or the laws of descent and distribution.

7. Conformity with Plan:

Your RSUs are intended to conform in all respects with the Plan, including any future amendments thereto. Inconsistencies between this Grant Agreement and the Plan shall be resolved in accordance with the terms of the Plan. All definitions stated in the Plan shall be fully applicable to this Grant Agreement.

8. Service and Successors:

Nothing herein or in the Grant Notice or in the Plan confers any right or obligation on you to continue providing services to the Company or shall affect in any way your right or the right of the Company or any subsidiary, as the case may be, to terminate your service at any time. This Grant Agreement, the Grant Notice and the Plan, including any future amendments thereto, shall be binding upon you, your estate, any person succeeding to your rights hereunder and any successor or successors of the Company.  The RSUs do not confer to you or any person succeeding to your rights hereunder any rights of a shareholder of the Company unless and until shares of Common Stock are in fact issued to you or such person in connection with the settlement of the RSUs.

9. Dividend Equivalent Rights:  

Subject to share availability under the Plan, any cash dividend paid with respect to the Common Stock for which the record date occurs on or after the Grant Date and the payment date occurs on or before the Date of Vesting will result in a credit to your

2

Non-Employee Director

Account of additional RSUs equal to (a) the dollar amount of the dividend per share of Common Stock multiplied by the number of RSUs credited to your Account as of the applicable record date, divided by (b) the closing price per share of the Common Stock on the New York Stock Exchange on the applicable dividend payment date. The additional RSUs credited pursuant to this Section 9 will be subject to the same vesting schedule, forfeiture and other terms that apply to the original RSUs. On the Date of Vesting, the aggregate number of any additional RSUs credited pursuant to this Section 9 over time shall be rounded down to the nearest whole share.  RSUs that, at the relevant dividend payment date, previously have been settled or forfeited will not be eligible to receive dividend equivalents pursuant to this Section 9.

10. Tax:

You are totally responsible for paying all taxes that you incur in respect of this Grant Agreement. The Company has the authority and the right to deduct or withhold, or require you to remit, an amount sufficient to satisfy all applicable taxes required by law to be withheld with respect to any taxable event arising as a result of vesting or settlement of the RSUs.  The withholding requirement may be satisfied, in whole or in part, by withholding from the settlement of the RSUs, shares of Common Stock having a fair market value on the date of withholding equal to the minimum amount (and not any greater amount unless such other withholding rate will not cause an adverse accounting consequence or cost) required to be withheld for tax purposes, all in accordance with such procedures as the Company establishes.  The obligations of the Company hereunder will be conditional on such payment, and the Company will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to you.

11. Governing Law:

This Grant Agreement, the Grant Notice and the Plan shall be construed in accordance with and governed by the laws of the State of Delaware, USA, and, to the extent relevant, the local laws of your home country.

12. Severability:

If any one or more of the provisions contained in this Grant Agreement are invalid, illegal or unenforceable, the other provisions of this Grant Agreement will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included.

13. Director Stock Ownership Requirements:

In connection with receipt of this Grant Agreement, you acknowledge that you are subject to the Company’s policy regarding “Stock Ownership Policy for Directors”.

14. Fractional Shares:

No fractional shares of Common Stock, nor the cash value of any fractional shares of Common Stock, will be issuable or payable to you pursuant to this Agreement.

3

EX-10.20

Exhibit 10.20

VEONEER NON-QUALIFIED RETIREMENT SAVINGS PLAN

Established Effective as of June 30, 2018

TABLE OF CONTENTS

PAGE
ARTICLE I - DEFINITIONS	1
ARTICLE II - ADMINISTRATION	3
ARTICLE III - PARTICIPATION	4
ARTICLE IV - DEFERRED AMOUNTS	5
ARTICLE V - CREDITING OF DEFERRED AMOUNTS AND VALUATION OF ACCOUNTS	6
ARTICLE VI - COMMENCEMENT OF BENEFITS	6
ARTICLE VII - BENEFICIARY DESIGNATION	8
ARTICLE VIII - FUNDING	8
ARTICLE IX - AMENDMENT AND TERMINATION	9
ARTICLE X - WITHDRAWALS FOR UNFORESEEABLE EMERGENCY	9
ARTICLE XI - CLAIMS PROCEDURE	10
ARTICLE XII - GENERAL PROVISIONS	12

i

Exhibit 10.20

VEONEERNON-QUALIFIED RETIREMENTSAVINGS PLAN

Established Effective as of June 30, 2018

Veoneer US, Inc., a Delaware corporation (the “Employer”), hereby establishes, effective as of June 30, 2018, the Veoneer Non-Qualified Retirement Savings Plan (the “Plan”) as a deferred compensation arrangement for a select group of management or highly compensated employees.  The Plan is intended to aid in retaining and attracting executives who are employees of exceptional ability, by providing such employees with a means to supplement their income at retirement.  The terms of the Plan shall be construed in accordance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations thereunder.  

Article I
DEFINITIONS

For purposes of the Plan, the following words and phrases shall have the following meanings unless a different meaning is plainly required by the context.

1.1“Account” means an account established on the books of the Employer for purposes of recording amounts credited on behalf of a Participant and any income, expenses, gains or losses thereon, maintained and valued in accordance with Article V.  In the event that a Participant receives or begins receiving distributions from the Participant’s Account under Article VI, a new Account shall be established for purposes of recording amounts credited on behalf of such Participant and any income, expenses, gains or losses thereon, for years following the distribution event relating to the original Account.

1.2“Beneficiary” or “Beneficiaries” means the person or persons designated under Article VII to receive any benefits in the event of the Participant’s death.

1.3“Board” means the Board of Directors of the Employer.

1.4“Change in Control” shall mean a change in ownership or effective control of the stock, or of a substantial portion of the assets of the Employer resulting from one or more of the following circumstances:

(a)the acquisition by one person (or more than one person acting as a group) of more than 50% of the total fair market value or total voting power of the stock of the Employer;

(b)either (i) the acquisition by one person (or more than one person acting as a group) of stock possessing more than 30% of the total voting power of the Employer during the twelve (12) month period ending on the date of the most recent acquisition, or (ii) the replacement of at least 67% of the members of the Board during any twelve (12) month period by directors whose appointment or election is not endorsed by a vote of at least two-thirds of the members of the Board as constituted immediately prior to the date of such appointment or election; or

(c)the acquisition of the assets of the Employer with a total gross fair market value equal to at least 40% of the total gross fair market value of all assets of the Employer determined immediately prior to such acquisition.  Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred under this subparagraph (c) when there is a transfer to an entity which is controlled by the shareholders of the transferring corporation immediately after the transfer as provided in Treasury Regulation Section 1.409A-3(h)(5)(B).

In no event shall the consummation of a transaction constitute a Change in Control if the transaction is not described in Treasury Regulation Section 1.409A-3(i)(5).

1.5“Claim” shall mean a request by a Claimant in accordance with Article XI for a benefit under the Plan.

1.6“Claimant” means any person who claims to be entitled to a benefit under the Plan.

1.7“Code” means the Internal Revenue Code of 1986, as amended.

1.8“Committee” means the administrative committee of not less than three (3) persons appointed by the Board to administer the Plan.

1.9“Compensation” means wages as defined in Section 3401(a) of the Code and all other payments of compensation to a Participant by the Employer (in the course of the Employer’s trade or business) for which the Employer is required to furnish the Participant a written statement under Section 6041(d) and 6051(a)(3) of the Code, excluding the value of stock options (qualified and non-qualified options) to the extent such value is includible in the Participant’s taxable income, reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation and welfare benefits, but including amounts that are not includable in the gross income of the Participant under a salary reduction agreement by reason of the application of Sections 125 or 402(g)(3) of the Code.  Compensation must be determined without regard to any rules under Section 3401(a) of the Code that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Section 3401(a) of the Code).

1.10“Deferral Agreement” means the written participation agreement (substantially in the form attached to this Plan) that shall be entered into by the Employer and a Participant pursuant to Articles III and IV to carry out the Plan with respect to such Participant.

1.11“Deferred Amounts” means the portion of each Participant’s Compensation deferred each Plan Year pursuant to a Deferral Agreement executed by the Participant.

1.12“Eligible Employee” means any employee of the Employer who has been identified by the Board as from a select group of management or highly compensated employee and been designated as eligible for participation in the Plan.  An employee shall cease to be an Eligible Employee if the employee terminates employment with the Employer.

1.13“Employer” means the Employer and any of its Related Employers which have been designated by the Board as participating employers in the Plan.

2

1.14“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.15“Fiscal Year” means the fiscal year of the Employer beginning on January 1 and ending on December 31 of each year.

1.16“Investment Options” means the securities or funds identified by the Committee from time to time as the investments available as to the growth measurement mechanism for Accounts under the Plan.

1.17“Matching Contributions” means the Employer contribution made pursuant to Section 4.3.

1.18“Participant” shall have the meaning provided under Section 3.3.

1.19“Plan” means this Veoneer Non-Qualified Retirement Savings Plan, as it may be amended from time to time.

1.20“Plan Year” means the twelve (12) month period beginning on January 1 and ending on December 31 of each year.

1.21“Rate of Return” means the amount credited monthly to a Participant’s Account under Article V.  Except as provided in Section 5.2(a), such rate shall be determined by the Committee based upon the net performance of the Investment Options selected by the Participant pursuant to Section 5.2.

1.22“Related Employer” means any employer other than the Employer if the Employer and such other employer are members of a controlled group of corporations (as defined in Section 414(b) of the Code) or an affiliated service group (as defined in Section 414(m) of the Code), or are trades or businesses (whether or not incorporated) which are under common control (as defined in Section 414(c) of the Code), or such other employer required to be aggregated with the Employer pursuant to regulations issued under Section 414(o) of the Code.

Article II
ADMINISTRATION

2.1The Plan shall be administered by the Committee.  The Committee shall have the authority to interpret the Plan, to establish and revise rules and regulations relating to the Plan, to make any other determinations that it believes necessary or advisable for the administration of the Plan and to delegate such administrative powers and duties as it shall determine.  All decisions of the Committee shall be by a vote of the majority of its members and shall be final and binding unless the Board shall determine otherwise.  Members of the Committee who are Eligible Employees shall be eligible to participate in the Plan while serving as a member of the Committee, but a member of the Committee shall not vote or act upon any matter which relates solely to such member as a Participant.

2.2The Employer shall indemnify and hold harmless the members of the Committee and their delegates against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the Plan, except in the case of gross negligence or willful misconduct.

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Article IIIPARTICIPATION

3.1Eligible Employees become Participants as of the first day of the month coinciding with or next following his or her designation as an Eligible Employee.  By such date as the Committee shall determine, but not later than the day (i.e., normally December 31) immediately preceding the first day of any Plan Year, the Committee shall permit any employee who is an Eligible Employee to elect to defer Compensation effective as of the first day of such Plan Year by filing a completed and executed Deferral Agreement with the Committee.  Notwithstanding the foregoing, in the case of the first year in which an Eligible Employee shall become a Participant, an Eligible Employee shall be permitted to elect to defer Compensation effective as of the first day of the month following the filing of a completed and executed Deferral Agreement with the Committee; provided that the Deferral Agreement is filed within 30 days after the Eligible Employee first became eligible to participate in the Plan. An election once made shall remain in effect until a new election is made.  A new election will be effective as of the first day of the following Plan Year and will apply only to Compensation payable with respect to services rendered on or after such date.  If at any time during the Plan Year any Participant ceases to be an Eligible Employee, the deferrals of Compensation of such Participant shall cease as of such date.

3.2If an Eligible Employee or Participant does not elect, on a timely basis, to defer compensation in any Plan Year, or ceases, pursuant to Section 3.1, to be an Eligible Employee during any Plan Year, such Participant will not be permitted to defer Compensation under the Plan until the first day of the immediately succeeding Plan Year; provided that he or she is an Eligible Employee on such date.  If a Participant terminates employment with the Employer and thereafter returns to the employ of the Employer as an Eligible Employee, he or she will not be permitted to actively participate (i.e., defer Compensation) following his or her reemployment until at least 24 months have elapsed since the Participant was last eligible to actively participate in the Plan.  Notwithstanding the foregoing, if a former Participant is rehired by the Employer as an Eligible Employee, he or she will be eligible to actively participate (i.e., defer Compensation) immediately following his or her reemployment as an Eligible Employee if his or her entire Account balance was distributed and he or she ceased to be a Participant prior to his or her reemployment.  Such rehired former Participants shall be treated as initially eligible to participate in the Plan under Section 4.1 in accordance with the foregoing.  

3.3An Eligible Employee shall become a Participant in the Plan as of the date he or she first commences participation in the Plan and shall remain a Participant until the earlier of the Participant’s death or the complete distribution of the Participant’s Account.

3.4Notwithstanding anything in the Plan to the contrary, the Committee shall be authorized to take such steps as may be necessary to ensure that the Plan is and remains at all times an unfunded deferred compensation arrangement for a select group of management or highly compensated employees, within the meaning of ERISA and the Code, or such other successor or applicable laws.

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Article IVDEFERRED AMOUNTS

4.1An Eligible Employee electing to defer Compensation in accordance with Article III shall have the right to determine his or her Deferred Amounts for each Plan Year (or, in the case of the first year of eligibility to participate in the Plan, within 30 days after the Eligible Employee first became eligible), subject to the limitations set forth in this Article IV.  Such Deferred Amounts shall reduce the amount of the Participant’s Compensation that is to be paid to the Participant in the Plan Year of reference.

4.2(a)By such date as the Committee shall determine, but not later than the December 31 immediately preceding the first day of each Plan Year (or, in the case of the first year of eligibility to participate in the Plan within 30 days after the Eligible Employee first became eligible), an Eligible Employee may elect to defer a stated percentage (equal to a whole number) of his or her Compensation for such Plan Year; provided, however, that the amount deferred may not exceed 25% of the Participant’s Compensation.

(a)Each validly executed and timely filed Deferral Agreement shall be effective for the first Plan Year for which it is timely filed and for each succeeding Plan Year, until (i)  modified or revoked by a subsequently timely filed, validly executed Deferral Agreement applicable to any such succeeding Plan Year, (ii) the Participant’s eligibility ceases or (iii) the Participant terminates employment with the Employer for any reason.  Any Eligible Employee who fails to timely file a validly executed Deferral Agreement with the Committee with respect to any Plan Year, shall not defer Compensation under the Plan in such Plan Year.

(b)Except as provided in Articles VI and X, each validly executed Deferral Agreement filed with the Committee may not be terminated or modified by the Participant until the first day of the succeeding Plan Year by timely filing with the Committee prior to such date a validly executed Deferral Agreement.

4.3The Employer shall make Matching Contributions in amounts equal to 80% of the Participant’s Deferred Amounts during the Plan Year.  Deferred Amounts in excess of 7% of the Participant’s Compensation for the period in question shall not be considered for Matching Contributions.  Matching Contributions shall be credited to the Participant’s Account the same day the corresponding Deferred Amounts are credited.

4.4The Participant shall at all times be 100% vested in the Deferred Amounts and earnings thereon in his or her Account.  The Matching Contributions and earnings thereon in his or her Account are subject to forfeiture only if the Participant is determined by the Board to have stolen Employer assets, violated the Business Conduct Policy of the Employer or disclosed confidential business or technical information of the Employer to unauthorized third parties.

4.5The Employer may credit “non-elective contributions” to the Account of one or more Participants in such amounts as determined by the Board in its sole discretion; provided that such contributions are not contingent on the Participant’s decision to make, or refrain from making, elective deferrals to a plan of the Employer with a deferral feature under Section 401(k) of the Code.  The Participant shall be vested in the non-elective contributions and earnings

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thereon in his or her Account pursuant to a vesting schedule, if any, established by the Board at the time it authorizes such “non-elective contributions.”

Article V
CREDITING OF DEFERRED AMOUNTS AND VALUATION OF ACCOUNTS

5.1The Committee shall establish and maintain a separate bookkeeping Account on behalf of each Participant.  The value of an Account as of any date shall equal the sum of credits for Deferred Amounts elected by the Participants, Matching Contributions and “non-elective contributions,” if any, made by the Employer, all adjusted for the Rate of Return pursuant to this Article V, through the day preceding such date and less all payments made by the Employer to the Participant or his/her Beneficiary through the day preceding such date.

5.2Unless otherwise delegated, the Committee shall (a) determine the Investment Options available as the measurement mechanism for the Rate of Return on Accounts under the Plan and (b) establish procedures for (i) the manner and extent to which Participants may designate the investments for his or her Account from among the Investment Options, (ii) the method of valuing the Accounts and the various Investment Options and (iii) the method of crediting the Accounts with the Rate of Return, including making other adjustments as a result of dividend equivalents, interest equivalents or other earnings or return on such Accounts.

5.3The Employer shall not be required to purchase, hold or dispose of any securities representing the Investment Options designated by a Participant.  Participants shall not have any voting rights or any other ownership rights with respect to the Investment Options in which their Accounts are invested or deemed invested.

5.4The Accounts shall be valued by the Committee as of each December 31.  The Accounts may also be valued by the Committee as of any other date as the Committee may authorize for the purpose of determining the Accounts for payment of benefits, or any other reason the Committee deems appropriate.

5.5The Committee shall submit to each Participant periodic statements, at least annually, in such form as the Committee deems desirable, setting forth the balance standing to the credit of each Participant in his/her Account.

Article VI
COMMENCEMENT OF BENEFITS

6.1The amount credited to a Participant’s Account shall be distributed to such Participant in the form provided under this Article VI.  Except as otherwise provided in Section 6.2, a Participant may select in his or her Deferral Agreement one or more of the following distribution events (including first or last event designated):  (a) separation from service with the Employer (within the meaning of Regulation §1.409A-1(h)) commencing on the first day of the seventh month following the separation from service (without regard to whether the Participant is a “specified employee” within the meaning of Regulation § 1.409A‑1(i) as of the date of separation from service), (b) attainment of normal retirement age (i.e., age 65) or (c) attainment of early retirement age (i.e., age 55 and five (5) years of service with the Employer and/or a predecessor employer).  In the event a Participant fails to select a distribution event in

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his or her Deferral Agreement, the Participant shall be deemed to have elected separation from service as his or her distribution event.

6.2(a)Except as otherwise provided in this Section 6.2, the amount credited to a Participant’s Account shall be paid in one of the following forms:  (i) a single lump sum, (ii) 60 approximately equal monthly installments or (iii) 120 approximately equal monthly installments, as the Participant shall elect in any Deferral Agreement.  Such benefit shall be paid or commence within 60 days (with no discretion on the part of the Participant to select the taxable year of payment if the 60-day period straddles a taxable year end) following the date on which the selected distribution event occurs.  The Participant shall not be entitled to select a different form of distribution with respect to amounts credited to the Participant Account in each Plan Year.  Instead, the distribution form selected by the Participant shall apply to the entire balance of the Participant’s Account.  Notwithstanding the foregoing, a new Participant Account shall be established for a Participant who receives or begins receiving distributions from the Participant’s Account pursuant to this Article VI. Deferred Amounts for years subsequent to the year of the distribution event shall be credited to the new Account.  The Participant may elect in any Deferral Agreement the form of distribution for the new Account which may be different from the form of distribution elected for the original Account which is in pay status.  

(a)The Participant may modify the form of distribution selected by the Participant; provided that such modification (i) is made on a validly executed and timely filed Deferral Agreement at least 12 months prior to the original payment date on which distribution of the Participant’s Account would have been made or commenced if the deferred compensation will be paid at a specified time or date; (ii) will not be effective for at least 12 months after the new Deferral Agreement is filed with the Committee; and (iii) except with respect to payments made as a result of death or “unforeseeable emergency,” the new payment date must be at least five (5) years after the original payment date (or in the case of installment payments, five (5) years from the date the first installment was scheduled to be paid).

(b)In the event of a Participant’s death after benefits have commenced but prior to the complete distribution of his or her Account, the balance of such Participant’s Account shall continue to be distributed to such Participant’s Beneficiary in the same form they were being paid prior to the Participant’s death. In the event of the death of the Participant’s last Beneficiary prior to the complete distribution of the Participant’s Account, the balance of the Participant’s Account shall be paid to the deceased Beneficiary’s estate in the same form the benefits were being paid previously.

(c)Notwithstanding anything in this Section 6.2 to the contrary, in the event that (1) a Participant has failed to designate a form of distribution in his or her Deferral Agreement, (2) the value of a Participant’s Account does not exceed the applicable dollar amount under Section 402(g)(l) of the Code, as of the date benefits first become distributable, or (3) a Change in Control occurs, the Committee shall cause such Participant’s Account to be distributed in a single lump sum payment and, in the case of a Change in Control, cause the distribution of the Participant’s Account to be made within 60 days (with no discretion on the part of the Participant to select the taxable year of payment if the 60-day period straddles a taxable year end) following the Change in Control.

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6.3If the Participant or the Participant’s Beneficiary is entitled to receive any benefits hereunder and is in his or her minority, or is, in the judgment of the Committee, legally, physically or mentally incapable of personally receiving and receipting any distribution, the Committee may make distributions to a legally appointed guardian or to such other person or institution as, in the judgment of the Committee, is then maintaining or has custody of the payee.

6.4After all benefits have been distributed in full to the Participant or to the Participant’s Beneficiary, all liability under the Plan to such Participant or to his or her Beneficiary shall cease.

6.5No benefit shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by the Participant or Beneficiary, and any such action shall be void for all purposes.  No benefit shall in any manner be subject to the debts, contracts, liabilities, engagements or torts of the Participant or Beneficiary, nor shall it be subject to attachments or other legal process for or against the Participant or Beneficiary, except to such extent as may be required by law.

6.6To the extent required by law in effect at the time payments are made, the Employer is authorized to withhold from payments made hereunder the minimum taxes required to be withheld by the federal or any state or local government.

Article VII
BENEFICIARY DESIGNATION

7.1The Participant may, at any time, designate a Beneficiary or Beneficiaries to receive the benefits payable in the event of his or her death and may designate a successor Beneficiary or Beneficiaries to receive any benefits payable in the event of the death of any other Beneficiary.  Each Beneficiary designation shall become effective only when filed in writing with the Committee during the Participant’s lifetime on a form prescribed by the Committee.  The filing of a new Beneficiary designation form will cancel all Beneficiary designations previously filed.  Any finalized divorce or marriage (other than a common law marriage) of a Participant subsequent to the date of filing of a Beneficiary designation form shall revoke such designation.  The spouse of a Participant domiciled in a community property jurisdiction shall join in any designation of Beneficiary or Beneficiaries other than the spouse.  If no Beneficiary shall be designated by the Participant, or if his or her Beneficiary designation is revoked by marriage, divorce or otherwise without execution of another designation, or if the designated Beneficiary or Beneficiaries shall not survive the Participant, payment of the Participant’s Account shall be made to the Participant’s estate in a single lump sum payment.  Notwithstanding any provision of this Plan to the contrary, any Beneficiary designation may be changed by a Participant by the written filing of such change on a form prescribed by the Committee.

Article VIII
FUNDING

8.1The Employer will establish a “rabbi trust” to hold assets to fund part or all of the benefits to be provided under the Plan.  Any assets held in the trust shall remain the unrestricted property of the Employer at all times, subject to the claims of general creditors of the Employer.  

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Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any assets held in the trust other than the right or claim of a general creditor of the Employer.

8.2If a Participant or Beneficiary becomes entitled to a distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation or other such liability representing an amount owing to the Employer, then the Employer may offset such amount owing it against the amount of benefits otherwise distributable.  Such determination shall be made by the Committee.

Article IX
AMENDMENT AND TERMINATION

9.1The Employer reserves the right, subject to Section 409A of the Code, to amend the Plan at any time and to any extent that it may deem advisable without the consent of the Participants or their Beneficiaries, by a written instrument signed by an authorized officer of the Employer; provided, however, that no amendment shall affect adversely the rights of the Participants or their Beneficiaries with respect to benefits which have accrued under the Plan prior to such amendment.

9.2The Employer may time terminate the Plan at any time.  Upon any termination of the Plan under this Section 9.2, each Participant shall cease to make deferrals under the Plan, and all amounts shall prospectively cease to be deferred for such Plan Year.  Unless otherwise permitted by Section 409A of the Code, benefits payable under the Plan shall be paid at such times and pursuant to such terms and conditions as were effective immediately prior to the termination of the Plan.

Article X
WITHDRAWALS FOR UNFORESEEABLE EMERGENCY

10.1Subject to the provisions set forth herein, a Participant may withdraw up to 100% of his or her Account as reasonably necessary (which may include amounts necessary to pay any federal, state, local or foreign income taxes or penalties reasonably anticipated to result from the withdrawal) to satisfy an unforeseeable emergency which the Participant is unable to meet through (a) reimbursement or compensation by insurance or otherwise, (b) liquidation of the Participant’s assets (unless the liquidation of these assets would itself cause severe financial hardship), or (c) cessation of deferrals under the Plan.  The amount of such unforeseeable emergency withdrawal may not exceed the amount required to meet such unforeseeable emergency.

10.2(a)Upon written application, the Committee, in its sole discretion, may grant a withdrawal to the Participant for an unforeseeable emergency.  For purposes of this Article X, an “unforeseeable emergency” means a severe financial hardship to the Participant resulting from: (i) an illness or accident of: (1) the Participant; (2) the Participant’s spouse; or (3) the Participant’s “dependent” as defined in Section 152 of the Code (without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); (ii) loss of the Participant’s property due to casualty; and (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control (e.g., imminent foreclosure of, or eviction from, the Participant’s

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primary residence, payment of medical expense or funeral expenses related to a spouse, Beneficiary or dependent).   Unforeseeable emergency withdrawals of less than $1,000 are not permitted.

(a)The Participant shall be required to furnish evidence of the purpose and need for the withdrawal to the Committee on forms prescribed by the Committee.

10.3Notwithstanding any other provision of the Plan to the contrary, upon written application of the Participant following an unforeseeable emergency withdrawal, the Committee may, in the case of an unforeseeable emergency, authorize the cancellation of the Participant’s Deferral Agreement.

Article XI
CLAIMS PROCEDURE

11.1Each Claimant shall have the right to submit a Claim with respect to a benefit sought hereunder.  Written notice of any Claim hereunder must be given to the Committee either personally or by certified or registered mail, return receipt requested, at the following address:

Veoneer US, Inc.

Attn:     Director of Compensation and Benefits

26545 American Drive

Southfield, Michigan 48035

Such Claim shall state with particularity:

(a)The benefit claimed;

(b)The provisions of the Plan and the particular provisions of law, if any, upon which the Claimant relies in support of his or her Claim; and

(c)All facts believed to be relevant in connection with such Claim.

11.2Upon receipt of a Claim hereunder, the Committee shall consider the merits of the Claim and shall within 90 days from the receipt of the Claim render a decision on the merits and communicate the same to the Claimant.  In the event the Committee denies the Claim in whole or in part, the Claimant shall be so notified in writing, which shall be addressed and delivered to him or her personally or by mail, and shall set forth the following in a manner reasonably calculated to be understood by the Claimant:

(a)The reason or reasons for rejection of the Claim;

(b)The provisions of the Plan and the particular provisions of law, if any, relied upon in reaching such determination;

(c)A description of any additional information needed from the Claimant in order for him or her to perfect his or her Claim and an explanation of why such information is necessary; and

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(d)A statement outlining the Appellate Review Procedure as set forth in Section 11.3.

11.3Where a Claim has been denied, the Claimant shall have the right within 60 days after the date he or she receives notice that his or her Claim has been rejected, in whole or in part, to an Appellate Review Procedure as set forth herein.  Such procedure shall enable the Claimant to appeal from an adverse decision by delivering a written request for an appeal to the Committee either personally or by certified or registered mail, return receipt requested.  Such request shall set forth the reasons why the Claimant believes the decision rejecting his or her Claim is erroneous and shall be signed by the Claimant under oath.  Within 30 days after such request is received, the Committee shall conduct a full and fair review of the entire Claim at a hearing, de novo, and shall invite the Claimant to present his or her views with respect to the merits of the Claim.  In addition, the Claimant may submit issues and comments in writing to the Committee for consideration at the hearing and may review, upon request and free of charge, pertinent documents.  A decision with respect to the merits of the Claim shall be rendered by the Committee not later than the later of:

(a) 30 days after the end of the hearing; or

(b) 60 days after the delivery of the written request for an appeal hereunder unless (or up to 120 days after such delivery in the case of Claims requiring legal, accounting, or actuarial research or analysis, or other such information which may not be within the direct control of the Committee and which, therefore, may require more than 60 days to decide.

The Appellate Review decision shall include specific reasons believed to support such decision, including specific references to provisions of the Plan and of law, shall be written in a manner reasonably calculated to be understood by the Claimant and shall be delivered to the Claimant personally or by certified or registered mail, return receipt requested.

11.4No action shall be commenced under Section 502(a)(1)(B) of ERISA, or under any other provision of law, until the Claimant shall first have exhausted the Claims Procedure available to him or her hereunder, provided that such Claimant would not have been irreparably and materially harmed by any delay occasioned by this Claims Procedure.  Insofar as the same is not inconsistent with regulations promulgated under Section 503 of ERISA, relating to claims procedures, any Claim under this Claims Procedure must be submitted within three (3) months from the earlier of (a) the date on which the Claimant learned of facts sufficient to enable him or her to formulate such Claim, or (b) the date on which the Claimant should reasonably have been expected to learn the facts sufficient to enable him or her to formulate such Claim.  Claims submitted after such period shall be deemed to have been waived by the Claimant and shall thereafter be wholly unenforceable.  No statute of limitations set forth under either Section 413 of ERISA, or any other applicable provision of law, shall be deemed to be extended in any way by the period of limitations set forth herein with respect to this Claims Procedure.

11.5All references in this Article XI to Claimant shall include representatives who are duly authorized as such, in writing, which authorization shall have been delivered to the Committee at some stage of the Claims Procedure.  After such written authorization is delivered, copies of all subsequent communications with the Claimant and decisions with respect to the

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Claim, for which such authorization has been provided, shall be delivered to the authorized representative, as well as to the Claimant.

Article XII
GENERAL PROVISIONS

12.1Neither the establishment of the Plan, nor any modification thereof, nor the creation of an Account, nor the payment of any benefits shall be construed (a) as giving the Participant, Beneficiary or any other person, any legal or equitable right against the Employer unless such right shall be specifically provided for in the Plan or conferred by affirmative action of the Employer in accordance with the terms and provisions of the Plan, or (b) as giving the Participant the right to be retained in the service of the Employer, and the Participant shall remain subject to discharge to the same extent as if the Plan had never been established.

12.2A Participant will cooperate with the Employer by furnishing any and all information requested by the Employer in order to facilitate the payment of benefits hereunder, taking such physical examinations as the Employer may deem necessary and taking such other relevant action as may be requested by the Employer.  If a Participant refuses so to cooperate, the Employer shall have no further obligation to the Participant under the Plan.

12.3All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, as the identity of the person or persons may require.  As the context may require, the singular may be read as the plural and the plural as the singular.

12.4Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the principal office of the Employer, directed to the attention of the Corporate Secretary of the Employer.  Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or receipt for registration or certification.

12.5The validity of the Plan or any of its provisions shall be determined under and construed according to the laws of the State of Michigan, except to the extent Michigan law is preempted by federal law, including, but not limited to, ERISA.  Should any provision of the Plan or any regulations adopted thereunder be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions or regulations unless such invalidity shall render impossible or impractical the functioning or the Plan and, in such case, the appropriate parties shall immediately adopt a new provision or regulation to take the place of the one held illegal or invalid.

12.6Nothing contained herein shall preclude the Employer from merging into or with, or being acquired by, another business entity.

12.7The liabilities under the Plan shall be binding upon any successor or assign of the Employer and any purchaser of the Employer or substantially all of the assets of the Employer, and the Plan shall continue in full force and effect.

12.8The titles of the Articles in the Plan are for convenience of reference only, and, in the event of any conflict, the text rather than such titles shall control.

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IN WITNESS WHEREOF, the Employer has caused its duly authorized officer to execute the Plan this 30th day of June, 2018.

VEONEER US, INC.
By:	Marilyn Byrd
Its:	Director of Compensation and Benefits

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EX-31.1

Exhibit 31.1

CERTIFICATION of

the Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jan Carlson, certify that:

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 27, 2018

/s/ Jan Carlson

Jan Carlson

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION of

the Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mathias Hermansson, certify that:

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 27, 2018

/s/ Mathias Hermansson

Mathias Hermansson

Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Veoneer, Inc. (the “Company”) for the period ended June 30, 2018, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan Carlson, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

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.

July 27, 2018

/s/ Jan Carlson

Jan Carlson

President and Chief Executive Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report on Form 10-Q of Veoneer, Inc. (the “Company”) for the period ended June 30, 2018, filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mathias Hermansson, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

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.

July 27, 2018

/s/ Mathias Hermansson

Mathias Hermansson

Chief Financial Officer

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 20, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	VNE
Entity Registrant Name	Veoneer, Inc.
Entity Central Index Key	0001733186
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		87,132,780

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net sales		$ 572	$ 579	$ 1,166	$ 1,162
Cost of sales		(460)	(459)	(943)	(929)
Gross profit		112	120	223	233
Selling, general and administrative expenses		(37)	(26)	(68)	(55)
Research, development and engineering expenses, net		(119)	(102)	(225)	(189)
Amortization of intangibles		(6)	(5)	(11)	(24)
Other income (expense), net		2	1	17	13
Operating loss		(48)	(12)	(64)	(22)
Loss from equity method investment		(16)	(8)	(30)	(8)
Interest income		1	0	1	0
Interest expense		(1)	0	(1)	0
Other non-operating items, net		1	1	1	0
Loss before income taxes		(63)	(19)	(93)	(30)
Income tax expense		(3)	(11)	(10)	(22)
Net loss		(66)	(30)	(103)	(52)
Less: Net loss attributable to non-controlling interest		(3)	(2)	(8)	(4)
Net loss attributable to controlling interest		$ (63)	$ (28)	$ (95)	$ (48)
Net loss per share - basic		$ (0.72)	$ (0.32)	$ (1.09)	$ (0.55)
Net loss per share - diluted		$ (0.72)	$ (0.32)	$ (1.09)	$ (0.55)
Weighted average number of shares outstanding		87,130	87,130	87,130	87,130
Weighted average number of shares outstanding, assuming dilution	[1]	87,130	87,130	87,130	87,130

[1] Shares in the diluted EPS calculation represent basic shares due to the net loss. The shares excluded from the calculation were 598,568 for the three and six months ended June 30, 2018 and 2017 because they are anti-dilutive.

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (66)	$ (30)	$ (103)	$ (52)
Other comprehensive income (loss), before tax:
Change in cumulative translation adjustment	(15)	5	(4)	15
Net change in cash flow hedges	1	(4)	1	(6)
Pension liability	(1)	0	(1)	0
Other comprehensive income (loss), before tax	(15)	1	(4)	9
Expense for taxes	0	0	0	0
Other comprehensive income (loss), net of tax	(15)	1	(4)	9
Comprehensive loss	(81)	(29)	(107)	(43)
Less: Comprehensive loss attributable to non-controlling interest	(5)	(1)	(7)	(2)
Comprehensive loss attributable to controlling interest	$ (76)	$ (28)	$ (100)	$ (41)

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 980	$ 0
Receivables, net	439	460
Inventories, net	157	154
Related party receivables	71
Prepaid expenses and contract assets	29	34
Other current assets	23
Total current assets	1,699	648
Property, plant and equipment, net	415	362
Equity method investment	134	98
Goodwill	291	292
Intangible assets, net	109	122
Deferred tax assets	30	30
Related party notes receivables		76
Other non-current assets	71	34
Total assets	2,749	1,662
Liabilities and equity
Accounts payable	279	323
Related party payables	47	5
Accrued expenses	216	195
Income tax payable	12	41
Other current liabilities	30	26
Total current liabilities	584	590
Related party long-term debt	13	62
Pension liability	19	14
Deferred tax liabilities	20	17
Other non-current liabilities	11	22
Total non-current liabilities	63	115
Commitments and contingencies
Equity
Common stock	87
Additional paid-in capital	1,915
Net Former Parent investment		844
Accumulated other comprehensive income (loss)	(13)	(8)
Total equity	1,989	836
Non-controlling interest	113	121
Total equity and non-controlling interest	2,102	957
Total liabilities, equity and non-controlling interest	$ 2,749	$ 1,662

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Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid In Capital	Net Former Parent Investment	Accumulated Other Comprehensive Income	Non-controlling Interests
Balance at beginning of period at Dec. 31, 2016	$ 1,090			$ 877	$ (29)	$ 242
Comprehensive Income (Loss):
Net loss	(52)			(48)		(4)
Foreign currency translation	15				13	2
Net change in cash flow hedges	(6)				(6)
Comprehensive loss	(43)			(48)	7	(2)
Net transfers from Former Parent	179			179
Balance at end of period at Jun. 30, 2017	1,226			1,008	(22)	240
Balance at beginning of period at Dec. 31, 2017	957			844	(8)	121
Comprehensive Income (Loss):
Net loss	(103)			(95)		(8)
Foreign currency translation	(4)				(5)	1
Net change in cash flow hedges	1				1
Pension liability	(1)				(1)
Reclassification of Former Parent's net investment and issuance of ordinary shares in connection with separation		$ 87	$ 1,915	(2,002)
Comprehensive loss	(107)	87	1,915	(2,097)	(5)	(7)
Net transfers from Former Parent	1,252			$ 1,253		(1)
Balance at end of period at Jun. 30, 2018	$ 2,102	$ 87	$ 1,915		$ (13)	$ 113

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Condensed Combined Statements of Cash Flow (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities
Net loss	$ (103)	$ (52)
Depreciation and amortization	55	64
Contingent consideration write-down	(14)	(13)
Other, net	3	(20)
Change in operating assets and liabilities:
Accounts payable	(62)	(3)
Related party receivables and payables, net	(31)	3
Income taxes	(29)	3
Accrued expenses	25	(11)
Other current assets and liabilities, net	(20)	6
Receivables, gross	14	(15)
Inventories, gross	(6)	7
Prepaid expenses and contract assets	4	(4)
Net cash used in operating activities	(164)	(35)
Investing activities
Net decrease (increase) in related party notes receivable	76	(7)
Capital expenditures	(71)	(50)
Equity method investment	(71)	(112)
Proceeds from sale of property, plant and equipment	4	5
Net cash used in investing activities	(62)	(164)
Financing activities
Cash provided at separation by Former Parent	980	0
Net transfers from Former Parent	275	179
(Decrease) / increase in related party long-term debt	(49)	20
Net cash provided by financing activities	1,206	199
Effect of exchange rate changes on cash and cash equivalents	0	0
Increase in cash and cash equivalents	980	0
Cash and cash equivalents at beginning of year	0	0
Cash and cash equivalents at end of year	$ 980	$ 0

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Basis of Presentation

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

OnJune29,2018(the “DistributionDate”),Veoneer,Inc.(“Veoneer”or“theCompany”)becameanindependent, publicly-tradedcompany 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)ofrecordasofcertainspecifieddatesreceivedoneshareofVeoneercommonstockoroneVeoneer SDR, respectively,foreveryoneshareofAutolivcommonstockorAutolivSDRheldasofacertaindate.TheSpin-Offwascompleted onJune29,2018inataxfreetransactionpursuanttoSection355oftheU.S.InternalRevenueCode.

OnJuly2,2018,VeoneercommonstockbeganregulartradingontheNewYorkStockExchange(“NYSE”)underthe ticker symbol “VNE” and Veoneer SDRs began trading on National Association of Securities Dealers (“NASDAQ”) Stockholmunderthesymbol“VNE-SDB”.AgreementsenteredintobetweenVeoneerandAutoliv in connection with the Spin-Offgoverntherelationship 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 theparties.

InadvanceoftheSpin-Off,Autolivcompletedaseriesofinternaltransactions,inwhichAutolivtransferreditsElectronics business to Veoneer. These transactions are referred to as the “internal reorganization”. The internal reorganization wascompletedonApril1,2018.

Veoneer has three product areas: Active Safety Products (that includes active safety sensors for advanced driver assistancesystems,highlyautomateddrivingsolutionsandautonomousdrivingsolutions),RestraintControlSystems, and BrakeSystems.

The accompanying Unaudited Condensed Consolidated Financial Statements for all periods presented have been preparedfromAutoliv’shistoricalaccountingrecordsandarepresentedonastand-alonebasisasiftheoperationshad beenconductedindependentlyfromAutoliv.Prior to the Spin-Off,Autoliv’snetinvestmentintheseoperations(Former Parentequity)is showninlieuofacontrollinginterest’sequityintheUnauditedCondensedConsolidatedFinancialStatements. Subsequent to the Spin-Off and the related distribution of shares, Veoneer Common stock, Additional paid-in capital and future income (losses) will be reflected in Retained earnings (Accumulated deficit). Accordingly, for periods prior to June 29, 2018, the Company’s financial statements are presented on a combined basis and for the periods subsequent to June 29, 2018, they are presented on a consolidated basis (all periods hereinafter are referred to as "Consolidated Financial Statements").

The Unaudited Condensed Consolidated Financial Statements include the historical operations, assets, and liabilities thatareconsideredtocomprisetheVeoneerbusiness.AlloftheallocationsandestimatesintheUnauditedCondensed Consolidated Financial Statements are based on assumptions that management of Autoliv and Veoneer believe are reasonable. However, the historical statements of operations, comprehensive loss, balance sheets, and cash flows of VeoneerincludedhereinmaynotbeindicativeofwhattheywouldhavebeenhadVeoneeractuallybeenastand-alone entityduringsuchperiods,noraretheynecessarilyindicativeofVeoneerfutureresults.

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 disclosuresconsiderednecessaryforafairpresentationhavebeenincluded.Forfurtherinformation,refertoVeoneer’s AuditedCombinedFinancialStatementsfortheyearendedDecember31,2017andcorrespondingnotes in the Company’s Information Statemnt included in the current report on Form 8-K filed with the SEC on July 2, 2018. Certain amounts in the prior year’s Condensed Combined Financial Statements and related footnotes thereto have been reclassified to conform to the current year presentation.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

A summary of significant policies is included in the current report on Form 8-K filed with the SEC on July 2, 2018. Discussion on cash and cash equivalents is included here as an additional significant policy which has become relevant beginning quarter ended June 30, 2018.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents.

New Accounting Standards

Adoption of New Accounting Standards

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company early adopted ASU 2018-02 as of January 1, 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Cuts and Jobs Act (the “Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost.

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the Unaudited Condensed Consolidated Statements of Operations separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Unaudited Condensed Consolidated Statements of Operations. The Company adopted ASU 2017-07 in the first quarter of 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented (see Note 10 Retirement Plans).

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Historical GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to equity as of the beginning of the period of adoption. The adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements.

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 net sales, net income, or balance sheet. The table below shows the adjustments made due to ASU 2014-09.

Balance Sheet (Dollars in millions)	Balance at December 31, 2017		Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Inventories, net	$	154	$	(5	)	$	149
Prepaid expenses and contract assets		34		7			41
Equity
Net Former Parent investment		844		1			845

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
Income Statement (Dollars in millions)	As Reported			Balances without adoption of ASC 606			Effect of Changes			As Reported			Balances without adoption of ASC 606			Effect of Changes
Net sales	$	572		$	573		$	(1	)	$	1,166		$	1,166		$	-
Cost of sales		(460	)		(461	)		1			(943	)		(943	)		-
Operating loss		(48	)		(48	)		-			(64	)		(64	)		-

	As of June 30, 2018
Balance Sheet (Dollars in millions)	As Reported		Balances without adoption of ASC 606		Effect of Changes
Assets
Inventories, net	$	157	$	162	$	(5	)
Prepaid expenses and other current assets		29		22		7
Equity
Additional paid-in capital		1,915		1,914		1

Accounting Standards Issued But Not Yet Adopted

In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted improvements to accounting for hedging activities. The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual period beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of ASU 2017-12 will not have a material impact on the Unaudited Condensed Consolidated Financial Statements since the Company closed its cash flow hedges in the first quarter of 2018.

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 its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016- 02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period Financial Statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. The Company’s implementation of this standard includes use of a project management framework that includes a dedicated lead project manager and a cross-functional project steering committee responsible for assessing the impact that the new standard will have on the Company’s accounting, financial statement presentation and disclosure. This team has begun its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. In addition, the Company has selected a new system to assist with lease accounting and has started the implementation. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard. The Company is continuing to consider control and process changes to capture lease data necessary to apply ASU 2016-02.

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Revenue

6 Months Ended

Jun. 30, 2018

Revenue From Contract With Customer [Abstract]

Revenue

3. Revenue

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is measured based on consideration specified in a contract with a customer, adjusted for any variable consideration (i.e. price concessions or annual price adjustments) and estimated at contract inception. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer.

In addition, from time to time, Veoneer may make payments to customers in connection with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments unless certain criteria are met warranting capitalization. If the payments are capitalized, the amounts are amortized as the related goods are transferred. As of June 30, 2018, and December 31, 2017, the Company capitalized $43 million and $23 million, respectively, in Other non-current assets related to capitalized payments. The Company assesses these amounts for impairment. There was no impairment.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales.

Nature of goods and services

The following is a description of principal activities from which the Company generates its revenue. The Company has two operating segments, Electronics and Brake Systems. Electronics includes all of electronics resources and expertise, restraint control systems and active safety products and Brake Systems provides brake control and actuation systems. The principal activities are essentially the same for each of the segments. Both of the segments generate revenue from the sale of production parts to original equipment manufacturers (“OEMs”). 

The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration, including any price concession or annual price adjustments, is based on their stand-alone selling prices for each of the products. The stand-alone selling prices are determined based on the cost-plus margin approach.

The Company recognizes revenue for production parts primarily at a point in time.

For production parts with revenue recognized at a point in time, the Company recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard commercial terms (typically F.O.B. shipping point). There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and a related asset and associated cost of goods sold and inventory. However, the financial impact of these contracts is immaterial considering the very short production cycles and limited inventory days on hand, which is typical for the automotive industry.

The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e. price concessions or annual price adjustments). Customers typically pay for the production parts based on customary business practices with payment terms averaging 30 days.

Disaggregation of revenue

In the following tables, revenue is disaggregated by primary region and products of revenue recognition.

Net Sales by Region

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	104	$	96	$	200	$	117	$	89		$	206
Americas		173		15		188		180		34			214
Europe		184		-		184		160		-			160
Total region sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Region

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	216	$	195	$	411	$	240	$	175		$	415
Americas		351		30		381		359		70			429
Europe		374		-		374		321		-			321
Total region sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total	$	941	$	225	$	1,166	$	920	$	242		$	1,162

Net Sales by Products

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	246	$	-	$	246	$	266	$	-		$	266
Active Safety products		215		-		215		191		-			191
Brake Systems		-		111		111		-		123			123
Total product sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total net sales	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Products

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	514	$	-	$	514	$	537	$	-		$	537
Active Safety products		427		-		427		383		-			383
Brake Systems		-		225		225		-		245			245
Total product sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total net sales	$	941	$	225	$	1,166	$	920	$	242		$	1,162

Contract balances

The following tables provide information about receivables and contract assets from contracts with customers.

The contract assets related to the Company’s rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. There have been no impairment losses recognized related to contract assets arising from the Company’s contracts with customers.

Contract Balances with Customers

(Dollars in millions)	As of
	June 30, 2018		December 31, 2017
Receivables, net	$	439	$	460
Contract assets1		7		-

¹ Included in prepaid expenses and contract assets

Receivables, net of allowance

(Dollars in millions)	As of
	June 30, 2018			December 31, 2017
Receivables	$	441		$	462
Allowance at beginning of period		(2	)		(4	)
Net decrease/(increase) of allowance		-			2
Allowance at end of period		(2	)		(2	)
Receivables, net of allowance	$	439		$	460

Changes in the contract asset balances during the period are as follows:

Change in Contract Balances with Customers1
(Dollars in millions)	Three months ended			Six months ended
	June 30, 2018			June 30, 2018
	Contract assets			Contract assets
Beginning balance	$	8		$	-
Increases due to cumulative catch up adjustment		-			7
Increases due to revenue recognized		7			15
Decreases due to transfer to receivables		(8	)		(15	)
Ending balance	$	7		$	7
1The contract asset is determined at each period end, this table reflects the rollforward of the period end balance.

Contract costs

As of June 30, 2018, the Company has capitalized $12 million of direct and incremental contract costs incurred in connection with obtaining a contract with a customer. These costs will be amortized as the related goods are transferred.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of sales. The amount of fulfillment costs was not material for any period presented.

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Business Combinations

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Business Combinations

4. Business Combinations

Business combinations generally take place to either gain key technology or strengthen Veoneer’s position in a certain geographical area or with a certain customer. The results of operations and cash flows from the Company’s acquisitions have been included in the Company’s Unaudited Condensed Consolidated Financial Statements prospectively from their date of acquisition.

Fotonic i Norden dp AB

On November 1, 2017, Autoliv completed the acquisition of all the shares in Fotonic i Norden dp AB (Fotonic), headquartered in Stockholm and Skellefteå in Sweden which were transferred to Veoneer in connection with the Spin-Off. The final acquisition date fair value of the total consideration transferred was $17 million, consisting of a $15 million cash payment and $2 million of deferred purchase consideration, payable at the 18 month anniversary of the closing date. The deferred purchase consideration reflects the holdback amount as stipulated in the share purchase agreement. The transaction has been accounted for as a business combination. The balance of the deferred purchase consideration remains unchanged at $2 million as of June 30, 2018.

Fotonic provides Lidar and Time of Flight camera expertise and the acquisition included 35 Lidar and Time of Flight engineering experts, in addition to defined tangible and intangible assets. The strength of the acquired competence is on the Lidar and Time of Flight camera hardware side which form a complement to Veoneer’s skillset in the Lidar software and algorithms area. Lidar technology is an enabling technology for Highly Automated Driving and considered the primary sensor by all system developers. Fotonic is being reported in the Electronics segment.

The net assets acquired as of the acquisition date amounted to $17 million. The final fair values of identifiable assets acquired consisted of intangible assets of $4 million and goodwill of $13 million. Acquired intangibles consisted of the fair value of background IP (patent & technical know-how). The useful life of the IP is five years and will be amortized on a straight-line basis. The recognized goodwill primary reflects the valuation of the acquired workforce of specialist engineers.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

5. 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.

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, 2018 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 as of June 30, 2018 and December 31, 2017, as follows:

	June 30, 2018
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	105	$	-	$	-
Total derivatives not designated as hedging instruments	$	105	$	-	$	-

	December 31, 2017
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives designated as hedging instruments
Foreign exchange forward contracts, less than    1 year (cash flow hedge)	$	67	$	-	$	1
Total derivatives designated as hedging instruments	$	67	$	-	$	1

Gains and losses on derivative financial instruments for the three and six months ended June 30, 2018 and 2017 are as follows:

	Three months ended
	June 30, 2018						June 30, 2017
	Foreignexchange forward contracts			Foreign exchange swaps			Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded into gain (loss)	$	-		$	(2	)	$	-		$	2
Recorded gains (loss) into    AOCI net of tax		-			-			(2	)		-
Less: reclassified from    AOCI into gain (loss)		(1	)		-			2			-
	$	1		$	(2	)	$	(4	)	$	2

	Six months ended
	June 30, 2018					June 30, 2017
	Foreign exchange forward contracts			Foreign exchange swaps		Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded gains (loss) into    AOCI net of tax	$	-		$	-	$	(3	)	$	-
Less: Reclassified from    AOCI gain (loss)		(1	)		-		3			-
	$	1		$	-	$	(6	)	$	-

Contingent consideration-The fair value of the contingent consideration relating 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 to 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, 2018 and continues to believe that the fair value of the contingent consideration is $0 million.

Items Measured at Fair Value on a Non-Recurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis. The fair value measurements are generally determined using unobservable inputs and are classified within Level 3 of the fair value hierarchy. These assets include long-lived assets, intangible assets and investments in affiliates, which may be written down to fair value as a result of impairment.The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.

The tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017.

	June 30, 2018				December 31, 2017
	Fair value measurements		Impairment		Fair value measurements		Impairment
(Dollars in millions)	Level 3		Losses		Level 3		Losses
Goodwill 1)	$	291	$	-	$	292	$	(234	)
Intangible assets, net 2)		109		-		122		(12	)

1) In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

2) In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

6. Income Taxes

The income tax provision for the three month and six month periods ended June 30, 2018 was $3 million and $10 million,respectively. The income tax provisionforthethreemonthandsixmonthperiodsendedJune30,2017was$11 millionand$22million,respectively.Theincometaxprovisionin2018 was primarily impacted by a reduction in the pre tax earnings of the Company’s profitable subsidiaries.

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 on the Company’s deferred tax balances as of the enactment date. PursuanttotheTaxMattersAgreemententered intowithAutolivinconnection with the Spin-Off, Autoliv is the primarily obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the CompanyisnotliableforanytransitiontaxesundertheAct.

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 US, Swedish, and Japanese operations and the Company’s joint venture in Japan.

TheCompanyhasreservesforincometaxesthatrepresenttheCompany’sbestestimateofthepotentialliabilityfortax 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 is part of the Autoliv group and were relieved through the Former Parent company investment. There were no material changes to the Company’s uncertain tax positions as of June 30, 2018. The Company files income tax returns in the United States federal jurisdiction, and variousstatesandnon-U.S.jurisdictions.Underlocaltaxlaw,aVeoneerentitymayhavebeenrequiredtofileitsincome taxreturnscombinedwithanAutoliventityuptoandincludingthedateoftheSpin-Offtransaction.Subsequenttothe Spin-Offtransaction,Veoneerwillfileitsincometaxreturnsonastand-alonebasis

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in tax expense.

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Inventory

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventory

7. Inventories

Inventories are stated at the lower of cost (principally FIFO) and net realizable value. The components of inventories were as follows:

	As of
	June 30,  2018			December 31, 2017
Raw materials	$	112		$	90
Work in progress		16			21
Finished products		52			70
Inventories	$	180		$	181
Inventory valuation reserve		(23	)		(27	)
Total inventories, net of reserve	$	157		$	154

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Equity Method Investment

6 Months Ended

Jun. 30, 2018

Equity Method Investments And Joint Ventures [Abstract]

Equity Method Investment

8. Equity Method Investment

As of June 30, 2018, the Company has one equity method investment.

On April 18, 2017, Autoliv and Volvo Cars completed the formation of their joint venture, Zenuity AB.Autoliv’s interest in Zenuity was transferred to Veoneer in connection with the Spin-Off. Autoliv made an initial cash contribution of SEK 1 billion (approximately $111 million as of April 18, 2017) and also contributed intellectual property, lab equipment and an assembled workforce. Veoneer and Volvo Cars each have a 50% ownership of Zenuity and neither entity has the ability to exert control over the joint venture, in form or in substance. Veoneer accounts for its investment in Zenuity under the equity method and the investment is shown in the line item Equity method investment in the Condensed Consolidated Balance Sheets. The contributed intellectual property, lab equipment, and an assembled workforce have been assessed to constitute a business as defined by ASU 2017-01, Business Combinations (Topic 805) – Clarifying the Definition of a Business. FASB ASC Topic 810, Consolidation states that when a group of assets that constitute a business is derecognized, the carrying amounts of the assets and liabilities are removed from the Condensed Consolidated Balance Sheets. The investor would recognize a gain or loss based on the difference between the sum of the fair value of any consideration received less the carrying amount of the group of assets and liabilities contributed at the date of the transaction. The equity value of Zenuity on the date of the closing of the transaction of approximately $250 million has been calculated using the discounted cash flow method of the income approach. Veoneer’s 50% share of the equity value, approximately $125 million, represents its investment in Zenuity, including its cash contribution at inception.

At the end of the first quarter of 2018, Veoneer contributed SEK 600 million (approximately $71 million) in cash (representing 50% of the total contribution, with the remainder made by Volvo Cars) into Zenuity to support its future operating cash flow needs.

The profit and loss attributed to the investment is shown in the line item Loss from equity method investment in the Unaudited Condensed Consolidated Statements of Operations. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2018 was $16 million and $30 million, respectively. Veoneer’s share of Zenuity’s loss for the three and six months ended June 30, 2017 was $8 million for both periods. As of June 30, 2018, the Company’s equity investment in Zenuity amounted to $134 million after consideration of foreign exchange movements.

Certain Unaudited Summarized Income Statement information of Zenuity, for the three and six months ended June 30, 2018 and 2017, is shown below:

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Net sales	$	2		$	1		$	3		$	1
Gross profit		-			-			-			-
Operating loss		(32	)		(16	)		(60	)		(16	)
Loss before income taxes		(32	)		(16	)		(60	)		(16	)
Net loss	$	(32	)	$	(16	)	$	(60	)	$	(16	)

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Accrued Expenses

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Accrued Expenses

9. Accrued Expenses

	As of
	June 30, 2018		December 31, 2017
Operating related accruals	$	53	$	55
Employee related accruals		63		57
Customer pricing accruals		56		36
Product related liabilities1		23		22
Other accruals		21		25
Total Accrued Expenses	$	216	$	195

¹ At June 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Retirement Plans

6 Months Ended

Jun. 30, 2018

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

10. Retirement Plans

Defined Benefit Pension Plans

The defined benefit pension plans impacting the Veoneer financial results include the following:

Existing Veoneer Plans which are comprised of plans in Japan, Canada, and France, Transferred Veoneer Plans whicharecomprisedofplansinGermany,India,Japan,andSouthKorea,andAutolivSponsoredPlanswhichare comprisedofplansinSwedenandtheU.S.

The combination of the Existing Veoneer Plans, Transferred Veoneer Plans, and Autoliv Sponsored Plans has resultedinatotalpensionexpenseof$2millionand$3millionforthethreeandsixmonthsendedJune30,2018, respectively.For thethreeandsixmonthsendedJune30,2017totalpensionexpensewas$2millionand$3million,respectively.

Existing Veoneer Plans

ThedefinedbenefitpensionplansforeligibleparticipantsinJapan,Canada,andFrancepriortotheSpin-Offcontinue toprovidepensionretirementbenefitstotheCompany’semployeessubsequenttotheSpin-Offtransaction.

TheCompany’snetperiodicbenefitcostsfortheExistingVeoneerPlansforthethreeandsixmonthsendedJune30, 2017and2018wereasfollows:

	Three Months Ended June 30					Six Months Ended June 30
	2018		2017			2018			2017
Service cost	$	1	$	1		$	2		$	2
Interest cost		1		1			1			1
Expected return on plan assets		-		(1	)		(1	)		(1	)
Net periodic benefit cost	$	2	$	1		$	2		$	2

The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as Other non-operating items, net in the Unaudited Condensed Consolidated Statements of Operations.

Transferred Veoneer Plans

Prior to the plan transferstoVeoneerlegalentitiesonApril1,2018,eligibleVeoneeremployeesparticipatedinthe followingAutoliv-sponsoredplans:

Country	Name of Defined Benefit Pans
Germany	Direct Pension Promises Plan
India	Gratuity Plan
Japan	Retirement Allowances Plan
	Defined Benefit Corporate Plan
South Korea	Severance Pay Plan (statutory plan)

OnApril1,2018,theassets,liabilities,andassociatedaccumulatedothercomprehensiveincome(loss)ofthepension 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 relatedtotheseplansinconnectionwiththeApril1,2018transfer.Planassetsinthetransferredplansareimmaterial. TheamountsrecordedforthetransferoftheVeoneerplanswerebasedontheassumptionsincorporatedintotheplan measurements as of December 31, 2017; however, management determined that there were no material changes in assumptions from December 31, 2017 to April 1, 2018. The plans will be re-measured in connection with the December 31, 2018 actuarialvaluation.

Changes in Benefit Obligations and Plans Assets

	As of
	June 30, 2018
Benefit obligation as of April 1, 2018	$	-
Service cost		-
Interest cost		-
Benefits paid		-
Obligation transferred in		6
Benefit obligation at end of the period	$	6
Fair value of plan assets as of April 1, 2018
Company contributions		-
Benefits paid		-
Plan assets transferred in		-
Fair value of plan assets at end of the period	$	-
Funded status recognized in the balance sheet	$	(6	)

Components of Net Periodic Benefit Cost Associated with the Defined Benefit Retirement Plan

TheallocatednetperiodicbenefitcostsrelatedtotransferredplansfromAutolivtoVeoneerwerelessthan$1million for the three months ended March 31, 2018. 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, 2017. Subsequent to the plan transfer on April 1, 2018, the components of net periodic benefit cost are less than $1 million for the three months ended June 30,2018.

Components of Accumulated other Comprehensive Income Before Tax

	As of
	June 30, 2018
Net actuarial loss (gain)	$	(1	)
Prior service cost (credit)		-
Total accumulated other comprehensive income    recognized in the balance sheet	$	(1	)

The service cost and amortization of prior service cost components are reported among employee compensation costs in the Unaudited Condensed Consolidated Statements of Operations. The remaining components (interest cost, expected return on plan assets and amortization of actuarial loss) are reported as other non-operating items, net in the Unaudited CondensedConsolidatedStatementsofOperations.

Autoliv Sponsored Plans

Priortocertainlegaldecisionsorplanamendments,VeoneeremployeesinSwedenandintheU.S.participatedina multiemployerplanwithAutoliv.Thelegalnameoftheplansareasfollow:

Country	Name of Defined Benefit Pans
Sweden	ITP plan
U.S.	Autoliv ASP, Inc. Pension Plan
	Autoliv ASP, Inc. Excess Pension Plan
	Autoliv ASP, Inc. Supplemental Pension Plan

On April 1, 2018, it was determined that the assets, liabilities, and associated accumulated other comprehensive income(loss)oftheSwedenplanforallVeoneeremployeesincludedintheSwedenplanwillremainwithAutolivand benefits will be paid out of that plan in the future upon retirement. The allocation to capture the Company’s specific definedbenefitplansexpenseandcontributionspriortotheplansamendmentforthethreemonthsendedMarch31, 2018werelessthan$1millionandwerelessthan$1millionforthethreeandsixmonthsendedJune30,2017.

On June 29, 2018, it was also determined that the assets, liabilities, and associated accumulated other comprehensive income (loss) of the U.S. plan for all Veoneer employees included in the U.S. plan will remain with Autoliv and benefits will be paid out of that plan in the future upon retirement. The Veoneer employees were considered to be participating in the Autoliv sponsored plan through June 29, 2018 at which date the plan was amended to freeze the accrual of benefits for any Veoneer employees. The U.S. plan resulted in less than $1 million ofdefinedbenefitplanexpenseandcontributionsmadeallocatedtoVeoneerforthethreeandsixmonthsendedJune 30,2018andlessthan$1millionofdefinedbenefitplanexpenseandcontributionsmadeallocatedtoVeoneerforthe threeandsixmonthsendedJune30,2017.

PriortotherespectivedatesabovefortheSwedenandtheU.S.plans,theVeoneeremployeeswereconsideredtobe participatingintheAutolivsponsoredplans.EffectiveApril1,2018fortheSwedenplanandJune29,2018forthe U.S.plantherespectivepartiesdeterminedthatVeoneerwouldnothaveadditionalexpenseorliabilityrelatedtoeach of the existingplans.

Postretirement Benefits other than Pension

InadditiontotheexistingbenefitobligationfromtheCanadianmedicalplan as disclosed in the Audited Combined Financial Statements for the year ended December 31, 2017,theCompanyalsoassumedlessthan$1 million in benefit obligations transferred from Autoliv’s U.S. medical plan as of June 29, 2018 in connection with the Spin-Off.Thenetperiodicbenefitcostandimpactonaccumulatedothercomprehensiveincomerelatedto the plans wereimmaterial.

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Stock Incentive Plan

6 Months Ended

Jun. 30, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Incentive Plan

11. Stock Incentive Plan

PriortotheSpin-Off,certaineligibleemployeesofVeoneerparticipatedinAutoliv,Inc.1997StockIncentivePlan(the Plan) and received Autoliv stock-based awards which include stock options, restricted stock units and performance shares. In connection with the Veoneer Spin-Off, each outstanding Autoliv stock-based award as of June 29, 2018 wasconvertedtostockawardshaving underlying shares ofbothAutolivandVeoneercommonstock.

The conversion that occurred on the Distribution Date of Veoneer was based on the following:

• Stock Option (SOs) - A number of SOs comprising 50% of the value of the outstanding SOs calculated immediatelypriortotheSpin-OfftransactioncontinuedtobeapplicabletoAutolivcommonstock.Anumberof SOscomprisingtheremaining50%percentofthepre-spinvaluewerereplacedwithoptionstoacquireshares of Veoneer commonstock.

• Restricted Stock Units (RSUs) - A number of RSUs comprising 50% of the value of the outstanding RSU calculatedimmediatelypriortotheSpin-OfftransactioncontinuedtobeapplicabletoAutolivcommonstock.A numberofRSUscomprisingtheremaining50%ofthepre-spinvaluewerereplacedwithRSUswithunderlying Veoneer commonstock.

• Performance Shares (PSs) - Outstanding PSs pre Spin-Off were converted to time-based RSUs and were treatedinthesamemannerasotheroutstandingRSUs(asdescribedabove)ontheDistributionDate. ThenumberofoutstandingPSspre Spin-Offwereconvertedbasedon:

1) The level of actual achievement of performance goals for each outstanding PSs for the period between the firstdayoftheperformanceperiodandDecember31,2017(the“PerformanceMeasurementDate”),referred toas“LevelofPerformance-to-Date”,and;

1) ThegreateroftheLevelofPerformance-to-Dateandestimatedtargetperformancelevel(i.e.,100%)forthe periodbetweenthePerformanceMeasurementDateandthelastdayoftheperformanceperiod.

In each case above, the conversion was intended to generally preserve the intrinsic value of the original award determinedasoftheDistributionDate.ThenumberofconvertedRSUsandSOsforAutolivandVeoneer wasbasedontheaverageofAutolivclosingstockpricesforthelast5dayspriortotheSpin-Offandtheaverageof closingstockpricesofAutolivandVeoneer,respectively,forthefirst5daysaftertheSpin-Off.

AsaresultoftheSpin-Offandtherelatedconversion,itwasdeterminedthatthestockbasedawardsweremodifiedin accordance with ASC 718, Compensation – Stock Compensation. As a result, the fair value of the RSUs and SOs immediately before and after the modification was assessed in order to determine if the modification resulted in any incremental compensation cost related to the awards, including consideration of the impact of conversion using the 5 day average. Based on the valuation performed, it was determined that the conversion did not result in any incrementalcompensationcostforanyoftheoutstandingawards.

With certain limitedexceptions, includingthefreezingofthePerformanceMeasurementDatetoDecember31,2017asnotedabove,the SOs and RSUs post Spin-Off are subject to the same terms and conditions (including with respect to vesting and expiration) that were applicable to such Autoliv stock-based awards immediately prior to the conversion and as describedintheAuditedCombinedFinancialStatementsfortheyearendedDecember31,2017andcorresponding notes included in the current report on Form 8-K filed with the SEC on July 2, 2018. There were no stock-based compensation expense related to SOs for these periods.

The Company recorded approximately $1 million and $2 million stock-based compensation expense related to RSUs and PSs for the three and six months ended June 30, 2018, respectively. During the three and six months ended June 30, 2017, the Company recorded $1 million and $2 million, respectively, of stock-based compensation expense related to RSUs and PSs.

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. 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 as well as 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.

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Contingent Liabilities

6 Months Ended

Jun. 30, 2018

Loss Contingency [Abstract]

Contingent Liabilities

12. 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 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. The table in Note 9 – Accrued Expenses summarizes the change in the balance sheet position of the product related liabilities.

Product Related Liabilities

TheCompanyrecordsliabilitiesforproductrelatedriskswhenprobableclaimsareidentifiedandwhenitispossibleto reasonably estimate costs. Provisions for warranty claims are estimated based on prior experience, likely changes in performanceofnewerproducts,andvolumeoftheproductssold.Theprovisionsarerecordedonanaccrual basis.

Thetablebelowsummarizesthechangeinthebalancesheetpositionoftheproductrelatedliabilities.

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Reserve at beginning of the period	$	23		$	22		$	22		$	30
Change in reserve		1			1			8			-
Cash payments		(1	)		(3	)		(7	)		(10	)
Translation difference		-			-			-			-
Reserve at end of the year	$	23		$	20		$	23		$	20

ForthethreeandsixmonthsendedJune30,2018andJune30,2017,provisionsandcashpaidprimarilyrelatetorecall and warranty related issues. The increase in the reserve balance as of June 30, 2018 compared to the prior year was mainlydue torecallrelatedissuesoffsetbythecashpaymentsforwarrantiesandproductliabilities.

AgreementsenteredintobetweenAutolivandVeoneerinconnectionwiththeSpin-OffprovideforAutolivtoindemnify VeoneerforcertainliabilitiesrelatedtoelectronicsproductsmanufacturedbeforeApril1,2018.AsofJune30,2018the indemnification asset amounting to $23 million representing substantially all the product related liabilities which is includedintheOthercurrentassetsinthe CondensedConsolidatedBalanceSheets. On May 18, 2018, the Company was informed by one of its customers that it would undertake a recall to proactively address a higher than usual warranty return ratio on one of the Company’s products. The estimated costs associated with this recall are approximately $6 million and were accrued as of June 30, 2018. A substantial portion of these costs are subject to indemnification by Autoliv.

Guarantees

Veoneer has certain guarantees in place and as of June 30, 2018 and December 31, 2017, directly guaranteeing $13 million of such obligations. 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.

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Loss Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Loss Per Share

13. Loss pershare

Basicloss pershareiscomputedbydividingnetlossfortheperiodbytheweightedaveragenumberofcommon stockoutstandingduringtheperiod.Dilutedloss pershareiscomputedbydividingnetlossfortheperiodbythe weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period.Thedilutiveeffectofoutstandingoptionsandequityincentiveawardsisreflectedindilutedloss pershare by application of the treasury stock method. The calculation of diluted loss per share excludes all anti-dilutive common shares. The following table sets forth the computation of basic and diluted loss per share for the three andsixmonthsendedJune30,2018and2017.

(U.S. dollars in millions, except per share amounts)	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Numerator:
Basic and diluted:
Net loss attributable to common shareholders	$	(63	)	$	(28	)	$	(95	)	$	(48	)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)		87.13			87.13			87.13			87.13
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	87.13			87.13			87.13			87.13
Basic loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)
Diluted loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)

¹ Shares in the diluted EPS calculation represent basic shares due to the net loss. The shares excluded from the calculation were 598,568 for the three and six months ended June 30, 2018 and 2017 because they are anti-dilutive.

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Segment Information

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Segment Information

14. Segment Information

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 chief operating decision maker to assess the performance of the individual operating segments and make decisions about resources to be allocated to the operating segments.

	Three Months Ended June 30						Six Months Ended June 30
(LOSS)/INCOME BEFORE INCOME TAXES	2018			2017			2018			2017
Electronics	$	(31	)	$	(7	)	$	(32	)	$	(9	)
Brake Systems		(4	)		(1	)		(12	)		(3	)
Segment operating (loss)/income		(35	)		(8	)		(44	)		(12	)
Corporate and other		(13	)		(4	)		(20	)		(10	)
Interest and other non-operating items, net		1			1			1			-
Loss from equity method investment		(16	)		(8	)		(30	)		(8	)
Loss before income taxes	$	(63	)	$	(19	)	$	(93	)	$	(30	)

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Relationship with Former Parent and Related Entities

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Relationship with Former Parent and Related Entities

15. Relationship with Former Parent and Related Entities

Historically, Veoneer has been managed and operated in the normal course of business with other affiliates of Autoliv. Accordingly, certain shared costs have been allocated to Veoneer and reflected as expenses in the stand-alone Unaudited Condensed Consolidated Financial Statements. Management of Autoliv and Veoneer consider the allocation methodologies used to be reasonable and appropriate reflections of historical expenses of Autoliv attributable to Veoneer for purposes of the stand-alone Financial Statements; however, the expenses reflected in the 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 equity in the Condensed Consolidated Balance Sheets as Net Former Parent investment and in the Unaudited Condensed Consolidated Statements of Cash Flows as a financing activity in Net transfers from Former Parent.

Transaction with other Autoliv Businesses

Throughout the periods covered by the Unaudited Condensed Consolidated Financial Statements, Veoneer sold finished goods to Autoliv. Related party sales to other Autoliv businesses amount to $21 million and $43 million for the three and six months ended June 30, 2018, respectively, and $18 million and $35 million for the three and six months ended June 30, 2017, respectively.

Related Party Balances

Amounts due to and due from related parties are summarized in the below table:

	As of
RELATED PARTY	June 30, 2018		December 31, 2017
Related party receivable	$	71	$	-
Related party notes receivable		-		76
Related party payables		47		5
Related party long-term debt		13		62

Related party receivables are mainly driven by Reseller Agreements put in place in connection with the Spin-Off. The Reseller Agreements are between Autoliv and Veoneer to facilitate the temporary arrangement of the sale of Veoneer products manufactured for certain customers for a limited period post Spin-Off. Autoliv will collect the customer payments and will remit the payments to Veoneer.

As of December 31, 2017, related party notes receivables relate to a long term loan between Veoneer and Autoliv entities, which was subsequently settled prior to the Spin-Off.

As of June 30, 2018, the related party payables mainly relate to an agreement between Veoneer-Nissin Brake Systems and various Autoliv companies.

A portion of the related party long-term debt is subject to a long term loan agreement that was settled on June 29, 2018. As of June 30, 2018, all related party debt agreements were settled or terminated, with the exception of a capital lease arrangement at Veoneer Nissin Brake Systems (a 51% owned subsidiary) of $13 million and $11 million as of June 30, 2018 and December 31, 2017, respectively. The capital lease is with Nissin Kogyo, the 49% owner of Veoneer Nissin Brake Systems.

Corporate Costs/Allocations

For the periods prior to April 1, 2018, the Unaudited Condensed Combined 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 services continued to be provided by Autoliv and directly charged to Veoneer. In addition, Veoneer personnel perform certain services for Autoliv, which is 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, which are operated by Autoliv. Cash receipts are 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 Spin-Off, Veoneer created its own corporate treasury operations.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. On the Distribution Date, Veoneer held approximately $1 billion of cash and cash equivalents.

New Accounting Standards

New Accounting Standards

Adoption of New Accounting Standards

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI), which allows a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments in ASU 2018-02 eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendments in ASU 2018-02 are effective for all entities for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company early adopted ASU 2018-02 as of January 1, 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”) provisions of the Tax Cuts and Jobs Act (the “Act”). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. In the first quarter of 2018, the Company elected to treat any potential GILTI inclusions as a period cost.

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07, Compensation-Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the service cost component to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the Unaudited Condensed Consolidated Statements of Operations separately from the service cost component and outside operating income. The amendments in ASU 2017-07 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2017-07 should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the Unaudited Condensed Consolidated Statements of Operations. The Company adopted ASU 2017-07 in the first quarter of 2018 and the adoption did not have a material impact on the Unaudited Condensed Consolidated Financial Statements for any periods presented (see Note 10 Retirement Plans).

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) – Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Historical GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. Consequently, the amendments in this ASU 2016-16 eliminate the exception for an intra-entity transfer of an asset other than inventory. Two common examples of assets included in the scope of ASU 2016-16 are intellectual property and property, plant, and equipment. The amendments in ASU 2016-16 are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. The amendments in ASU 2016-16 should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to equity as of the beginning of the period of adoption. The adoption of ASU 2016-16 effective January 1, 2018 did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements.

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 net sales, net income, or balance sheet. The table below shows the adjustments made due to ASU 2014-09.

Balance Sheet (Dollars in millions)	Balance at December 31, 2017		Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Inventories, net	$	154	$	(5	)	$	149
Prepaid expenses and contract assets		34		7			41
Equity
Net Former Parent investment		844		1			845

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
Income Statement (Dollars in millions)	As Reported			Balances without adoption of ASC 606			Effect of Changes			As Reported			Balances without adoption of ASC 606			Effect of Changes
Net sales	$	572		$	573		$	(1	)	$	1,166		$	1,166		$	-
Cost of sales		(460	)		(461	)		1			(943	)		(943	)		-
Operating loss		(48	)		(48	)		-			(64	)		(64	)		-

	As of June 30, 2018
Balance Sheet (Dollars in millions)	As Reported		Balances without adoption of ASC 606		Effect of Changes
Assets
Inventories, net	$	157	$	162	$	(5	)
Prepaid expenses and other current assets		29		22		7
Equity
Additional paid-in capital		1,915		1,914		1

Accounting Standards Issued But Not Yet Adopted

In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted improvements to accounting for hedging activities. The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual period beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. The Company believes that the pending adoption of ASU 2017-12 will not have a material impact on the Unaudited Condensed Consolidated Financial Statements since the Company closed its cash flow hedges in the first quarter of 2018.

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 its Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company intends to adopt ASU 2016- 02 in the annual period beginning January 1, 2019. The Company intends to apply the modified retrospective transition method and elect the transition option to use the effective date January 1, 2019, as the date of initial application. The Company will not adjust its comparative period Financial Statements for effects of the ASU 2016-02, or make the new required lease disclosures for periods before the effective date. The Company will recognize its cumulative effect transition adjustment as of the effective date. The Company’s implementation of this standard includes use of a project management framework that includes a dedicated lead project manager and a cross-functional project steering committee responsible for assessing the impact that the new standard will have on the Company’s accounting, financial statement presentation and disclosure. This team has begun its process to identify leasing arrangements and to compare its accounting policies and practices to the requirements of the new standard. In addition, the Company has selected a new system to assist with lease accounting and has started the implementation. The Company regularly enters into operating leases, for which current GAAP does not require recognition on the balance sheet. The Company anticipates that the adoption of ASU 2016-02 will primarily result in the recognition of most operating leases on its balance sheet resulting in an increase in reported right-of-use assets and leasing liabilities. The Company will continue to assess the impact from the new standard. The Company is continuing to consider control and process changes to capture lease data necessary to apply ASU 2016-02.

Financial Instruments

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.

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.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

ASU 2014-09

Adjustments Made Due to ASU 2014-09

The table below shows the adjustments made due to ASU 2014-09.

Balance Sheet (Dollars in millions)	Balance at December 31, 2017		Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets
Inventories, net	$	154	$	(5	)	$	149
Prepaid expenses and contract assets		34		7			41
Equity
Net Former Parent investment		844		1			845

	Three Months Ended June 30, 2018									Six Months Ended June 30, 2018
Income Statement (Dollars in millions)	As Reported			Balances without adoption of ASC 606			Effect of Changes			As Reported			Balances without adoption of ASC 606			Effect of Changes
Net sales	$	572		$	573		$	(1	)	$	1,166		$	1,166		$	-
Cost of sales		(460	)		(461	)		1			(943	)		(943	)		-
Operating loss		(48	)		(48	)		-			(64	)		(64	)		-

	As of June 30, 2018
Balance Sheet (Dollars in millions)	As Reported		Balances without adoption of ASC 606		Effect of Changes
Assets
Inventories, net	$	157	$	162	$	(5	)
Prepaid expenses and other current assets		29		22		7
Equity
Additional paid-in capital		1,915		1,914		1

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Revenue (Tables)

6 Months Ended

Jun. 30, 2018

Revenue From Contract With Customer [Abstract]

Revenue Disaggregated by Primary Region and Products of Revenue Recognition

In the following tables, revenue is disaggregated by primary region and products of revenue recognition.

Net Sales by Region

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	104	$	96	$	200	$	117	$	89		$	206
Americas		173		15		188		180		34			214
Europe		184		-		184		160		-			160
Total region sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Region

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Asia	$	216	$	195	$	411	$	240	$	175		$	415
Americas		351		30		381		359		70			429
Europe		374		-		374		321		-			321
Total region sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total	$	941	$	225	$	1,166	$	920	$	242		$	1,162

Net Sales by Products

(Dollars in millions)	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	246	$	-	$	246	$	266	$	-		$	266
Active Safety products		215		-		215		191		-			191
Brake Systems		-		111		111		-		123			123
Total product sales		461		111		572		457		123			580
Less: intercompany sales		-		-		-		-		(1	)		(1	)
Total net sales	$	461	$	111	$	572	$	457	$	122		$	579

Net Sales by Products

(Dollars in millions)	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
	Electronics		Brake Systems		Total		Electronics		Brake Systems			Total
Restraint Control Systems	$	514	$	-	$	514	$	537	$	-		$	537
Active Safety products		427		-		427		383		-			383
Brake Systems		-		225		225		-		245			245
Total product sales		941		225		1,166		920		245			1,165
Less: intercompany sales		-		-		-		-		(3	)		(3	)
Total net sales	$	941	$	225	$	1,166	$	920	$	242		$	1,162

Summary of Information about Receivables and Contract Assets from Contracts with Customers

The following tables provide information about receivables and contract assets from contracts with customers.

Contract Balances with Customers

(Dollars in millions)	As of
	June 30, 2018		December 31, 2017
Receivables, net	$	439	$	460
Contract assets1		7		-

¹ Included in prepaid expenses and contract assets

Receivables, net of allowance

(Dollars in millions)	As of
	June 30, 2018			December 31, 2017
Receivables	$	441		$	462
Allowance at beginning of period		(2	)		(4	)
Net decrease/(increase) of allowance		-			2
Allowance at end of period		(2	)		(2	)
Receivables, net of allowance	$	439		$	460

Summary of Changes in Contract Assets

Changes in the contract asset balances during the period are as follows:

Change in Contract Balances with Customers1
(Dollars in millions)	Three months ended			Six months ended
	June 30, 2018			June 30, 2018
	Contract assets			Contract assets
Beginning balance	$	8		$	-
Increases due to cumulative catch up adjustment		-			7
Increases due to revenue recognized		7			15
Decreases due to transfer to receivables		(8	)		(15	)
Ending balance	$	7		$	7
1The contract asset is determined at each period end, this table reflects the rollforward of the period end balance.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Derivative Financial Instruments Designated and Non-designated as Hedging Instruments

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 as of June 30, 2018 and December 31, 2017, as follows:

	June 30, 2018
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	105	$	-	$	-
Total derivatives not designated as hedging instruments	$	105	$	-	$	-

	December 31, 2017
			Fair Value Measurements
	Nominal Value		Derivative Asset (Other current/non current assets)		Derivative Liability (Other current/non current liabilities)
Derivatives designated as hedging instruments
Foreign exchange forward contracts, less than    1 year (cash flow hedge)	$	67	$	-	$	1
Total derivatives designated as hedging instruments	$	67	$	-	$	1

Gains and Losses on Derivative Financial Instruments

Gains and losses on derivative financial instruments for the three and six months ended June 30, 2018 and 2017 are as follows:

	Three months ended
	June 30, 2018						June 30, 2017
	Foreignexchange forward contracts			Foreign exchange swaps			Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded into gain (loss)	$	-		$	(2	)	$	-		$	2
Recorded gains (loss) into    AOCI net of tax		-			-			(2	)		-
Less: reclassified from    AOCI into gain (loss)		(1	)		-			2			-
	$	1		$	(2	)	$	(4	)	$	2

	Six months ended
	June 30, 2018					June 30, 2017
	Foreign exchange forward contracts			Foreign exchange swaps		Foreign exchange forward contracts			Foreign exchange swaps
Foreign currency risk - Cost    of sales:
Recorded gains (loss) into    AOCI net of tax	$	-		$	-	$	(3	)	$	-
Less: Reclassified from    AOCI gain (loss)		(1	)		-		3			-
	$	1		$	-	$	(6	)	$	-

Long-lived Assets Measured at Fair Value on Non-recurring Basis

The tables below present information about certain of the Company’s long-lived assets measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017.

	June 30, 2018				December 31, 2017
	Fair value measurements		Impairment		Fair value measurements		Impairment
(Dollars in millions)	Level 3		Losses		Level 3		Losses
Goodwill 1)	$	291	$	-	$	292	$	(234	)
Intangible assets, net 2)		109		-		122		(12	)

1) In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

2) In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Components of Inventories

The components of inventories were as follows:

	As of
	June 30,  2018			December 31, 2017
Raw materials	$	112		$	90
Work in progress		16			21
Finished products		52			70
Inventories	$	180		$	181
Inventory valuation reserve		(23	)		(27	)
Total inventories, net of reserve	$	157		$	154

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Equity Method Investment (Tables)

6 Months Ended

Jun. 30, 2018

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, 2018 and 2017, is shown below:

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Net sales	$	2		$	1		$	3		$	1
Gross profit		-			-			-			-
Operating loss		(32	)		(16	)		(60	)		(16	)
Loss before income taxes		(32	)		(16	)		(60	)		(16	)
Net loss	$	(32	)	$	(16	)	$	(60	)	$	(16	)

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Payables And Accruals [Abstract]

Summary of Accrued Expenses

	As of
	June 30, 2018		December 31, 2017
Operating related accruals	$	53	$	55
Employee related accruals		63		57
Customer pricing accruals		56		36
Product related liabilities1		23		22
Other accruals		21		25
Total Accrued Expenses	$	216	$	195

¹ At June 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Retirement Plans (Tables) - Pension Plans, Defined Benefit

6 Months Ended

Jun. 30, 2018

Schedule of Components of Net Periodic Benefit Cost

TheCompany’snetperiodicbenefitcostsfortheExistingVeoneerPlansforthethreeandsixmonthsendedJune30, 2017and2018wereasfollows:

	Three Months Ended June 30					Six Months Ended June 30
	2018		2017			2018			2017
Service cost	$	1	$	1		$	2		$	2
Interest cost		1		1			1			1
Expected return on plan assets		-		(1	)		(1	)		(1	)
Net periodic benefit cost	$	2	$	1		$	2		$	2

Schedule of Changes in Benefit Obligations and Plan Assets

Changes in Benefit Obligations and Plans Assets

	As of
	June 30, 2018
Benefit obligation as of April 1, 2018	$	-
Service cost		-
Interest cost		-
Benefits paid		-
Obligation transferred in		6
Benefit obligation at end of the period	$	6
Fair value of plan assets as of April 1, 2018
Company contributions		-
Benefits paid		-
Plan assets transferred in		-
Fair value of plan assets at end of the period	$	-
Funded status recognized in the balance sheet	$	(6	)

Schedule of Components of Accumulated Other Comprehensive Income Before Tax

Components of Accumulated other Comprehensive Income Before Tax

	As of
	June 30, 2018
Net actuarial loss (gain)	$	(1	)
Prior service cost (credit)		-
Total accumulated other comprehensive income    recognized in the balance sheet	$	(1	)

Transferred Veoneer Plans

Schedule of Legal Name of the Plans

Prior to the plan transferstoVeoneerlegalentitiesonApril1,2018,eligibleVeoneeremployeesparticipatedinthe followingAutoliv-sponsoredplans:

Country	Name of Defined Benefit Pans
Germany	Direct Pension Promises Plan
India	Gratuity Plan
Japan	Retirement Allowances Plan
	Defined Benefit Corporate Plan
South Korea	Severance Pay Plan (statutory plan)

Autoliv Sponsored Plans

Schedule of Legal Name of the Plans

Priortocertainlegaldecisionsorplanamendments,VeoneeremployeesinSwedenandintheU.S.participatedina multiemployerplanwithAutoliv.Thelegalnameoftheplansareasfollow:

Country	Name of Defined Benefit Pans
Sweden	ITP plan
U.S.	Autoliv ASP, Inc. Pension Plan
	Autoliv ASP, Inc. Excess Pension Plan
	Autoliv ASP, Inc. Supplemental Pension Plan

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Contingent Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Loss Contingency [Abstract]

Schedule of Change in Balance Sheet Position of Product Related Liabilities

Thetablebelowsummarizesthechangeinthebalancesheetpositionoftheproductrelatedliabilities.

	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Reserve at beginning of the period	$	23		$	22		$	22		$	30
Change in reserve		1			1			8			-
Cash payments		(1	)		(3	)		(7	)		(10	)
Translation difference		-			-			-			-
Reserve at end of the year	$	23		$	20		$	23		$	20

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Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2018

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 andsixmonthsendedJune30,2018and2017.

(U.S. dollars in millions, except per share amounts)	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
Numerator:
Basic and diluted:
Net loss attributable to common shareholders	$	(63	)	$	(28	)	$	(95	)	$	(48	)
Denominator:
Basic: Weighted average number of shares outstanding (in millions)		87.13			87.13			87.13			87.13
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)1	87.13			87.13			87.13			87.13
Basic loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)
Diluted loss per share	$	(0.72	)	$	(0.32	)	$	(1.09	)	$	(0.55	)

¹ Shares in the diluted EPS calculation represent basic shares due to the net loss. The shares excluded from the calculation were 598,568 for the three and six months ended June 30, 2018 and 2017 because they are anti-dilutive.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting [Abstract]

Schedule of (Loss)/Income Before Income Taxes

	Three Months Ended June 30						Six Months Ended June 30
(LOSS)/INCOME BEFORE INCOME TAXES	2018			2017			2018			2017
Electronics	$	(31	)	$	(7	)	$	(32	)	$	(9	)
Brake Systems		(4	)		(1	)		(12	)		(3	)
Segment operating (loss)/income		(35	)		(8	)		(44	)		(12	)
Corporate and other		(13	)		(4	)		(20	)		(10	)
Interest and other non-operating items, net		1			1			1			-
Loss from equity method investment		(16	)		(8	)		(30	)		(8	)
Loss before income taxes	$	(63	)	$	(19	)	$	(93	)	$	(30	)

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Relationship with Former Parent and Related Entities (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Summary of Amount Due to and from Related Parties

Amounts due to and due from related parties are summarized in the below table:

	As of
RELATED PARTY	June 30, 2018		December 31, 2017
Related party receivable	$	71	$	-
Related party notes receivable		-		76
Related party payables		47		5
Related party long-term debt		13		62

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Basis of Presentation - Additional Information (Details) - Spin-Off - Autoliv		6 Months Ended
	Jun. 29, 2018	Jun. 30, 2018
Basis Of Presentation [Line Items]
Distribution percentage of outstanding common stock in spinoff transaction	100.00%
Stock holders equity spin off description		Each Autoliv stockholder and holder of Autoliv’s Swedish Depository Receipts (SDRs) of record as of certain specified dates received one share of Veoneer common stock or one Veoneer SDR, respectively, for every one share of Autoliv common stock or Autoliv SDR held as of a certain date.
Spin-Off completion date	Jun. 29, 2018
SDR
Basis Of Presentation [Line Items]
Spin off conversion ratio	1
Common Stock
Basis Of Presentation [Line Items]
Spin off conversion ratio	1

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2018	Jun. 29, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 980	$ 1,000	$ 0	$ 0	$ 0

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Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2014-09 Impact on Balance Sheet (Details) - USD ($) $ in Millions	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Assets
Inventories, net	$ 157		$ 154
Prepaid expenses and contract assets	29		34
Equity
Net Former Parent investment			$ 844
Additional paid-in capital	1,915
ASU 2014-09
Assets
Inventories, net		$ 149
Prepaid expenses and contract assets		41
Equity
Net Former Parent investment		845
Adjustments due to ASU 2014-09 / Effect of Changes | ASU 2014-09
Assets
Inventories, net	(5)	(5)
Prepaid expenses and contract assets	7	7
Equity
Net Former Parent investment		$ 1
Additional paid-in capital	1
Balances without adoption of ASC 606 | ASU 2014-09
Assets
Inventories, net	162
Prepaid expenses and contract assets	22
Equity
Additional paid-in capital	$ 1,914

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Summary of Significant Accounting Policies - Adjustments Made Due to ASU 2014-09 Impact on Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Net sales	$ 572	$ 579	$ 1,166	$ 1,162
Cost of sales	(460)	(459)	(943)	(929)
Operating loss	(48)	$ (12)	(64)	$ (22)
Balances without adoption of ASC 606 | ASU 2014-09
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Net sales	573		1,166
Cost of sales	(461)		(943)
Operating loss	(48)		$ (64)
Adjustments due to ASU 2014-09 / Effect of Changes | ASU 2014-09
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Net sales	(1)
Cost of sales	$ 1

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Revenue - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($) Segment	Dec. 31, 2017 USD ($)
Capitalized Contract Cost [Line Items]
Capitalized payments	$ 12,000,000
Impairment losses recognized related to contract assets	$ 0	$ 0
Number of operating segments | Segment	2
Production parts average payment terms	30 days
Other Non-current Assets
Capitalized Contract Cost [Line Items]
Capitalized payments	$ 43,000,000	$ 23,000,000

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Revenue Disaggregated by Primary Region and Products of Revenue Recognition (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation Of Revenue [Line Items]
Net sales	$ 572	$ 579	$ 1,166	$ 1,162
Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	572	580	1,166	1,165
Operating Segments | Restraint Control Systems
Disaggregation Of Revenue [Line Items]
Net sales	246	266	514	537
Operating Segments | Active Safety Products
Disaggregation Of Revenue [Line Items]
Net sales	215	191	427	383
Operating Segments | Brake Systems
Disaggregation Of Revenue [Line Items]
Net sales	111	123	225	245
Intersegment Elimination
Disaggregation Of Revenue [Line Items]
Net sales		(1)		(3)
Electronics
Disaggregation Of Revenue [Line Items]
Net sales	461	457	941	920
Electronics | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	461	457	941	920
Electronics | Operating Segments | Restraint Control Systems
Disaggregation Of Revenue [Line Items]
Net sales	246	266	514	537
Electronics | Operating Segments | Active Safety Products
Disaggregation Of Revenue [Line Items]
Net sales	215	191	427	383
Brake Systems
Disaggregation Of Revenue [Line Items]
Net sales	111	122	225	242
Brake Systems | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	111	123	225	245
Brake Systems | Operating Segments | Brake Systems
Disaggregation Of Revenue [Line Items]
Net sales	111	123	225	245
Brake Systems | Intersegment Elimination
Disaggregation Of Revenue [Line Items]
Net sales		(1)		(3)
Asia | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	200	206	411	415
Asia | Electronics | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	104	117	216	240
Asia | Brake Systems | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	96	89	195	175
Americas | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	188	214	381	429
Americas | Electronics | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	173	180	351	359
Americas | Brake Systems | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	15	34	30	70
Europe | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	184	160	374	321
Europe | Electronics | Operating Segments
Disaggregation Of Revenue [Line Items]
Net sales	$ 184	$ 160	$ 374	$ 321

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Summary of Information about Contract Balances with Customers (Detail) - USD ($) $ in Millions		Jun. 30, 2018		Mar. 31, 2018	Dec. 31, 2017
Contract With Customer Asset And Liability [Abstract]
Receivables, net		$ 439			$ 460
Contract assets	[2]	$ 7	[1]	$ 8

[1] Included in prepaid expenses and contract assets

[2] The contract asset is determined at each period end, this table reflects the rollforward of the period end balance.

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Summary of Information about Receivables, Net of Allowance (Detail) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Contract With Customer Asset And Liability [Abstract]
Receivables	$ 441	$ 462
Allowance at beginning of period	(2)	(4)
Net decrease/(increase) of allowance	0	2
Allowance at end of period	(2)	(2)
Receivables, net of allowance	$ 439	$ 460

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Summary of Changes in Contract Assets (Detail) - USD ($) $ in Millions		3 Months Ended	6 Months Ended
		Jun. 30, 2018	Jun. 30, 2018
Contract assets
Beginning balance	[1]	$ 8
Increases due to cumulative catch up adjustment	[1]		$ 7
Increases due to revenue recognized	[1]	7	15
Decreases due to transfer to receivables	[1]	(8)	(15)
Ending balance	[1],[2]	$ 7	$ 7

[1] The contract asset is determined at each period end, this table reflects the rollforward of the period end balance.

[2] Included in prepaid expenses and contract assets

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Business Combinations - Additional Information (Details) $ in Millions		6 Months Ended
	Nov. 01, 2017 USD ($) Engineering_Expert	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Goodwill		$ 291	$ 292
Fotonic i Norden dp AB
Business Acquisition [Line Items]
Business combination, consideration transferred	$ 17
Consideration transferred in cash	15
Deferred purchase consideration	$ 2	$ 2
Deferred purchase consideration period	18 months
Number of Lidar and Time of Flight engineering experts acquired | Engineering_Expert	35
Net assets acquired	$ 17
Business combination, intangible assets	4
Goodwill	$ 13
Fotonic i Norden dp AB | IP
Business Acquisition [Line Items]
Intangible assets remaining useful life	5 years
Intangible assets, amortization method		straight-line basis

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Fair Value Measurements - Additional Information (Details) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Jun. 30, 2018 USD ($) Contract	Dec. 31, 2017 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of earn-out liability		$ 14		$ 14
Other operating income from earn out liability adjustment	$ 14	$ 13
Fair value of contingent consideration			$ 0
Foreign Exchange Swaps | Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Maturity period of swap contracts			6 months
Foreign Exchange Swaps | Maturity Beyond Six Months
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of foreign currency derivatives held | Contract			0

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Fair Value Measurements - Derivative Financial Instruments Designated and Non-designated as Hedging Instruments (Details) - Fair Value, Measurements, Recurring - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Derivative Not Designated as Hedging Instruments
Derivatives Fair Value [Line Items]
Nominal Value	$ 105,000,000
Derivative Not Designated as Hedging Instruments | Foreign Exchange Swaps | Less Than Six Months
Derivatives Fair Value [Line Items]
Nominal Value	$ 105,000,000
Derivatives Designated as Hedging Instruments
Derivatives Fair Value [Line Items]
Nominal Value		$ 67,000,000
Derivatives Designated as Hedging Instruments | Other Current and Non Current Liabilities
Derivatives Fair Value [Line Items]
Derivative Liability		1,000,000
Derivatives Designated as Hedging Instruments | Foreign Exchange Forward | Less Than One Year | Cash Flow Hedging
Derivatives Fair Value [Line Items]
Nominal Value		67,000,000
Derivatives Designated as Hedging Instruments | Foreign Exchange Forward | Less Than One Year | Other Current and Non Current Liabilities | Cash Flow Hedging
Derivatives Fair Value [Line Items]
Derivative Liability		$ 1,000,000

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Fair Value Measurements - Gains and Losses on Derivative Financial Instruments (Details) - Fair Value, Measurements, Recurring - Cost of Sales - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Foreign Exchange Forward Contracts
Derivatives Fair Value [Line Items]
Recorded gains (loss) into AOCI net of tax		$ (2)		$ (3)
Less: reclassified from AOCI into gain (loss)	$ (1)	2	$ (1)	3
Gains and losses on derivative financial instruments	1	(4)	$ 1	$ (6)
Foreign Exchange Swaps
Derivatives Fair Value [Line Items]
Recorded into gain (loss)	(2)	2
Gains and losses on derivative financial instruments	$ (2)	$ 2

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Fair Value Measurements - Long-lived Assets Measured at Fair Value on Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2017	Jun. 30, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Goodwill, Impairment losses	[1]	$ (234)
Intangible assets, net, Impairment losses	[2]	(12)
Fair Value Measurements Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Goodwill, Fair value measurement	[1]	292	$ 291
Intangible assets, net, Fair value measurement	[2]	$ 122	$ 109

[1] In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

[2] In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

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Fair Value Measurements - Long-lived Assets Measured at Fair Value on Non-recurring Basis (Parenthetical) (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Goodwill impairment loss	[1]			$ 234
Impairment charge to contract with OEM customer	[2]			$ 12
M/A-COM Auto Solutions Business | Customer Contract
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impairment charge to contract with OEM customer			$ 12
Autoliv-Nissin Brakes Systems
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Goodwill impairment loss		$ 234

[1] In the fourth quarter of 2017, the Company recognized an impairment charge of the full goodwill related to ANBS, resulting in an impairment loss of $234 million, which was included in earnings for the period. The primary driver of the goodwill impairment was due to the lower expected long-term operating cash flow performance of the business unit as of the measurement date. The remaining goodwill balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

[2] In the first quarter of 2017, the Company recognized an impairment charge to amortization of intangibles of $12 million related to a contract with an OEM customer of M/A-COM products, which was included in earnings for the period. As of December 31, 2017, the intangible value related to this customer contract was fully amortized. The remaining intangibles balance as of June 30, 2018 and December 31, 2017 was not measured at fair value on a nonrecurring basis as impairment indicators did not exist.

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax provision	$ 3	$ 11	$ 10	$ 22
Income tax expense at federal statutory rate			21.00%		35.00%

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Inventories - Components of Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 112	$ 90
Work in progress	16	21
Finished products	52	70
Inventories	180	181
Inventory valuation reserve	(23)	(27)
Total inventories, net of reserve	$ 157	$ 154

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Equity Method Investment - Additional Information (Details) kr in Millions, $ in Millions			3 Months Ended				6 Months Ended
	Apr. 18, 2017 USD ($)	Apr. 18, 2017 SEK (kr)	Jun. 30, 2018 USD ($) Investment	Mar. 31, 2018 USD ($)	Mar. 31, 2018 SEK (kr)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Investment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Schedule Of Equity Method Investments [Line Items]
Number of equity method investments | Investment			1				1
Loss from equity method investment			$ (16)			$ (8)	$ (30)	$ (8)
Equity investments after consideration of foreign exchange movements			134				134		$ 98
Zenuity
Schedule Of Equity Method Investments [Line Items]
Cash contribution to joint venture				$ 71	kr 600
Ownership percentage in joint venture	50.00%			50.00%	50.00%
Equity value of joint venture	$ 250
Share in equity value of joint venture	$ 125
Loss from equity method investment			(16)			$ (8)	(30)	$ (8)
Equity investments after consideration of foreign exchange movements			$ 134				$ 134
Zenuity | Volvo Cars
Schedule Of Equity Method Investments [Line Items]
Ownership percentage in joint venture	50.00%
Zenuity | Autoliv
Schedule Of Equity Method Investments [Line Items]
Cash contribution to joint venture	$ 111	kr 1,000

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Summary of Unaudited Income Statement Information (Details) - Zenuity - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Schedule Of Equity Method Investments [Line Items]
Net sales	$ 2	$ 1	$ 3	$ 1
Operating loss	(32)	(16)	(60)	(16)
Loss before income taxes	(32)	(16)	(60)	(16)
Net loss	$ (32)	$ (16)	$ (60)	$ (16)

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Summary of Accrued Expenses (Details) - USD ($) $ in Millions		Jun. 30, 2018	Dec. 31, 2017
Payables And Accruals [Abstract]
Operating related accruals		$ 53	$ 55
Employee related accruals		63	57
Customer pricing accruals		56	36
Product related liabilities	[1]	23	22
Other accruals		21	25
Total Accrued Expenses		$ 216	$ 195

[1] At June 30, 2018, virtually all product related liabilities were indemnifiable losses subject to indemnification by Autoliv and an indemnification asset is included in Other current assets.

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Retirement Plans - Additional Information (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jun. 29, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Apr. 01, 2018
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Pension expense		$ 2,000,000	$ 2,000,000	$ 3,000,000	$ 3,000,000
Benefit plan obligations		6,000,000		6,000,000
Pension Plans, Defined Benefit | Maximum
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan assets transferred Plans		1,000,000
Defined benefit plan net periodic benefit cost		1,000,000	1,000,000		1,000,000
Pension Plans, Defined Benefit | Transferred Veoneer Plans
Defined Benefit Plan Disclosure [Line Items]
Benefit plan obligations						$ 6,000,000
Pension Plans, Defined Benefit | Autoliv Sponsored Plans | Maximum
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan expense and contributions prior to the plans amendment		1,000,000	1,000,000		1,000,000
Pension Plans, Defined Benefit | Autoliv Sponsored Plans | Maximum | U.S.
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan expense		$ 1,000,000	$ 1,000,000	$ 1,000,000	$ 1,000,000
Postretirement Benefits Other than Pension | Canadian Medical Plan | Maximum
Defined Benefit Plan Disclosure [Line Items]
Defined benefit pension plan expense	$ 1,000,000

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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, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1	$ 1	$ 2	$ 2
Interest cost	1	1	1	1
Expected return on plan assets		(1)	(1)	(1)
Net periodic benefit cost	$ 2	$ 1	$ 2	$ 2

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Retirement Plans - Schedule of Legal Name of the Plans (Details) - Pension Plans, Defined Benefit	6 Months Ended
	Jun. 30, 2018
Transferred Veoneer Plans | Germany
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	Direct Pension Promises Plan
Transferred Veoneer Plans | India
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	Gratuity Plan
Transferred Veoneer Plans | Japan
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	Retirement Allowances Plan, Defined Benefit Corporate Plan
Transferred Veoneer Plans | South Korea
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	Severance Pay Plan (statutory plan)
Autoliv Sponsored Plans | Sweden
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	ITP plan
Autoliv Sponsored Plans | U.S.
Defined Benefit Plan Disclosure [Line Items]
Name of Defined Benefit Pans	Autoliv ASP, Inc. Pension Plan, Autoliv ASP, Inc. Excess Pension Plan and Autoliv ASP, Inc. Supplemental Pension Plan

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Retirement Plans - Schedule of Changes in Benefit Obligations and Plan Assets (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2018
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
Obligation transferred in	$ 6
Benefit obligation at end of the period	6
Funded status recognized in the balance sheet	$ (6)

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Retirement Plans - Schedule of Components of Accumulated Other Comprehensive Income Before Tax (Details) - Pension Plans, Defined Benefit $ in Millions	Jun. 30, 2018 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Net actuarial loss (gain)	$ (1)
Total accumulated other comprehensive income recognized in the balance sheet	$ (1)

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Stock Incentive Plan - Additional Information (Details) - USD ($)		3 Months Ended		6 Months Ended
	Jun. 29, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
2018 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized for grant of common stock for future equity awards	3,000,000
Number of shares used for conversion of outstanding grants	1,000,000
Stock Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense				$ 0
RSUs and PSs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense		$ 1,000,000	$ 1,000,000	$ 2,000,000	$ 2,000,000
Spin-Off
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options prior to Spin-Off transaction to be continued to be applicable to Autoliv common stock	50.00%
Percentage of pre-spin value of stock options to be replaced with options to acquire shares of Veoneer common stock	50.00%
Percentage of RSUs prior to Spin-Off to be continued to applicable to Autoliv common stock	50.00%
Percentage of pre-spin value of RSUs to be replaced with RSUs with underlying Veoneer common stock	50.00%
Estimated target performance level	100.00%
Period prior to Spin-Off for average of Autoliv closing stock prices used for conversion of RSUs and SOs	5 days
Period after Spin-Off for average of closing stock prices of Autoliv and Veoneer used for conversion of RSUs and SOs	5 days
Spin-Off | 2018 Stock Incentive Plan | Autoliv | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of additional shares authorized to be used for conversion of outstanding Autoliv stock awards	1,500,000

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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, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Product Warranties Disclosures [Abstract]
Reserve at beginning of the period	$ 23	$ 22	$ 22	$ 30
Change in reserve	1	1	8
Cash payments	(1)	(3)	(7)	(10)
Reserve at end of the year	$ 23	$ 20	$ 23	$ 20

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Contingent Liabilities - Additional Information (Details) - USD ($) $ in Millions	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Loss Contingencies [Line Items]
Estimated cost accrued		$ 6
Other current assets	$ 23
Guarantee obligations	13		$ 13
Indemnification Asset
Loss Contingencies [Line Items]
Other current assets	$ 23

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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, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Basic and diluted:
Net loss attributable to common shareholders		$ (63)	$ (28)	$ (95)	$ (48)
Denominator:
Basic: Weighted average number of shares outstanding		87,130	87,130	87,130	87,130
Diluted: Weighted-average number of shares outstanding, assuming dilution	[1]	87,130	87,130	87,130	87,130
Basic loss per share		$ (0.72)	$ (0.32)	$ (1.09)	$ (0.55)
Diluted loss per share		$ (0.72)	$ (0.32)	$ (1.09)	$ (0.55)

[1] Shares in the diluted EPS calculation represent basic shares due to the net loss. The shares excluded from the calculation were 598,568 for the three and six months ended June 30, 2018 and 2017 because they are anti-dilutive.

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Loss Per Share - Computation of Basic and Diluted Earnings Per Share (Parenthetical) (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Shares excluded from calculation	598,568	598,568	598,568	598,568

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Segment Information - Additional Information (Details)	6 Months Ended
	Jun. 30, 2018 Segment
Segment Reporting [Abstract]
Number of operating segments	2

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Segment Information - Schedule of (Loss)/Income Before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Segment operating (loss)/income	$ (48)	$ (12)	$ (64)	$ (22)
Interest and other non-operating items, net	1	1	1
Loss from equity method investment	(16)	(8)	(30)	(8)
Loss before income taxes	(63)	(19)	(93)	(30)
Operating Segments
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Segment operating (loss)/income	(35)	(8)	(44)	(12)
Electronics | Operating Segments
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Segment operating (loss)/income	(31)	(7)	(32)	(9)
Brake Systems | Operating Segments
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Segment operating (loss)/income	(4)	(1)	(12)	(3)
Corporate and other
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Segment operating (loss)/income	$ (13)	$ (4)	$ (20)	$ (10)

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Relationship with Former Parent and Related Entities - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 29, 2018	Dec. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Cash and cash equivalents	$ 980	$ 0	$ 980	$ 0	$ 1,000	$ 0	$ 0
Veoneer Nissin Brakes Systems
Related Party Transaction [Line Items]
Ownership percentage by parent	51.00%		51.00%
Capital lease arrangements	$ 13		$ 13			$ 11
Nissin Kogyo
Related Party Transaction [Line Items]
Minority ownership Percentage	49.00%		49.00%
Autoliv
Related Party Transaction [Line Items]
Revenue from related parties	$ 21	$ 18	$ 43	$ 35

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Relationship with Former Parent and Related Entities - Summary of Amount Due to and from Related Parties (Details) - USD ($) $ in Millions	Jun. 30, 2018	Dec. 31, 2017
Related Party Transactions [Abstract]
Related party receivable	$ 71
Related party notes receivable		$ 76
Related party payables	47	5
Related party long-term debt	$ 13	$ 62