As discussed in Note 1. Basis of Presentation above, on June 29, 2018, the Company completed the spin-off of Veoneer and the requirements for the presentation of Veoneer as a discontinued operation were met on that date. Accordingly, Veoneer’s historical financial results are reflected in the Company’s Consolidated Financial Statements as discontinued operations. The Company did not allocate any general corporate overhead or interest expense to discontinued operations.

The financial results of Veoneer are presented as loss from discontinued operations, net of income taxes in the Consolidated Statements of Income. The following table presents the financial results of Veoneer (dollars in millions). 2018 includes six months of discontinued operations.

	Years ended December 31
	2018			2017			2016
Net sales	$	1,122.9		$	2,245.8		$	2,152.0
Cost of sales		(896.4	)		(1,776.5	)		(1,723.0	)
Gross profit		226.5			469.3			429.0
Selling, general and administrative expenses		(59.7	)		(83.1	)		(81.7	)
Research, development and engineering expenses, net		(224.0	)		(370.3	)		(293.7	)
Goodwill, Impairment charge		—			(234.2	)		—
Amortization of intangibles		(10.5	)		(35.8	)		(33.2	)
Other income (expense), net		(53.4	)		(0.2	)		(3.7	)
Operating loss		(121.1	)		(254.3	)		16.7
Loss from equity method investments		(29.9	)		(30.7	)		—
Interest income		0.7			—			—
Interest expense		(0.4	)		(0.1	)		(0.2	)
Other non-operating items, net		0.5			(0.8	)		3.1
Loss before income taxes		(150.2	)		(285.9	)		19.6
Income tax (expense) benefit		(43.6	)		0.9			(17.9	)
Loss from discontinued operations, net of income taxes		(193.8	)		(285.0	)		1.7
Less: Net loss attributable to non-controlling interest		(8.3	)		(126.1	)		(7.0	)
Net loss from discontinued operations	$	(185.5	)	$	(158.9	)	$	8.7

The Company has incurred $84.8 million in separation costs related to the spin-off of Veoneer, of which $76.3 million has been incurred 2018 year to date and is reported in Other income (expense), net. These costs are primarily related to professional fees associated with planning the spin-off, as well as spin-off activities within finance, tax, legal and information system functions and certain investment banking fees incurred upon the completion of the spin-off.

The following table summarizes the carrying value of major classes of assets and liabilities of Veoneer, reclassified as assets and liabilities of discontinued operations at December 31, 2017 (dollars in millions).

	At December 31, 2017
ASSETS
Receivables, net	$	460.5
Inventories, net		154.8
Other current assets		31.9
Total current assets, discontinued operations		647.2

Property, plant and equipment, net		364.2
Investments and other non-current assets		177.5
Goodwill		291.8
Intangible assets, net		122.2
Total non-current assets, discontinued operations	$	955.7

LIABILITIES
Accounts payable	$	323.5
Accrued expenses		199.1
Other current liabilities		45.6
Total current liabilities, discontinued operations		568.2

Long-term debt		11.0
Pension liability		19.1
Other non-current liabilities		34.0
Total non-current liabilities, discontinued operations	$	64.1

In connection with the spin-off, Autoliv entered into definitive agreements with Veoneer that, among other matters, set forth the terms and conditions of the spin-off and provide a framework for Autoliv’s relationship with Veoneer after the spin-off, including the following (collectively, the “Spin-off Agreements”):

The Distribution Agreement sets forth the principal transactions taken by Veoneer and by Autoliv in connection with the spin-off and the terms to govern certain aspects of the parties’ relationship following the spin-off. The Distribution Agreement also provides for cross-indemnities that, except as otherwise provided in the Distribution Agreement, are principally designed to place financial responsibility for the obligations and liabilities of Veoneer’s business with Veoneer and financial responsibility for the obligations and liabilities of Autoliv’s business with Autoliv. However, Autoliv has agreed to indemnify Veoneer for certain warranty, recall and product liabilities for Electronics products manufactured prior to April 1, 2018, and has retained an indemnification liability.

Pursuant to the Amended and Restated Transition Services Agreement, Autoliv or one of its subsidiaries will provide various services to Veoneer and its subsidiaries and Veoneer or one of its subsidiaries agreed to provide various services to Autoliv and subsidiaries of Autoliv for a limited time to help ensure an orderly transition following the spin-off. The services will terminate no later than March 31, 2020.

The Employee Matters Agreement governs Autoliv’s and Veoneer’s compensation and employee benefit obligations with respect to the employees and non-employee directors of each company.

Pursuant to the Agreement, the Company transferred to Veoneer pension benefits and postretirement benefits other than pension related to Veoneer employees. The transfer of assets and obligations to Veoneer resulted in a net decrease in the underfunded status of the sponsored pension and postretirement benefits other than pension of $22.8 million and the transfer of unrecognized losses in accumulated other comprehensive income of $6.3 million on the Distribution Date.

Pursuant to the Tax Matters Agreement, Autoliv and Veoneer allocated the liability for taxes and certain tax assets between the two companies. The Tax Matters Agreement also governs the parties’ respective rights, responsibilities, and obligations with respect to U.S. federal, state, local and foreign taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the spin-off and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and assistance and cooperation in respect of tax matters.

Pursuant to the Tax Matters Agreement, Autoliv is the primary obligor on all taxes which relate to any period prior to April 1, 2018. Consequently, the Company is liable for any transition taxes under the Tax Cuts and Jobs Act of 2017.

Reseller agreements are primarily comprised of arrangements between Veoneer and Autoliv business units in Japan, the U. S., India and Sweden to address situations in which customers have not yet been able to update their systems to reflect Veoneer as the supplier. Under the terms of these agreements and based on the substance of the relationships with the customers, Veoneer has the responsibility to provide the products to the customers although orders may be placed with Autoliv and Autoliv may collect the cash for the associated invoices which is then remitted to Veoneer.

In connection with the spin-off, Autoliv capitalized Veoneer with approximately $1 billion of cash. Net assets of $2,129 million, including approximately $1 billion of cash, were transferred to Veoneer on or prior to the Distribution Date, including $13 million of accumulated other comprehensive loss (primarily related to pension and cumulative translation adjustment) and the non-controlling interest of $112 million. This resulted in a $2,030 million reduction to retained earnings. In the second half of 2018 an adjustment to the cash contribution amount of $5 million was made reducing the net assets contributed to Veoneer to $2,123 million.

The following table presents depreciation, amortization, capital expenditures, acquisition of businesses and significant non-cash items of the discontinued operations related to Veoneer (dollars in millions). 2018 includes six months of discontinued operations.

	Years ended December 31
	2018			2017			2016
Depreciation	$	44.8		$	82.9		$	69.7
Amortization of intangible assets		10.5			35.8			33.2
Capital expenditures		71.1			109.6			100.9
Acquisition in affiliate, net		71.0			123.9			227.4
M/A-COM earn-out adjustment		(14.0	)		(12.7	)		—
Undistributed loss from equity method investment		29.9			30.7			—