Washington, D.C. 20549

For the quarterly period ended June 30, 2020
Commission File No.: 001-38471

Veoneer, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
Klarabergsviadukten 70, Section C6 
Box 13089 
Stockholm Sweden
(Address of principal executive offices)
SE- 103 02
(Zip Code)
+46 8 527 762 00
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $1.00 par valueVNENew York Stock Exchange
        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 every Interactive Data File required to be submitted 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 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 
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 17, 2020, there were 111,594,577 shares of common stock of Veoneer, Inc., par value $1.00 per share, outstanding.
Exhibit index located on page 42

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, RD&E spend, 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: general economic conditions; the impact of the coronavirus (COVID-19) on the Company’s financial condition, business operations and liquidity; the impact of COVID-19 on our customers and their production and product launch schedules; our ability to complete the divestiture of Veoneer Brake Systems ("VBS"), which is subject to the negotiation and documentation of a definitive agreement and closing; the cyclical nature of automotive sales and production; changes in general industry and market conditions or regional growth or decline; further decreases in light vehicle production; our ability to achieve the intended benefits from our separation from our former parent; our ability to be awarded new business or loss of business from increased competition; higher than anticipated costs and use of resources related to developing new technologies; 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; our ability to share RD&E costs with our customers; 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 post-retirement 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 identified in Part I Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A -“Risk Factors” and in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission ("SEC") on February 21, 2020.
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.

Veoneer, Inc.
Table of Contents


Part I – Financial Information
Item 1 – Condensed Consolidated Financial Statements
Veoneer, Inc.
Condensed Consolidated Statements of Operations (Unaudited)

  Three Months Ended June 30Six Months Ended June 30
Net salesNote 3$184  $489  $546  $984  
Cost of sales (181) (412) (490) (822) 
Gross profit 3  77  56  162  
Selling, general and administrative expenses (38) (50) (82) (102) 
Research, development and engineering expenses, net (44) (159) (175) (315) 
Amortization of intangibles (1) (6) (3) (11) 
Other income, net 16  1  18  1  
Operating loss (64) (137) (186) (265) 
Loss on divestiture and assets held for sales, netNote 4    (67)   
Loss from equity method investmentNote 9(19) (18) (38) (35) 
Interest income 3  4  7  8  
Interest expense (5) (2) (10) (3) 
Other non-operating items, net (3) 1  (1) 1  
Loss before income taxesNote 15(88) (152) (295) (294) 
Income tax (expense) benefitNote 7(2) 10  (26) 4  
Net loss (90) (142) (321) (290) 
Less: Net income (loss) attributable to non-controlling interest   (9) 1  (20) 
Net loss attributable to controlling interest $(90) $(133) $(322) $(270) 
Net loss per share - basicNote 14$(0.80) $(1.39) $(2.89) $(2.94) 
Net loss per share - diluted $(0.80) $(1.39) $(2.89) $(2.94) 
Weighted average number of shares outstanding, (in millions) 111.58  96.06  111.52  91.68  
Weighted average number of shares outstanding, assuming dilution (in millions) 111.58  96.06  111.52  91.68  
See notes to the unaudited condensed consolidated financial statements.


Veoneer, Inc.
Condensed Consolidated Statements of Comprehensive Loss (Unaudited)
 Three Months Ended June 30Six Months Ended June 30
Net loss$(90) $(142) $(321) $(290) 
Other comprehensive loss, before tax:
Change in cumulative translation adjustment18  (2) (3) (13) 
Pension liability    1    
Other comprehensive income (loss), before tax18  (2) (2) (13) 
Expense for taxes        
Other comprehensive income (loss), net of tax18  (2) (2) (13) 
Comprehensive loss(72) (144) (323) (303) 
Less: Comprehensive income (loss) attributable to non-controlling interest  (7) 1  (18) 
Comprehensive loss attributable to controlling interest$(72) $(137) $(324) $(285) 
See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.
Condensed Consolidated Balance Sheets
June 30, 2020December 31, 2019
Cash and cash equivalents $851  $859  
Receivables, net 206  253  
Inventories, netNote 8132  144  
Related party receivablesNote 168  11  
Prepaid expenses and other contract assets  29  47  
Other current assets 17  18  
Assets held for saleNote 417  317  
Total current assets 1,260  1,649  
Property, plant and equipment, net 406  473  
Operating lease right-of-use assets93  100  
Equity method investmentNote 974  87  
Goodwill290  290  
Intangible assets, net11  17  
Deferred tax assets 6  7  
Investments9  9  
Other non-current assets 28  111  
Total assets $2,177  $2,743  
Liabilities and equity   
Accounts payable $131  $233  
Related party payablesNote 161  3  
Accrued expensesNote 10200  192  
Income tax payable 28  7  
Other current liabilities 63  38  
Liabilities held for saleNote 46  118  
Total current liabilities 429  591  
4.00% Convertible Senior Notes due 2024
Note 5165  160  
Pension liabilityNote 1117  17  
Deferred tax liabilities 11  13  
Operating lease non-current liabilities75  82  
Finance lease non-current liabilities38  33  
Other non-current liabilities 28  29  
Total non-current liabilities 334  334  
Common stock  (par value $1.00, $325 million shares authorized, 111 million shares issued and outstanding as of June 30, 2020 and December 31, 2019)
 111  111  
Additional paid-in capital 2,347  2,343  
Accumulated deficit(1003) (681) 
Accumulated other comprehensive loss (41) (44) 
Total equity 1,414  1,729  
Non-controlling interest   89  
Total equity and non-controlling interest 1,414  1,818  
Total liabilities, equity and non-controlling interest $2,177  $2,743  
See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.
Condensed Consolidated Statements of Changes in Equity (Unaudited)
Six months ended June 30, 2020
 Equity attributable to
 Common StockAdditional Paid In CapitalAccumulated DeficitAccumulated Other
Comprehensive Loss
Balance at beginning of period$111  $2,343  $(681) $(44) $89  $1,818  
Net loss—  —  (322) —  1  (321) 
Foreign currency translation—  —  —     1  
     Stock based compensation expense—  4  —  —  —  4  
     Business divestitures—  —  —  3  (91) (88) 
Balance at end of period$111  $2,347  $(1,003) $(41) $  $1,414  

Six months ended June 30, 2019
 Equity attributable to
 Common StockAdditional Paid In CapitalAccumulated DeficitAccumulated Other
Comprehensive Loss
Balance at beginning of period$87  $1,938  $(181) $(19) $101  $1,927  
Comprehensive Income (Loss):
Net loss—  —  (270) —  (20) (290) 
Foreign currency translation—  —  —  (15) 2  (13) 
Stock based compensation expense—  3  —    —  3  
Issuance of common stock24  379  —  —  —  403  
Purchase of minority interest—  (14) —  —  14    
Equity component of issuance of convertible notes, net (Note 5)—  35—  —  —  35  
Balance at end of period$111  $2,341  $(451) $(34) $97  $2,064  


Veoneer, Inc.
Condensed Consolidated Statements of Cash Flow (Unaudited)
 Six Months Ended June 30
Operating activities  
Net loss$(321) $(290) 
Depreciation and amortization46  60  
Gain on divestitures(77)   
Assets impairment charge144    
Undistributed loss from equity method investments38  35  
Stock-based compensation4  3  
Deferred income taxes(1) (4) 
Other, net(9) 5  
Change in operating assets and liabilities:
Receivables, gross50  49  
Accrued expenses22  15  
Related party receivables and payables, net2  44  
Accounts payable(86) (65) 
Prepaid expenses29  (6) 
Inventories, gross14  9  
Income taxes21    
Other current assets and liabilities, net8  (15) 
Net cash used in operating activities(116) (160) 
Investing activities  
Proceeds from divestitures176    
Capital expenditures(51) (109) 
Equity method investment(25) (11) 
Short-term investments mature into cash  5  
Long term investments(1) (4) 
Net cash provided by (used in) investing activities99  (119) 
Financing activities  
Issuance of common stock
Dividend paid to non-controlling interest(5)   
(Payments for) proceeds from long-term debt(1) 202  
Proceeds from short-term debt15  20  
Net increase in related party short-term debt  2  
Net cash provided by financing activities9  629  
Effect of exchange rate changes on cash and cash equivalents  (10) 
Increase (decrease) in cash and cash equivalents(8) 340  
Cash and cash equivalents at beginning of period859  864  
Cash and cash equivalents at end of period$851  $1,204  
See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. Basis of Presentation
On June 29, 2018 (the “Distribution Date”), Veoneer, Inc. (“Veoneer” or “the Company”) became an independent, publicly-traded company as a result of the distribution by Autoliv, Inc. (“Autoliv” or “Former Parent”) of 100 percent of the outstanding common stock of Veoneer to the stockholders of Autoliv (the “Spin-Off”). Each Autoliv stockholder and holder of Autoliv’s Swedish Depository Receipts (SDRs) of record as of certain specified dates received one share of Veoneer common stock or one Veoneer SDR, respectively, for every one share of Autoliv common stock or Autoliv SDR. The Spin-Off was completed on June 29, 2018 in a tax free transaction pursuant to Section 355 of the U.S. Internal Revenue Code.
On July 2, 2018, Veoneer common stock began regular trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “VNE” and Veoneer SDRs began trading on Nasdaq Stockholm under the symbol “VNE-SDB”. Agreements entered into between Veoneer and Autoliv in connection with the Spin-Off govern the relationship between the parties following the Spin-Off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided on a temporary basis between the parties.
The Company has two operating segments, Electronics and Brake Systems. Electronics includes all electronics resources and expertise, Restraint Control Systems and Active Safety products, and Brake Systems provides brake control and actuation systems. The Asian business of the Brake Systems segment was sold on February 3, 2020 and the majority of the Brake Systems business in North America was sold subsequent to June 30, 2020. We do not expect the remaining Brake Systems business to be a reportable segment due to immateriality.

The accompanying unaudited condensed consolidated financial statements for Veoneer do not include all of the information and notes required by the accounting principles generally accepted in the U.S. (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures considered necessary for a fair presentation have been included. For further information, refer to Veoneer’s Audited Consolidated Financial Statements for the year ended December 31, 2019 and corresponding notes in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 21, 2020.
Certain amounts in the unaudited condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts.
Follow-on Offerings
On May 28, 2019, the Company completed follow-on public offerings of 24,000,000 shares of common stock and $207 million aggregate principal amount of 4.00% Convertible Senior Notes due 2024 (the “Notes”) (including $27 million aggregate principal amount pursuant to the underwriters’ over-allotment option to purchase additional notes). The public offering price for the Company's common stock offering was $17.50 per share. The Company received net proceeds of approximately $403 million from the common stock offering and approximately $200 million from the Notes offering, in each case after deducting the underwriting discounts and issuance costs directly attributable to each offering.
Divestiture of Veoneer Nissin Brake System ("VNBS")
On October 30, 2019, Veoneer signed definitive agreements to sell its 51% ownership in Veoneer Nissin Brake Japan ("VNBJ") and Veoneer Nissin Brake China ("VNBZ") entities that comprise VNBS to its joint venture partner Nissin-Kogyo Co., Ltd. (“Nissin Kogyo”), and Honda Motor Co., Ltd. The aggregate purchase price was $176 million. The divestiture of VNBJ and VNBZ was structured as two separate transactions each of which was completed on February 3, 2020, and the VNBS joint venture was terminated. See Note 4 "Divestiture and held for sale" for additional information.

Assets held for sale Veoneer Brake Systems ("VBS")
Following the strategic review initially launched in April 2019, in March 2020, Veoneer decided to focus on its core Electronics business and exit the brake control business. See Note 4 "Divestiture and held for sale" for additional information.


Note 2. Summary of Significant Accounting Policies
A summary of significant accounting policies is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 21, 2020.
Other Income, Net
On March 30, 2020, Veoneer commenced arbitration against Nissin Kogyo regarding a dispute arising out of a Share Purchase Agreement (“SPA”) dated September 2015. On June 30, 2020, Veoneer agreed to settle the proceedings, along with any and all legal claims arising out of or relating to the SPA dispute, for $20 million. The cash settlement was received by the Company on June 30, 2020 and is reported among Other income, net in the unaudited Condensed Consolidated Statements of Operations.
Research, development and engineering
In early 2019, as a result of multiple factors, including general market conditions, numerous customer change requests, and challenges involved in developing new technologies for various customer programs, Veoneer launched a broad initiative to have its customers contribute more to the cost of developing these programs. The Company began to approach customers to negotiate or renegotiate new or existing agreements to provide for more favorable cost sharing terms. As part of this initiative, Veoneer approached a certain customer to adjust the terms of existing award agreements. On May 20, 2020 the Company entered into an adjustment agreement with such customer and received a lump sum settlement of $65 million for past research, development and engineering costs and implementation of change requests, and $11 million for software specific future development.
During the second quarter of 2020 the Company received a total of $76 million from the adjustment agreement. According to the Company’s accounting policies, research, development and most engineering expenses are expensed as incurred. These expenses are reported net of expense reimbursements from contracts to further customize existing products for specific customers.
For the six months ended June 30, 2020, the Company recognized a total reimbursement from customers of $81 million for past completed engineering services as a reduction of research, development and engineering costs on the unaudited Condensed Consolidated Statement of Operations.
In addition, as of June 30, 2020 the Company recognized $16 million from the adjustment agreement as deferred income reported among Other current liabilities in the unaudited Condensed Consolidated Balance Sheet. The deferred amount will be recognized in a systematic way and in proportion to the completion of the future engineering services related to the adjustment agreement as reimbursement from customers.
Accounting for credit losses
The Company has evaluated the available adoption options of common credit loss methods that are acceptable as per FASB Accounting Standards Codification Topic 326, Credit Losses. The Company adopted the available Loss-rate method where the impairment is calculated using an estimated loss rate and multiplying it by the asset’s amortized cost at the balance sheet date. This method appropriately reflects the Company´s risk pattern in relation to its accounts receivables.
The key components of the Company’s Loss-rate model are as follows:
A list of the Company's customers credit rating and credit default risk rate from Bloomberg.
Actual write-offs or reversals of previous write-offs of accounts receivables.
Evaluation of other unusual facts and circumstances which could impact the credit loss rate, such as risk of bankruptcy or potential collectability issues.
The Company’s credit loss model includes the Company’s customer list. The customer list captures the existing customers. The list is put into a Bloomberg data query to generate customers short-term credit rating. The credit default risk rate is used to calculate the credit loss rate or estimated loss rate.
For customers that do not have credit default risk rate, management uses the six-month LIBOR rate as a credit rating and a credit default risk rate. Management believes that the six-month LIBOR rate adequately reflects the short-term nature of the Company’s trade receivables and is also in line with the Company’s invoice payment terms.

Concentration of Credit Risk
A substantial majority of the Company’s trade receivables are derived from sales to OEMs. For the three and six months ended June 30, 2020 the Company’s four largest customers accounted for 55% and 59% of net sales, respectively and for the three and six months ended June 30, 2019, the Company’s four largest customers accounted for 60% and 59% of net sales, respectively. Additionally, as of June 30, 2020 and December 31, 2019, these four largest customers accounted for 40% and 39%, respectively, of the Company’s accounts receivables. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. The Company has adopted credit policies and standards intended to accommodate industry growth and inherent risk. The Company believes that credit risks are moderated by the financial stability of the Company’s major customers.
New Accounting Standards
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.
The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s condensed consolidated financial statements.
Adoption of New Accounting Standards
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held and requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. ASU 2016-13 is effective for public business entities for annual periods beginning after December 15, 2019, and earlier adoption is permitted for annual periods beginning after December 15, 2018. The Company adopted ASU 2016-13 effective January 1, 2020 and applied a loss rate model to compute the expected credit loss allowance. The adoption of ASU 2016-13 did not have a material impact on the Company's condensed consolidated financial statements.
In November 2018, the FASB issued ASU 2018-18 Collaborative Arrangements (Topic 808), Clarifying the Interaction between Topic 808 and Topic 606, which (1) clarifies that certain transactions between collaborative arrangement participants should be accounted for under ASC Topic 606, Revenue from Contracts with Customers (Topic 606), when the collaborative arrangement participant is a customer in the context of a unit of account, (2) adds unit-of-account guidance in Topic 808 to align with Topic 606 when an entity is assessing whether the collaborative arrangement, or a part of the arrangement, is within the scope of Topic 606, (3) precludes presenting transactions together with revenue when those transactions involve collaborative arrangement participants that are not directly related to third parties and are not customers. The Company is required to adopt ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-18 did not have a material impact on the Company's condensed consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes the requirement to disclose: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. ASU 2018-13 requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted. The Company is required to adopt ASU 2018-18 in the first quarter of 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019,

as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, and has not made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, have allowed the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of approximately $75 million as of January 1, 2019. The adoption of the new lease standard did not have a material impact on the Company's condensed consolidated financial statements.
Accounting Standards Issued But Not Yet Adopted
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes. ASU 2019-12 is effective for public business entities for annual periods beginning after December 15, 2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company plans to adopt ASU 2019-12 as of January 1, 2021. The Company has concluded that the pending adoption of ASU 2019-12 will not have a material impact on the Company’s condensed consolidated financial statements.
In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans. ASU 2018-14 modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. ASU 2018-14 removes the requirements to disclose: amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost over the next fiscal year; the amount and timing of plan assets expected to be returned to the employer; and the effects of a one-percentage point change in assumed health care cost trend rates. ASU 2018-14 requires disclosure of an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company is currently evaluating this guidance to determine the impact on the Company's condensed consolidated financial statements.
Note 3. Revenue
Disaggregation of revenue
In the following tables, revenue is disaggregated by primary region and products.
Net Sales by Region
Three Months Ended June 30, 2020Three Months Ended June 30, 2019
(Dollars in millions)ElectronicsBrake SystemsTotalElectronicsBrake SystemsTotal
Asia$59  $  $59  $89  $81  $170  
Americas43  5  48  145  15  160  
Europe77    77  159    159  
Total net sales$179  $5  $184  $393  $96  $489  

Net Sales by Region
Six Months Ended June 30, 2020Six Months Ended June 30, 2019
(Dollars in millions)ElectronicsBrake SystemsTotalElectronicsBrake SystemsTotal
Asia$117  $24  $141  $179  $153  $332  
Americas160  19  179  299  31  330  
Europe226    226  322    322  
Total net sales$503  $43  $546  $800  $184  $984  


Net Sales by Products
Three Months Ended June 30, 2020Three Months Ended June 30, 2019
(Dollars in millions)ElectronicsBrake SystemsTotalElectronicsBrake SystemsTotal
Restraint Control Systems$100  $  $100  $209  $  $209  
Active Safety products79    79  184    184  
Brake Systems  5  5    96  96  
Total net sales$179  $5  $184  $393  $96  $489  

Net Sales by Products
Six Months Ended June 30, 2020Six Months Ended June 30, 2019
(Dollars in millions)ElectronicsBrake SystemsTotalElectronicsBrake SystemsTotal
Restraint Control Systems$262  $  $262  $425  $  $425  
Active Safety products241    241  375    375  
Brake Systems  43  43    184  184  
Total net sales$503  $43  $546  $800  $184  $984  

Note 4. Divestiture and held for sale
In 2019, the Company started exploring strategic options for its non-core business in the Brake Systems segment. In the first quarter of 2020, management committed and approved a plan to sell VBS. The Company expects to sell the business within one year from management's approval of the plan. The business and its associated assets and liabilities meet the criteria for presentation as held for sale as of June 30, 2020 and were required to be adjusted to the lower of fair value less cost to sell or carrying value. This resulted in an impairment charge of approximately $144 million which was recorded within Gain/(loss) on divestiture and assets held for sales, net on the unaudited Condensed Consolidated Statements of Operations during the period ended June 30, 2020. The impairment was measured using third party sales pricing to determine fair values of the assets. The inputs utilized in the analyses are classified as Level 3 inputs within the fair value hierarchy as defined in ASC 820, "Fair Value Measurement." The assets and liabilities associated with the transaction are separately classified as held for sale in the unaudited Condensed Consolidated Balance Sheet as of June 30, 2020 and depreciation of long-lived assets ceased on June 30, 2020. The planned divestiture did not meet the criteria for presentation as a discontinued operation.
The major classes of assets and liabilities held for sale were as follows:
(Dollars in millions)As of
Assets held for saleJune 30, 2020
Prepaid exp/accrued income$1  
Property, plant and equipment, net79  
Current deferred charges81  
Impairment of carrying value(144) 
Total assets held for sale$17  
Liabilities held for sale
Accounts payable(6) 
Total liabilities held for sale$(6) 


In the fourth quarter of 2019, management approved a plan to sell VNBS. The business and its associated assets and liabilities met the criteria for presentation as held for sale as of December 31, 2019, and depreciation of long-lived assets ceased. The divestiture did not meet the criteria for presentation as a discontinued operation.
On October 30, 2019, the Company entered into definitive agreements with Nissin-Kogyo Co., Ltd. and Honda Motor Co., Ltd to divest VNBS. On February 3, 2020, the Company completed the sale of VNBS. The aggregate purchase price of the transaction was $176 million, subject to certain adjustments. The net cash proceeds after adjusting for closing costs was $175 million. The Company recognized a gain on the divestiture of $77 million, net of closing costs.
The major classes of assets and liabilities held for sale were as follows:
(Dollars in millions)As of
Assets held for saleDecember 31, 2019
Cash and cash equivalents$35  
Receivables, net58  
Inventories, net17  
Property, plant and equipment, net126  
Intangible assets, net66 <