Autoliv Inc. has announced a one-time, non-cash, goodwill impairment charge and specifies expected one-time costs related to the planned spinoff and public listing of its electronics business.
One-time goodwill impairment charge includes;
- A non-cash impairment of goodwill in the Autoliv Nissin Brake Systems joint venture (of which Autoliv owns 51 percent), with a net income effect to Autoliv of approximately $100 million in the fourth quarter of 2017
- The total impairment, affecting reported operating income is $234 million. There is no effect on adjusted (guided) operating income or adjusted earnings per share
- It is a non-cash item, which will not affect cash flow, financial targets or the business plan of the Electronics business
- It is the outcome of a weaker sales development than anticipated at the start of operations (April 2016) of the ANBS brake control joint venture
Update of expected costs relating to spinoff of the electronics business
- Project costs for the separation and spinoff are expected to be up to $70 million.
- Mainly related to accounting, finance, legal, IT and listing
- Project costs will be booked in the quarter in which they occur; the majority are not expected to be tax-deductible
- Tax-related costs from the separation of the legal entities in preparation for the spin-off are estimated to be up to $80 million
- Tax-related costs will be recorded at the time of the separation of the legal entities, expected in the first half of 2018
The spinoff of the electronics business is progressing according to schedule and is expected to be completed during the third quarter of 2018, subject to market, regulatory and certain other conditions, including approval by Autoliv’s board of directors. The spinoff is as previously communicated expected to be tax-free to Autoliv shareholders.