AUTOLIV INC - Quarter Report: 2023 March (Form 10-Q)

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 March 31, 2023

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No.: 001-12933

AUTOLIV, INC.

(Exact name of registrant as specified in its charter)


Delaware		51-0378542
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Klarabergsviadukten 70, Section B7
Box 70381,
Stockholm, Sweden		SE-107 24
(Address of principal executive offices)		(Zip Code)

+46 8 587 20 600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value $1.00 per share)	ALV	New 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 April 17, 2023, there were 85,829,804 shares of common stock of Autoliv, Inc., par value $1.00 per share, outstanding.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. (“Autoliv,” the “Company” or “we”) or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such 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.

Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general economic conditions, including inflation; the impacts of the coronavirus (COVID-19) pandemic on the Company’s financial condition, business operations, operating costs, liquidity, competition and the global economy; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation and distribution delays or interruptions; supply chain disruptions and component shortages specific to the automotive industry or the Company; disruptions and impacts relating to the ongoing conflict between Russia and Ukraine; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignments: restructuring and cost reduction and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; component shortages; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgements or financial penalties 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 pending or future litigation or infringement claims and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; our ability to meet our sustainability targets, goals and commitments; political conditions; dependence on and relationships with customers and suppliers; and other risks and uncertainties identified in Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.

For any forward-looking statements contained in this 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 update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.


INDEX

PART I - FINANCIAL INFORMATION		4

ITEM 1. FINANCIAL STATEMENTS		4

1.	Basis of Presentation	9
2.	New Accounting Standards	10
3.	Fair Value Measurements	11
4.	Income Taxes	14
5.	Inventories	14
6.	Restructuring	15
7.	Product-Related Liabilities	15
8.	Retirement Plans	16
9.	Contingent Liabilities	17
10.	Stock Incentive Plan	19
11.	Earnings Per Share	19
12.	Revenue Disaggregation	20
13.	Subsequent Events	20

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		21
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		31
ITEM 4. CONTROLS AND PROCEDURES		31
PART II - OTHER INFORMATION		32
ITEM 1. LEGAL PROCEEDINGS		32
ITEM 1A. RISK FACTORS		32
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		32
ITEM 3. DEFAULTS UPON SENIOR SECURITIES		32
ITEM 4. MINE SAFETY DISCLOSURES		32
ITEM 5. OTHER INFORMATION		32
ITEM 6. EXHIBITS		33

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share data)


	Three Months Ended March 31,
	2023			2022
Net sales	$	2,493		$	2,124
Cost of sales		(2,113	)		(1,836	)
Gross profit		379			288
Selling, general and administrative expenses		(132	)		(115	)
Research, development and engineering expenses, net		(116	)		(107	)
Amortization of intangibles		(0	)		(1	)
Other income (expense), net1)		(4	)		70
Operating income		127			134
Income from equity method investment		2			1
Interest income		2			1
Interest expense		(19	)		(13	)
Other non-operating items, net		(2	)		(4	)
Income before income taxes		109			119
Income tax expense		(34	)		(36	)
Net income2)		74			83
Less: Net income attributable to non-controlling interest		0			0
Net income attributable to controlling interest	$	74		$	83

Net earnings per share – basic	$	0.86		$	0.95
Net earnings per share – diluted	$	0.86		$	0.94

Weighted average number of shares outstanding, net of treasury shares (in millions)		86.1			87.5
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions)		86.3			87.8

Cash dividend per share – declared	$	0.66		$	0.64
Cash dividend per share – paid	$	0.66		$	0.64

1) The three months period ending March 31, 2022, includes a gain on sale of property of $80 million in Japan.

2) For the three months period ended March 31, 2023 and March 31, 2022, the aggregate transaction gain (loss) included in net income for the period were $(5) million and $(6) million, respectively.

See Notes to the unaudited Condensed Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in millions)


	Three Months Ended March 31,
	2023			2022
Net income	$	74		$	83
Other comprehensive income before tax:
Change in cumulative translation adjustments		36			6
Net change in unrealized components of defined benefit plans		(0	)		12
Other comprehensive income, before tax		35			18
Tax effect allocated to other comprehensive income		0			(4	)
Other comprehensive income, net of tax		35			14
Comprehensive income		110			98
Less: Comprehensive income attributable to non-controlling interest		0			0
Comprehensive income attributable to controlling interest	$	110		$	97

See Notes to the unaudited Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)


	As of
	March 31, 2023			December 31, 2022
Assets
Cash and cash equivalents	$	713		$	594
Receivables, net		2,106			1,907
Inventories, net		986			969
Prepaid expenses and accrued income		166			160
Other current assets		90			84
Total current assets		4,061			3,714
Property, plant and equipment, net		2,045			1,960
Operating lease right-of-use assets		169			160
Goodwill		1,376			1,375
Intangible assets, net		7			7
Other non-current assets		528			502
Total assets		8,185			7,717

Liabilities and equity
Short-term debt		577			711
Accounts payable		1,683			1,693
Accrued expenses		969			915
Operating lease liabilities - current		41			39
Other current liabilities		258			283
Total current liabilities		3,529			3,642
Long-term debt		1,601			1,054
Pension liability		159			154
Operating lease liabilities - non-current		127			119
Other non-current liabilities		128			121
Total non-current liabilities		2,015			1,450
Common stock		91			91
Additional paid-in capital		1,105			1,113
Retained earnings		2,295			2,310
Accumulated other comprehensive loss		(487	)		(522	)
Treasury stock		(376	)		(379	)
Total controlling interest's equity		2,627			2,613
Non-controlling interest		14			13
Total equity		2,641			2,626
Total liabilities and equity	$	8,185		$	7,717

See Notes to the unaudited Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)


	Three Months Ended March 31,
	2023			2022
Operating activities
Net income	$	74		$	83
Adjustments to reconcile net income to cash (used in) provided by operating activities:
Depreciation and amortization		92			95
Gain on divestiture of property		—			(80	)
Other, net		(10	)		(11	)
Net change in operating assets and liabilities		(202	)		(18	)
Net cash (used in) provided by operating activities		(46	)		70

Investing activities
Expenditures for property, plant and equipment		(144	)		(112	)
Proceeds from sale of property, plant and equipment		0			95
Net cash used in investing activities		(143	)		(17	)

Financing activities
Net (decrease) increase in short-term debt		(135	)		9
Proceeds from long-term debt		533			—
Repayment of long-term debt		—			(10	)
Dividends paid		(57	)		(56	)
Stock repurchased		(42	)		(18	)
Common stock options exercised		0			0
Net cash provided by (used in) financing activities		300			(74	)
Effect of exchange rate changes on cash and cash equivalents		7			(11	)
Net increase (decrease) in cash and cash equivalents		119			(31	)
Cash and cash equivalents at beginning of period		594			969
Cash and cash equivalents at end of period	$	713		$	938

See Notes to unaudited Condensed Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) (Dollars in millions)


	Common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total controlling interest's equity			Non- controlling interest		Total equity
Balances at December 31, 2022	$	91		$	1,113		$	2,310		$	(522	)	$	(379	)	$	2,613		$	13	$	2,626
Comprehensive Income:
Net income								74									74			0		74
Foreign currency translation adjustment											36						36			0		36
Pension liability											(0	)					(0	)				(0	)
Total Comprehensive Income		—			—			74			35			—			110			0		110
Stock repurchased and retired		(0	)		(9	)		(33	)					(0	)		(42	)				(42	)
Stock-based compensation														3			3					3
Cash dividends declared								(57	)								(57	)				(57	)
Balances at March 31, 2023	$	91		$	1,105		$	2,295		$	(487	)	$	(376	)	$	2,627		$	14	$	2,641


	Common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total controlling interest's equity			Non- controlling interest		Total equity
Balances at December 31, 2021	$	103		$	1,329		$	2,742		$	(408	)	$	(1,133	)	$	2,633		$	15	$	2,648
Comprehensive Loss:
Net income								83									83			0		83
Foreign currency translation adjustment											6						6			0		6
Pension liability											8						8					8
Total Comprehensive Income		—			—			83			14			—			97			0		98
Retired and repurchased shared		(0	)		(4	)		(13	)								(18	)				(18	)
Stock-based compensation														2			2					2
Cash dividends declared								(56	)								(56	)				(56	)
Balances at March 31, 2022	$	103		$	1,325		$	2,755		$	(393	)	$	(1,131	)	$	2,659		$	15	$	2,674

See Notes to the unaudited Condensed Consolidated Financial Statements.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unless otherwise noted, all amounts are presented in millions of dollars, except for per share amounts)

March 31, 2023

1. BASIS OF PRESENTATION

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited consolidated financial statements and all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2023.

The Condensed Consolidated Balance Sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements.

The Company has one reportable segment, which includes Autoliv’s airbag and seatbelt products and components.

Certain amounts in the condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. Certain amounts in prior periods have been reclassified to conform to current year presentation.

Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.

2. 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 (“ASC”).

Adoption of new accounting standards

In September 2022, the FASB issued ASU 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50), Disclosure of Supplier Finance Program Obligations, which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. During the fiscal year of adoption, the information on the key terms of the programs and the balance sheet presentation of the program obligations, which are annual disclosure requirements, should be disclosed in each interim period. The amendments in this update should be applied retrospectively to each period in which a balance sheet is presented, except for the amendment on roll-forward information, which should be applied prospectively.

The Company adopted ASU 2022-04 as of January 1, 2023. The Company has an agreement with an external payment service provider to facilitate the payments to certain suppliers. The outstanding obligations confirmed towards the external payment service provider are recorded in Accounts Payable in the Condensed Consolidated Balance Sheet until payment has been effected. The Company has undertaken to make sure the payment is effected on the original invoice maturity date. The payment terms range between 30 days and 165 days, with a weighted average of 130 days.

The roll-forward of the Company's outstanding obligations confirmed as valid under its supplier finance program for the three month period ended March 31, 2023 is as follows (dollars in millions):


	As of
	March 31, 2023			December 31, 2022
Confirmed obligations outstanding at beginning of the period	$	314		n/a
Invoices confirmed during the period		335		n/a
Confirmed invoices paid during the period		(362	)	n/a
Confirmed obligations outstanding at end of the period1)	$	287		$	314

1) Amount of obligations confirmed under the program that remains unpaid by the Company is reported as Accounts Payable in the Condensed Consolidated Balance Sheet.

Accounting standards issued but not yet adopted

None.

3. FAIR VALUE MEASUREMENTS

Assets and liabilities measured at fair value on a recurring basis

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and other current financial assets and liabilities approximate their fair value because of the short-term maturity of these instruments.

The Company uses derivative financial instruments (“derivatives”) as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates 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 policy. All derivatives are recognized in the consolidated financial statements at fair value. For certain 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 each hedge is entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates.

The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability. Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value.

All the Company’s derivatives are classified as Level 2 financial instruments in the fair value hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (“ISDA agreements”) with all derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 have been presented on a gross basis. According to the ISDA agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below.

Derivatives designated as hedging instruments

There were no derivatives designated as hedging instruments as of March 31, 2023 or December 31, 2022 related to the Company's operations.

Derivatives not designated as hedging instruments

Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding as of March 31, 2023 and December 31, 2022 were foreign exchange swaps.

For the three months period ended March 31, 2023 and March 31, 2022, the gains (losses) recognized in other non-operating items, net were $(5) million and $9 million, respectively, for derivative instruments not designated as hedging instruments. The realized part of the losses referred to above is reported under financing activities in the statement of cash flows.

For the three months period ended March 31, 2023 and March 31, 2022, the gains (losses) recognized as interest expense were immaterial.

The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions).


	As of
	March 31, 2023									December 31, 2022
				Fair Value Measurements									Fair Value Measurements
Description	Nominal volume			Derivative asset (Other current assets)			Derivative liability (Other current liabilities)			Nominal volume			Derivative asset (Other current assets)			Derivative liability (Other current liabilities)
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	2,688	1)	$	33	2)	$	17	3)	$	2,616	4)	$	22	5)	$	15	6)
Total derivatives not designated as hedging instruments	$	2,688		$	33		$	17		$	2,616		$	22		$	15

1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $2,688 million.

2) Net amount after deducting for offsetting swaps under ISDA agreements is $33 million.

3) Net amount after deducting for offsetting swaps under ISDA agreements is $17 million.

4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $2,616 million.

5) Net amount after deducting for offsetting swaps under ISDA agreements is $22 million.

6) Net amount after deducting for offsetting swaps under ISDA agreements is $15 million.

Fair Value of Debt

The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside within Level 2 of the fair value hierarchy.

During the first quarter of 2023, the Company issued a five year €500 million Eurobond. These notes were issued as green bonds.

The fair value and carrying value of debt is summarized in the table below (dollars in millions).


	As of
	March 31, 2023				December 31, 2022
	Carrying value1)		Fair value		Carrying value1)		Fair value
Long-term debt
Bonds	$	1,311	$	1,298	$	767	$	735
Loans		290		294		287		292
Total long-term debt		1,601		1,592		1,054		1,027

Short-term debt
Short-term portion of long-term debt		545		541		533		527
Overdrafts and other short-term debt		33		33		178		178
Total short-term debt	$	577	$	574	$	711	$	705

1) Debt as reported in balance sheet.

Assets and liabilities measured at fair value on a nonrecurring basis

In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its balance sheet that are measured at fair value on a nonrecurring basis, including certain long-lived assets, including equity method investments, goodwill and other intangible assets, typically as it relates to 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.

For the three months period ended March 31, 2023 and March 31, 2022, the Company did not record any material impairment charges on its long-lived assets for its operations.

4. INCOME TAXES

The effective tax rate for the three months period ended March 31, 2023 was 31.6% compared to 30.3% for the three months period ended March 31, 2022. Discrete tax items, net for the three months period ended March 31, 2023 had an unfavorable impact of 0.8%. Discrete tax items, net for the three months period ended March 31, 2022 had an unfavorable impact of 0.6%.

The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2012.

As of March 31, 2023, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods.

During the three months period ended March 31, 2023, the Company recorded a net increase of $2 million to income tax reserves for unrecognized tax benefits based on tax positions related to the current year, including accruing additional interest related to unrecognized tax benefits from prior years. Of the total unrecognized tax benefits of $48 million recorded as of March 31, 2023, $12 million is classified as current tax payable within Other current liabilities and $36 million is classified as non-current tax payable within Other non-current liabilities on the Condensed Consolidated Balance Sheet.

5. INVENTORIES

Inventories are stated at the lower of cost (“FIFO”) and net realizable value. The components of inventories were as follows (dollars in millions):


	As of
	March 31, 2023			December 31, 2022
Raw materials	$	449		$	445
Work in progress		356			350
Finished products		273			265
Inventories		1,078			1,060
Inventory valuation reserve		(92	)		(91	)
Total inventories, net of reserve	$	986		$	969

6. RESTRUCTURING

As of March 31, 2023, approximately $9 million out of the $29 million in total reserve balance can be attributed to footprint optimization activities in Europe initiated in the third quarter of 2020. These activities are expected to be concluded in 2023. The cash payments for the three months period ended March 31, 2023 relate to restructuring activities in Europe. The provision charge and cash payments for the three months period ended March 31, 2022 mainly related to footprint optimization activities in Asia.

The table below summarizes the change in the balance sheet position of the employee-related restructuring reserves (dollars in millions). The restructuring reserve balances are included within Accrued expenses in the Condensed Consolidated Balance Sheets. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented.


	Three Months Ended March 31,
	2023			2022
Reserve at beginning of the period	$	32		$	88
Provision - charge		2			12
Provision - reversal		(0	)		(0	)
Cash payments		(5	)		(41	)
Translation difference		1			(1	)
Reserve at end of the period	$	29		$	58

7. PRODUCT-RELATED LIABILITIES

The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability and warranty issues. For further explanation, see Note 9. Contingent Liabilities below.

For the three months period ended March 31, 2023, provisions and cash payments primarily relate to warranty related issues. For the three months period ended March 31, 2022, provisions and cash payments primarily related to warranty related issues. As of March 31, 2023, the reserve for product related liabilities mainly relate to recall related issues.

The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). The reserve for product related liabilities is included in accrued expenses and Other non-current liabilities on the Condensed Consolidated Balance Sheets. A majority of the Company’s product-related liabilities as of March 31, 2023 are covered by insurance. Insurance receivables are included within Other current assets and Other non-current assets on the Condensed Consolidated Balance Sheets. As of March 31, 2023, the Company had total insurance receivables of $140 million.


	Three Months Ended March 31,
	2023			2022
Reserve at beginning of the period	$	145		$	144
Change in reserve		1			9
Cash payments		(5	)		(3	)
Translation difference		0			(0	)
Reserve at end of the period	$	141		$	150

8. RETIREMENT PLANS

The components of total Net Periodic Benefit Cost associated with the Company’s defined benefit retirement plans are as follows (dollars in millions):


U.S. Plans	Three Months Ended March 31,
	2023			2022
Interest cost	$	3		$	2
Expected return on plan assets		(2	)		(4	)
Amortization of actuarial loss		0			0
Settlement loss		0			1
Net periodic benefit cost	$	1		$	(1	)

Non-U.S. Plans	Three Months Ended March 31,
	2023			2022
Service cost	$	2		$	3
Interest cost		2			1
Expected return on plan assets		(1	)		(0	)
Amortization of actuarial loss		0			0
Settlement gain		—			(1	)
Net periodic benefit cost	$	3		$	3

The Service cost component in the table above is reported among other employee compensation costs in the Consolidated Statements of Income. The remaining components - Interest cost, Expected return on plan assets, Amortization of actuarial loss, Settlement loss (gain) and Curtailment gain - are reported as Other non-operating items, net in the Consolidated Statements of Income.

Settlement accounting has been triggered for the primary U.S. pension plan in the first quarter of 2023 because the lump-sum payments made during the quarter exceeded the sum of Service cost and Interest cost for this U.S. plan. Due to the settlement accounting, the obligation and plan assets for the primary U.S. plan have been re-measured as of March 31, 2023, which resulted in an immaterial change in the net pension liability compared to December 31, 2022. The discount rate used to determine the U.S. net periodic benefit cost because of the re-measurement was changed from 5.41% to 5.09% in the first quarter of 2023. The expected long-term rate of return on plan asset is unchanged at 5.05%.

9. CONTINGENT LIABILITIES

Legal Proceedings

Various claims, lawsuits 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. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of losses resulting from the antitrust proceedings described below, 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 Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in the future.

ANTITRUST MATTERS

Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products that the Company sells. In addition to concluded matters, authorities of other countries with significant light vehicle manufacturing or sales may initiate similar investigations.

PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY

Autoliv 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. Recall decisions regarding the Company’s products may require a significant amount of judgment by us, our customers and safety regulators and are influenced by a variety of factors. Once a recall has been made, the cost of a recall is also subject to a significant amount of judgment and discussions between the Company and its customers. 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 us or expected by the customer in either a warranty or a recall situation. Accordingly, the future costs of warranty or recall claims by the customers may be material. However, the Company believes its established reserves are adequate. Autoliv’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 maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.

Product Liability:

On September 18, 2014, Jamie Andrews filed a wrongful death products liability suit against several Autoliv entities stemming from a fatal car accident in 2013 where the plaintiff’s husband was fatally injured. The lawsuit alleges that Autoliv should be liable for a defectively-designed driver seatbelt. The case was removed to the United States District Court for the Northern District of Georgia. The suit originally included Bosch and Mazda entities as well, but these entities were dismissed pursuant to confidential settlement agreements with the plaintiff, and all of the Autoliv entities except Autoliv Japan Ltd. were also dismissed. On January 10, 2017, the District Court entered an order granting summary judgment in favor of Autoliv, concluding that Autoliv was not actively involved in the design of Mr. Andrews’s seatbelt and, therefore, should not be liable for plaintiff’s claims as a matter of law. However, on appeal, the Eleventh Circuit Court of Appeals reversed the decision, holding that, under Georgia’s products liability statute, Autoliv could be liable for a design defect associated with the seatbelt, regardless of its level of involvement in the seatbelt’s ultimate design, because Autoliv manufactured it. On October 4, 2021, the case proceeded to a bench trial before the United States District Court for the Northern District of Georgia. On December 31, 2021, the District Court entered a Final Order and Judgment concluding that Mr. Andrews’s seatbelt was defectively designed and Autoliv was strictly liable for the design. In doing so, the District Court concluded that Mr. Andrews had incurred $27,019,343 in compensatory damages, but only ordered Autoliv to pay 50 percent of that amount, $13,509,671 after finding that 50 percent of the fault for Mr. Andrews’s damages should be apportioned to Mazda. The Court declined to apportion any fault for Mr. Andrews’s damages to Mr. Andrews or Bosch. The District Court also entered an award of punitive damages against Autoliv in the amount of $100,000,000. Subsequently, on September 30, 2022, the District Court awarded pre-judgment interest on the compensatory damages award of approximately $4,734,350.

The Company believes the District Court's verdict was in error, including the grossly high punitive damages award, and appealed the verdict. Ms. Andrews has also initiated a cross-appeal.

The Company has determined that a loss with respect to this litigation is probable and has in the fourth quarter of 2021 accrued $14 million pursuant to ASC 450. The Company accrued an additional $5 million for the pre-judgement interest in the third quarter of 2022. The accrual is reflected in the total product liability accrual. This amount reflects the low end of the range of a probable loss of $18 million to $118 million. The accrual reflects the Company’s best estimate of the probable loss based on currently available information and does not include any amount for the punitive damages. It is reasonably possible that the Company may have to pay the entire damages awarded by the District Court. The Company believes that its insurance should cover all of the types of damages awarded by the District Court, and has therefore recognized a receivable, included within Other non-current assets on the Consolidated Balance Sheets for the expected insurance proceeds. However, the extent of the Company's insurance coverage for punitive damages in this matter is uncertain and may be less than all of such punitive damages ultimately awarded. In the event all or a portion of the punitive damages award survives the Company's appeal, the Company will continue to engage with its insurance carriers and aggressively pursue all potential recoveries. The ultimate loss to the Company of the litigation matter could be materially different from the amount the Company has accrued. The Company cannot predict or estimate the duration or ultimate outcome of this matter.

Specific Recalls:

In the fourth quarter of 2020, the Company was made aware of a potential recall by American Honda Motor Co. and the recall of approximately 449,000 vehicles relating to the malfunction of front seat belt buckles was announced on March 9, 2023 (the “Honda Buckle Recall”). The Company determined pursuant to ASC 450 that a loss with respect to the Honda Buckle Recall is probable and accrued an amount that is reflected in the total product liability accrual in the fourth quarter of 2020 and increased the accrual in the fourth quarter of 2021. The amount by which the product liability accrual exceeds the product liability insurance receivable with respect to the Honda Buckle Recall is $27 million and includes self-insurance retention costs and deductibles. The ultimate loss to the Company of the Honda Buckle Recall could be materially different from the amount the Company has accrued.

Volvo Car USA, LLC (together with its affiliates, “Volvo”) has recalled approximately 762,000 vehicles relating to the malfunction of inflators produced by ZF (the “ZF Inflator Recall”). The recalled ZF inflators were included in airbag modules supplied by the Company only to Volvo. The recall commenced in November 2020 and later expanded in September 2021. Because the Company’s airbags were involved with the ZF Inflator Recall, the Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the ZF Inflator Recall. The Company continues to evaluate this matter with Volvo and ZF and no accrual has been made. Although the Company currently estimates a range of $0 to $43 million with respect to this potential loss, the Company anticipates that any losses net of insurance claims and claims against ZF will be immaterial.

Intellectual Property:

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 7 above summarizes the change in the balance sheet position of the product-related liabilities.

10. STOCK INCENTIVE PLAN

Eligible employees and non-employee directors of the Company participate in the Autoliv, Inc.1997 Stock Incentive Plan, as amended, (“the Plan”), and receive Autoliv stock-based awards which include stock options (“SOs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”).

For the three months period ended March 31, 2023, the Company recorded approximately $3 million in stock-based compensation expense related to RSUs and PSUs. For the three months period ended March 31, 2022, the Company recorded approximately $2 million in stock-based compensation expense related to RSUs and PSUs.

During the three months period ended March 31, 2023, approximately 92 thousand shares of common stock from the treasury stock were utilized by the Plan. During the three months period ended March 31, 2022, approximately 122 thousand of common stock from the treasury stock were utilized by the Plan.

11. EARNINGS PER SHARE

The computation of basic and diluted earnings per share is set forth in the table below. Anti-dilutive shares outstanding were immaterial for all periods presented below.


	Three Months Ended March 31,
(In millions, except per share amounts)	2023		2022
Numerator:
Basic and diluted:
Net income attributable to controlling interest	$	74	$	83
Denominator:
Basic: Weighted average common stock		86.1		87.5
Add: Weighted average stock options/share awards		0.2		0.2
Diluted weighted average common stock:		86.3		87.8

Net earnings per share - basic	$	0.86	$	0.95

Net earnings per share - diluted	$	0.86	$	0.94

12. REVENUE DISAGGREGATION

The Company’s disaggregated revenue for the three months period ended March 31, 2023 and 2022 were as follows (dollars in millions).


Net Sales by Products	Three Months Ended March 31,
	2023		2022
Airbags, Steering Wheels and Other1)	$	1,673	$	1,381
Seatbelt Products1)		820		744
Total net sales	$	2,493	$	2,124

Net Sales by Region	Three Months Ended March 31,
	2023		2022
China	$	453	$	447
Asia, excluding China		483		410
Americas		831		692
Europe		725		575
Total net sales	$	2,493	$	2,124

1) Including Corporate and other sales.

Contract Balances

Contract assets relate 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 and is included in Other current assets in the Condensed Consolidated Balance Sheet. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. The net change in the contract assets balance, reflecting the adjustments needed to align revenue recognition for work completed but not billed, for the three months period ended March 31, 2023 and March 31, 2022, were not material in any period.

13. SUBSEQUENT EVENTS

There were no reportable events subsequent to March 31, 2023.

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

The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the United States Securities and Exchange Commission (the “SEC”) on February 16, 2023. Unless otherwise noted, all dollar amounts are in millions.

Autoliv, Inc. (“Autoliv” or the “Company”) 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, Autoliv AB and Autoliv ASP, Inc.

Through its operating subsidiaries, Autoliv is a supplier of automotive safety systems with a broad range of product offerings, including modules and components for passenger and driver airbags, side airbags, curtain airbags, seatbelts, steering wheels and pedestrian protection systems.

Autoliv’s filings with the SEC, including this Quarterly Report on Form 10-Q, annual reports on Form 10-K, current reports on Form 8-K, proxy statements and all of our other reports and statements, and amendments thereto, are available free of charge on our corporate website at www.autoliv.com as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC (generally the same day as the filing).

The primary exchange market for Autoliv’s securities is the New York Stock Exchange ("NYSE") where Autoliv’s common stock trades under the symbol “ALV”. Autoliv’s Swedish Depositary Receipts ("SDRs") are traded on Nasdaq Stockholm’s list for large market cap companies under the symbol “ALIV SDB”. Options in SDRs trade on Nasdaq Stockholm under the name “Autoliv SDB”. Options in Autoliv shares are traded on Nasdaq OMX PHLX and on NYSE Amex Options under the symbol “ALV”.

Autoliv’s fiscal year ends on December 31.

Non-U.S. GAAP financial measures

Some of the following discussions refer to non-U.S. GAAP financial measures: see reconciliations for “Organic sales”, “Trade working capital”, “Free cash flow”, “Net debt”, “Leverage ratio”, “Adjusted operating income”, “Adjusted operating margin” and “Adjusted earnings per share, diluted” provided below. Management believes that these non-U.S. GAAP financial measures provide supplemental information to investors regarding the performance of the Company’s business and assist investors in analyzing trends in the Company's business. Additional descriptions regarding management’s use of these financial measures are included below. Investors should consider these non-U.S. GAAP financial measures in addition to, rather than as substitutes for, financial reporting measures prepared in accordance with U.S. GAAP. These historical non-U.S. GAAP financial measures have been identified as applicable in each section of this report with a tabular presentation reconciling them to the most directly comparable U.S. GAAP financial measures. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.

EXECUTIVE OVERVIEW

The Company is pleased with its strong sales growth, supported by product launches and price increases, and that the Company outperformed LVP in all regions significantly. The operating margin impact of the strong sales growth was lower than it should be in the quarter. This is because new product launches normally have lower operating leverage initially. As production ramps up and stabilizes, operating leverage is expected to improve. Together with the Company's actions for cost reductions and price adjustments, this will give the significant full year profit improvement that the Company expects.

The operating environment in the first quarter of 2023 was, as expected, challenging, especially in Europe. The Company reported an adjusted operating margin in line with prior communication.

Other highlights from the quarter were that the Company's balance sheet and expected cash flow allowed for continued high shareholder returns, and that the Company issued its first ever green bond. The Company expects a strong full year cash flow, although its cash flow was temporarily week in the first quarter due to strong sales growth in March.

The Company saw continued updates of crash test standards and safety regulations in the U.S. and in India which will support continued increase in safety content per vehicle. The Company's market position is strong and is investing for increased production with a new textile facility in Vietnam. The Company also continues to look for ways to improve its footprint and to reduce its costs structurally.

The year has so far developed as expected. Like last year, inflationary pressure impacted the first quarter significantly, and in line with last year, the Company expects to offset this during the rest of the year through productivity, cost reduction actions and price adjustments.

This supports the Company's confidence in expecting a gradually improving adjusted operating margin, which should allow the Company to deliver a significant full year increase in cash flow and adjusted operating income and to reach the full year indications the Company set at the beginning of the year.

Financial highlights in the three months period ended March 31, 2023

Change figures below compare to the same period of the previous year, except when stated otherwise.

$2,493 net sales

17% net sales increase

21% organic sales increase (Non-U.S. GAAP measure, see reconciliation table below)

5.1% operating margin

5.3% adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below)

$0.86 EPS - 9% decrease

$0.90 adjusted EPS (Non-U.S. GAAP measure, see reconciliation table below) - 99% increase

Key business developments in the three months period ended March 31, 2023

Change figures below compare to the same period of the previous year, except when stated otherwise.

Sales increased organically (Non-U.S. GAAP measure, see reconciliation table below) by 21%, which was 15pp better than global LVP growth of 6.1% (S&P Global, April 2023). The Company outperformed significantly in all regions, mainly due to new product launches and higher prices.

Profitability in line with the Company's indication, positively impacted by price increases, organic growth and the Company's cost reduction activities. Operating income was $127 million and operating margin was 5.1%. Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) improved from $68 million to $131 million and adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below) increased from 3.2% to 5.3%, despite inflationary pressure, volatile LVP and adverse FX effects. Return on capital employed was 13.0% and adjusted return on capital employed (Non-U.S. GAAP measure, see reconciliation table below) was 13.4%.

Operating cash flow decreased from $70 million to negative $46 million, driven mainly by negative working capital effects due to the high sales growth. Free cash flow (Non-U.S. GAAP measure, see calculation table below) decreased to negative $189 million, as capex, net, increased due to capacity expansions and footprint activities. The leverage ratio (Non-U.S. GAAP measure, see calculation table below) increased from 1.4x in the fourth quarter 2022 to 1.6x, impacted by higher net debt. A dividend of $0.66 per share was paid, and 0.45 million shares were repurchased and retired in the quarter.

Business and market condition update

Supply Chain

Global light vehicle production growth year-over-year was around 6.1% (according to S&P Global April 2023) in Q1 2023, negatively impacted by industry supply chain disruptions. Industry supply chain disruptions also led to low customer demand visibility and material changes to customer call-offs with short notice, which negatively impacted our production efficiency and profitability in the quarter. The Company expects the current industry-wide supply chain disruptions to be a limiting factor for the global LVP in the first half year of 2023, while the Company expects that demand and supply will be in a better balance in the second half of 2023.

Inflation

In Q1 2023, cost pressures from labor, logistics, utilities and other items had a negative impact on our profitability. Rising raw material costs amounted to around 0.5pp in operating margin headwind in Q1 2023, which was largely offset by commercial customer recoveries. The Company expects the raw material price changes in 2023 will to a large extent be reflected in price changes in its products, albeit with delays of several months. The Company also expects significant cost pressure from broad based inflation relating to labor, logistics, utilities and other items, especially in Europe. The Company continues to execute on productivity and cost reduction activities to offset these cost pressures, and is continuing to have challenging discussions with its customers on non-raw material cost inflation.

Other matters

Direct COVID-19 related costs and governmental support in connection with the COVID-19 pandemic were immaterial in the first quarter of 2023.

The direct impact of the war in Ukraine on our business is limited. Autoliv has one facility with fewer than 20 employees in Russia. The Company's operations in Russia are currently suspended. Autoliv net assets in Russia consist of USD cash items, which amount to around $3 million. Autoliv has no operations in Ukraine.

RESULTS OF OPERATIONS

Overview

The following table shows some of the key ratios management uses internally to analyze the Company's current and future financial performance and core operations as well as to identify trends in the Company’s financial conditions and results of operations. The Company has provided this information to investors to assist in meaningful comparisons of past and present operating results and to assist in highlighting the results of ongoing core operations. These ratios are more fully explained below and should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K and the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

The Company's management uses the Return on capital employed (ROCE) and Return on total equity (ROE) measures for purposes of comparing its financial performance with the financial performance of other companies in the industry and providing useful information regarding the factors and trends affecting the Company’s business. As used by the Company, ROCE is annualized operating income and income from equity method investments relative to average capital employed. The Company believes ROCE is a useful indicator of long-term performance both absolute and relative to the Company's peers as it allows for a comparison of the profitability of the Company’s capital employed in its business relative to that of its peers.

ROE is the ratio of annualized income (loss) relative to average total equity for the periods presented. The Company’s management believes that ROE is a useful indicator of how well management creates value for its shareholders through its operating activities and its capital management.

KEY RATIOS

(Dollars in millions, except per share data)


	Three Months Ended
	or As of March 31,
	2023			2022
Total parent shareholders’ equity per share	$	30.61		$	30.43
Capital employed 1)		4,118			3,731
Net debt 2)		1,477			1,057

Trade working capital8)		1,409			1,352
Trade working capital relative to sales, %9)		14.1	%		15.9	%
Receivables outstanding relative to sales, %10)		21.1	%		21.5	%
Inventory outstanding relative to sales, %11)		9.9	%		10.7	%
Payables outstanding relative to sales, %12)		16.9	%		16.3	%

Gross margin, % 3)		15.2	%		13.6	%
Operating margin, % 4)		5.1	%		6.3	%

Return on total equity, % 5)		11.3	%		12.5	%
Return on capital employed, % 6)		13.0	%		14.6	%

Headcount at period-end 7)		71,300			64,800

1) Total equity and net debt.

2) Net debt adjusted for pension liabilities in relation to EBITDA. See tabular presentation reconciling this non-U.S. GAAP measure to U.S. GAAP below.

3) Gross profit relative to sales.

4) Operating income relative to sales.

5) Net income relative to average total equity.

6) Operating income and income from equity method investments, relative to average capital employed.

7) Employees plus temporary, hourly personnel.

8) Outstanding receivables and outstanding inventory less outstanding payables. See calculation of this non-U.S. GAAP measure in the table below.

9) Outstanding receivables and outstanding inventory less outstanding payables relative to annualized quarterly sales.

10) Outstanding receivables relative to annualized quarterly sales.

11) Outstanding inventory relative to annualized quarterly sales.

12) Outstanding payables relative to annualized quarterly sales.

three months period ended March 31, 2023 COMPARED WITH three months period ended March 31, 2022

Consolidated Sales Development

(dollars in millions)


	Three Months Ended March 31,							Components of change in net sales
	2023		2022		Reported change			Currency effects 1)			Organic 3)
Airbags, Steering Wheels and Other2)	$	1,673	$	1,381		21	%		(3.6	)%		25	%
Seatbelt products 2)		820		744		10	%		(3.5	)%		14	%
Total	$	2,493	$	2,124		17	%		(3.6	)%		21	%

Asia	$	936	$	857		9.2	%		(7.8	)%		17	%
Whereof: China		453		447		1.2	%		(7.2	)%		8.4	%
Asia excl. China		483		410		18	%		(8.4	)%		26	%
Americas		831		692		20	%		2.4	%		18	%
Europe		725		575		26	%		(4.6	)%		31	%
Total	$	2,493	$	2,124		17	%		(3.6	)%		21	%

1) Effects from currency translations.

2) Including Corporate and Other sales.

3) Non-U.S. GAAP measure.

Sales by product - Airbags, Steering Wheels and Other

All major product categories increased organically (Non-U.S. GAAP measure) in the quarter. The largest contributor to the increase was inflatable curtains and steering wheels, followed by side airbags and passenger airbags.

Sales by product - Seatbelts

The main contributor to Seatbelt products organic growth (Non-U.S. GAAP measure) was Europe, followed by Asia excluding China and Americas.

Sales by region

The Company's global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 21% compared to the global LVP increase of 6.1% (according to S&P Global, April 2023). The 15pp outperformance was driven by new product launches, price increases and a positive geographical LVP mix development. Autoliv outperformed LVP by around 16pp in China, by around 14pp in Europe and in Asia excl. China and by around 7pp in Americas.

First quarter of 2023 organic growth1)


	Americas	Europe	China	Asia excl. China	Global
Autoliv	18%	31%	8.4%	26%	21%
Main growth drivers	Honda, Nissan, GM	VW, Stellantis, Renault	Lixiang Auto, Honda, BYD	Hyundia, Toyota, Nissan	Honda, Hyundai, VW
Main decline drivers	Ford, BMW	Mitsubishi	Nissan, GM, Xpeng		Ford, Xpeng, Great Wall

1) Non-U.S. GAAP measure.

Light Vehicle Production Development

Change three months period ended March 31, 2023 versus three months period ended March 31, 2022


	Americas	Europe	China	Asia excl. China	Global
LVP1)	11 %	17 %	(7.5)%	12 %	6.1 %

1) Source: S&P Global, April 2023.

Earnings


	Three Months Ended March 31,
(Dollars in millions, except per share data)	2023			2022			Change
Net Sales	$	2,493		$	2,124			17	%
Gross profit		379			288			32	%
% of sales		15.2	%		13.6	%		1.6	pp
S, G&A		(132	)		(115	)		14	%
% of sales		(5.3	)%		(5.4	)%		0.1	pp
R, D&E, net		(116	)		(107	)		8.7	%
% of sales		(4.7	)%		(5.0	)%		0.4	pp
Amortization of Intangibles		(0	)		(1	)		(70	)%
Other income (expense), net		(4	)		70		n/a
Operating income		127			134			(5.4	)%
% of sales		5.1	%		6.3	%		(1.2)pp
Adjusted operating income1)		131			68			93	%
% of sales		5.3	%		3.2	%		2.1	pp
Financial and non-operating items, net		(18	)		(15	)		22	%
Income before taxes		109			119			(8.8	)%
Income taxes		(34	)		(36	)		(5.0	)%
Tax rate		31.6	%		30.3	%		1.3	pp
Net income		74			83			(11	)%
Earnings per share, diluted2)		0.86			0.94			(8.8	)%
Adjusted earnings per share, diluted1,2)		0.90			0.45			99	%

1) Non-U.S. GAAP measure, excluding effects from capacity alignment, including gain on sale of property in the first quarter of 2022, and antitrust related matters.

2) Assuming dilution, when applicable, and net of treasury shares.

First quarter of 2023 development

Gross profit increased by $91 million and the gross margin increased by 1.6pp compared to the same quarter 2022. The gross profit increase was primarily driven by price increases, volume growth and lower costs for premium freight. This was partly offset by increased costs for personnel to manage the high customer call-off volatility as well as to prepare for higher sales levels expected in coming quarters. Other adverse effects were higher costs for raw materials and unfavorable foreign currency translation effects.

S,G&A costs increased by $16 million compared to the prior year, mainly due to increased costs for personnel and projects, partly offset by positive currency translation effects. S,G&A costs in relation to sales decreased from 5.4% to 5.3%.

R,D&E, net costs increased by around $9 million compared to the prior year, mainly due to higher costs for personnel, partly offset by positive foreign currency translation effects. R,D&E, net, in relation to sales decreased from 5.0% to 4.7%.

Other income (expense), net was negative $4 million compared to $70 million in the prior year. The prior year was positively impacted by around $80 million from the sale of a property in Japan.

Operating income decreased by $7 million compared to the same period in 2022, mainly as a consequence of the change in Other income (expense) and the higher costs for S,G&A and R,D&E, net, partly offset by the higher gross profit.

Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) increased by $63 million compared to the prior year, mainly due to higher gross profit, partly offset by the higher costs for S,G&A and R,D&E, net.

Financial and non-operating items, net, was negative $18 million compared to negative $15 million a year earlier, mainly due to increased interest expense as an effect of higher debt and higher interest rates.

Income before taxes decreased by $11 million compared to the prior year, mainly due to the lower operating income.

Tax rate was 31.6% compared to 30.3% in the same period last year. Discrete tax items, net, increased the tax rate this quarter by 0.8pp. Discrete tax items increased the tax rate by 0.6pp in the same period last year.

Earnings per share, diluted decreased by $0.08 compared to a year earlier. The main drivers were $0.52 from capacity alignments and $0.05 from taxes, partly offset by $0.51 from higher adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below).

LIQUIDITY AND CAPITAL RESOURCES

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. The Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.

First quarter of 2023 development

Trade working capital (Non-U.S. GAAP measure, see calculation table below) increased by $57 million compared to the same period last year, where the main drivers were $282 million in higher receivables and $73 million in higher inventories, partly offset by $298 million in higher accounts payables.

Operating cash flow decreased by $116 million to negative $46 million compared to the same period last year, mainly due to negative working capital effects.

Capital expenditure, net increased by $126 million, mainly due to the impact on the prior year of $95 million from the sale of property, plant and equipment, but also due to increased investments related to capacity expansions and footprint activities. Capital expenditure, net in relation to sales was 5.7% vs. 0.8% a year earlier.

Free cash flow (Non-U.S. GAAP measure, see calculation table below) was negative $189 million, compared to $53 million in the same period prior year. The decline was due to the lower operating cash flow and higher capital expenditure, net.

Cash conversion (Non-U.S. GAAP measure) defined as free cash flow (Non-U.S. GAAP measure, see calculation table below) in relation to net income, was not meaningful in the period as free cash flow was negative.

Net debt (Non-U.S. GAAP measure, see reconciliation table below) was $1,477 million as of March 31, 2023, which was $420 million higher than a year earlier.

Liquidity position. As of March 31, 2023, our cash balance was around $0.7 billion, and including committed, unused loan facilities, our liquidity position was around $1.8 billion.

Leverage ratio (Non-U.S. GAAP measure, see calculation table below). As of March 31, 2023, the Company had a leverage ratio of 1.6x compared to 1.4x as of March 31, 2022, as the net debt (Non-U.S. GAAP measure, see reconciliation table below) increased proportionally more than the 12 months trailing adjusted EBITDA (Non-U.S. GAAP measure, see calculation table below) increased.

Total equity decreased by $33 million compared to March 31, 2022. This is mainly due to $225 million in dividend payment and stock repurchases of $139 million as well as $106 million in adverse currency translation effects, partly offset by $416 million from net income.

NON-U.S. GAAP MEASURES

The Company believes that comparability between periods is improved through the exclusion of certain items. To assist investors in understanding the operating performance of Autoliv's business, it is useful to consider certain U.S. GAAP measures exclusive of these items. Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.

Reconciliation of U.S. GAAP financial measures to “Adjusted operating income”, “Adjusted operating margin” and “Adjusted Earnings per share, diluted”

(Dollars in millions, except per share data)


	Three Months Ended March 31, 2023									Three Months Ended March 31, 2022
	Reported U.S. GAAP			Adjustments1)			Non-U.S. GAAP			Reported U.S. GAAP			Adjustments1)			Non-U.S. GAAP
Operating income	$	127		$	4		$	131		$	134		$	(66	)	$	68
Operating margin, %		5.1	%		0.2	%		5.3	%		6.3	%		(3.1	)%		3.2	%
Earnings per share, diluted	$	0.86		$	0.03		$	0.90		$	0.94		$	(0.49	)	$	0.45

1) Effects from capacity alignments, including gain on sale of property in the first quarter of 2022, and antitrust related matters.

Items included in Non-U.S. GAAP adjustments

(Dollars in millions, except per share data)


	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
	Millions			Per share			Millions			Per share
Capacity alignments	$	3		$	0.04		$	(66	)	$	(0.76	)
Legal costs		1			0.01			—			—
Total adjustments to operating income		4			0.05			(66	)		(0.76	)
Tax on non-U.S. GAAP adjustments1)		(1	)		(0.01	)		23			0.26
Total adjustments to net income	$	3		$	0.03		$	(43	)	$	(0.49	)

1) The tax is calculated based on the tax laws in the respective jurisdiction(s) of the adjustment(s).

The Company uses the non-U.S. GAAP measure “Trade working capital,” as defined in the table below, in its communications with investors and for management’s review of the development of the trade working capital cash generation from operations. The reconciling items used to derive this measure are, by contrast, managed as part of the Company’s overall cash and debt management, but they are not part of the responsibilities of day-to-day operations’ management.

Calculation of “Trade working capital”

(Dollars in millions)


	March 31, 2023			December 31, 2022			March 31, 2022
Receivables, net	$	2,106		$	1,907		$	1,824
Inventories, net		986			969			913
Accounts payable		(1,683	)		(1,693	)		(1,385	)
Trade working capital	$	1,409		$	1,183		$	1,352

The non-U.S. GAAP measure “Net debt” is also used in the non-U.S. GAAP measure “Leverage ratio”. Management uses this measure to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. For details on leverage ratio refer to the table below.

Reconciliation of U.S. GAAP financial measure to “Net debt”

(Dollars in millions)


	March 31, 2023			December 31, 2022			March 31, 2022
Short-term debt	$	577		$	711		$	347
Long-term debt		1,601			1,054			1,647
Total debt		2,179			1,766			1,994
Cash and cash equivalents		(713	)		(594	)		(938	)
Debt issuance cost/Debt-related derivatives, net		12			12			1
Net debt	$	1,477		$	1,184		$	1,057

Management uses the non-U.S. GAAP measure “Leverage Ratio” to analyze the amount of debt the Company can incur under its debt policy. Management believes that this policy also provides guidance to credit and equity investors regarding the extent to which the Company would be prepared to leverage its operations. The Company's long-term target for the leverage ratio (sum of net debt plus pension liabilities divided by EBITDA) is 1.0x with the aim to operate within the range of 0.5x to 1.5x. For details and calculation of leverage ratio, refer to the table below.

Calculation of “Leverage ratio”

(Dollars in millions)


	March 31, 2023			December 31, 2022			March 31, 2022
Net debt1)	$	1,477		$	1,184		$	1,057
Pension liabilities		159			154			172
Debt per the Policy		1,636			1,338			1,229

Net income2)		416			425			363
Income taxes 2)		176			178			153
Interest expense, net2,3)		60			54			53
Other non-operating items, net2)		4			5			5
Income from equity method investments2)		(4	)		(3	)		(2	)
Depreciation and amortization of intangibles2)		359			363			391
Capacity alignments and antitrust related matters2)		10			(61	)		(58	)
EBITDA per the Policy (Adjusted EBITDA)	$	1,021		$	961		$	905
Leverage ratio		1.6			1.4			1.4

1) Net debt (non-U.S. GAAP measure) is short- and long-term debt and debt-related derivatives, less cash and cash equivalents.

2) Latest 12-months.

3) Interest expense, net including cost for extinguishment of debt, if any, less interest income.

Management uses the non-U.S. GAAP measure free cash flow to analyze the amount of cash flow being generated by the Company’s operations after capital expenditure, net. This measure indicates the Company’s cash flow generation level that enables strategic value creation options such as dividends or acquisitions. For details on the calculation of free cash flow, see the table below.

Calculation of “Free Cash Flow”

(Dollars in millions)


	Three Months Ended March 31,
	2023			2022
Net income	$	74		$	83
Changes in operating working capital		(202	)		(18	)
Depreciation and amortization		92			95
Gain on divestiture of property		—			(80	)
Other, net		(10	)		(11	)
Operating cash flow		(46	)		70
Capital expenditure, net		(143	)		(17	)
Free cash flow1)	$	(189	)	$	53

1) Operating cash flow less Capital expenditures, net.

Headcount


	March 31, 2023			December 31, 2022			March 31, 2022
Total headcount		71,300			69,100			64,800
Whereof:
Direct personnel in manufacturing		52,700			50,600			47,000
Indirect personnel		18,600			18,400			17,800
Temporary personnel		11.1	%		10.6	%		9.4	%

By March 31, 2023, total headcount increased by 6,500 compared to a year earlier. The indirect workforce increased by 4.5% while the direct workforce increased by 12%, as sales grew organically by 21% compared to a year earlier. The increase also reflects preparations for the expected sales growth in coming quarters.

Compared to December 31, 2022, total headcount increased by around 2,200, direct workforce increased by around 2,100 and the indirect workforce increased by around 200.

Full year 2023 indications

The Company's outlook indications for 2023 are mainly based on its customer call-offs, a full year 2023 global LVP growth of around 3%, that the Company achieves its targeted cost compensation effects and that customer call-off volatility is reduced.


Financial measure		Full year indication
Organic sales growth		Around 15%
Foreign currency impact on net sales		Around 1% negative
Adjusted operating margin 1)		Around 8.5%-9%
Tax rate 2)		Around 32%
Operating cash flow 3)		Around $900 million
Capital expenditures, net % of sales		Around 6%
1) Excluding effects from capacity alignments, antitrust related matters and other discrete items.
2) Excluding unusual tax items.
3) Excluding unusual items.

The forward-looking non-U.S. GAAP financial measures above are provided on a non-U.S. GAAP basis. The Company has not provided a U.S. GAAP reconciliation of these measures because items that impact these measures, such as costs and gains related to capacity alignments and antitrust matters, cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and the Company is unable to determine the probable significance of the unavailable information.

Other recent events

Key launches in the three months period ended March 31, 2023

•

Fisker Ocean: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Knee Airbag, Steering Wheel, Front Center Airbag, Seatbelts.

•

Subaru Impreza/Crosstrek: Driver/Passenger Airbags, Side Airbags, Seatbelts, Pedestrian Airbag.

•

Buick Electra E5: Driver/Passenger Airbags, Side Airbags, Steering Wheel, Seatbelts.

•

Jeep Avenger: Driver/Passenger Airbags, Side Airbags, Steering Wheel, Seatbelts.

•

Hyundai Kona: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Front Center Airbag.

•

Havel H-Dog: Side Airbags, Seatbelts.

•

Xpeng P7i: Driver/Passenger Airbags, Side Airbags, Steering Wheel, Seatbelts.

•

Toyota Prius: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Seatbelts.

•

Chevrolet Trax: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Seatbelts.

Other Items

•

On February 17, 2023, Autoliv announced the renewal for one year of its €3 billion guaranteed euro medium term note program, originally established on April 11, 2019.

•

On March 9, 2023, Autoliv announced it had priced a 5-year bond offering of EUR 500 million in the Eurobond market. The notes were issued as green bonds on March 15 at a coupon of 4.25%.

•

On April 20, 2023, Autoliv announced its plans to expand to Vietnam, and build a new state of the art airbag cushion and fabric plant in Vietnam. The investment in the new textile facility is in response to customer demands and is intended to meet expanded future airbag production needs for the growing Asia market.

•

In Q1 2023, Autoliv repurchased and retired 0.45 million shares of common stock at an average price of $92.19 per share under the Autoliv 2022-2024 stock purchase program.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2023, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that were provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.

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.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of our business, we are subject to legal proceedings brought by or against us and our subsidiaries.

See Part I, Item 1, "Financial Statements, Note 9 Contingent Liabilities" of this Quarterly Report on Form 10-Q for a summary of certain ongoing legal proceedings. Such information is incorporated into this Part II, Item 1—"Legal Proceedings" by reference.

ITEM 1A. RISK FACTORS

As of March 31, 2023, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.

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

Stock repurchase program

The following table provides information with respect to common stock repurchases by the Company during the three months period ended March 31, 2023.


	New York Stock Exchange (NYSE)
Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (USD) (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)		Maximum Number of Shares that Yet May Be Purchased Under the Plans or Programs (3)
January 1-31, 2023		—	$	—		1,440,572		15,559,428
February 1-28, 2023		219,866	$	90.98		1,660,438		15,339,562
March 1-31, 2023		230,293	$	93.38		1,890,731		15,109,269

(1) The repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through Rule 10b5-1 plans. For accounting purposes, shares repurchased under our stock repurchase programs are recorded based upon the settlement date of the applicable trade.

(2) Average price paid per share includes costs associated with the repurchases.

(3) On November 16, 2021, the Company announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $1.5 billion or up to 17 million common shares, whichever comes first, between January 2022 and the end of 2024.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable.

ITEM 6. EXHIBITS


Exhibit No.		Description

3.1		Autoliv’s Restated Certificate of Incorporation, as amended, incorporated herein by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2015).

3.2		Autoliv’s Third Restated By-Laws, incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-12933, filing date December 18, 2015).

4.1		Indenture, dated March 30, 2009, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to Autoliv’s Registration Statement on Form 8-A (File No. 001-12933, filing date March 30, 2009).

4.2		Second Supplemental Indenture (including Form of Global Note), dated March 15, 2012, between Autoliv, Inc. and U.S. Bank National Association, as trustee, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-12933, filing date March 15, 2012).

4.3		Form of Note Purchase and Guaranty Agreement dated April 23, 2014, among Autoliv ASP, Inc., Autoliv, Inc. and the purchasers named therein, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 25, 2014).

4.4		Amendment and Waiver 2014 Note Purchase and Guaranty Agreement, dated May 24, 2018, among Autoliv, Inc., Autoliv ASP, Inc. and the noteholders named therein, incorporated herein by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).

4.5		General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. representing common shares in Autoliv, Inc., effective as of May 30, 2018, with Skandinaviska Enskilda Banken AB (publ) serving as a custodian, incorporated herein by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).

4.6		Agency Agreement dated June 26, 2018 among Autoliv, Inc., Autoliv ASP, Inc. and HSBC Bank PLC, incorporated herein by reference to Exhibit 4.6 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date July 27, 2018).

4.7		Base Listing Particulars Agreement, dated February 22, 2022, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.12 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2022).

4.8		Amended and Restated Programme Agreement, dated February 22, 2022, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.13 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2022).

4.9		Amended and Restated Agency Agreement, dated February 22, 2022, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.14 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 22, 2022).

4.10		Base Listing Particulars Agreement, dated February 17, 2023, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-12933, filing date March 16, 2023).

4.11		Amended and Restated Programme Agreement, dated February 17, 2023, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-12933, filing date March 16, 2023).

10.1*+		Form of Employee 2023 restricted stock units grant agreement promised under Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated.

10.2*+		Form of Employee 2023 performance share units grant agreement promised under the Autoliv, Inc. 1997 Stock Incentive Plan, as amended and restated.

31.1*		Certification of the Chief Executive Officer of Autoliv, 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 Autoliv, 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 Autoliv, 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 Autoliv, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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* Filed herewith.

+ Management contract or compensatory plan.

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: April 21, 2023

AUTOLIV, INC.

(Registrant)


By:		/s/ Fredrik Westin
		Fredrik Westin
		Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)