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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 September 30, 2025

      ☐

      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 D5
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 October 13, 2025, there were 75,965,348 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; 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; geopolitical instability, including the ongoing war between Russia and Ukraine and the hostilities in the Middle East; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment, restructuring, 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; 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 judgments 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, including changes in trade policy and tariffs; our ability to meet our sustainability targets, goals and commitments; political conditions; dependence on and relationships with customers and suppliers; the conditions necessary to hit our financial targets; 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, 2024 filed with the SEC on February 20, 2025.

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

	Consolidated Statements of Income (unaudited)		4
	Consolidated Statements of Comprehensive Income (unaudited)		5
	Condensed Consolidated Balance Sheets (unaudited)		6
	Consolidated Statements of Cash Flows (unaudited)		7
	Consolidated Statements of Total Equity (unaudited)		8
	Notes to the Condensed Consolidated Financial Statements (unaudited)		10
		Note 1. Basis of Presentation	10
		Note 2. New Accounting Standards	11
		Note 3. Fair Value Measurements	12
		Note 4. Income Taxes	14
		Note 5. Inventories	14
		Note 6. Restructuring	14
		Note 7. Product-Related Liabilities	15
		Note 8. Contingent Liabilities	15
		Note 9. Earnings Per Share	18
		Note 10. Revenue Disaggregation	18
		Note 11. Segment Information	18
		Note 12. Subsequent Events	19

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			35
ITEM 4. CONTROLS AND PROCEDURES			35
PART II - OTHER INFORMATION			36
ITEM 1. LEGAL PROCEEDINGS			36
ITEM 1A. RISK FACTORS			36
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			37
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			37
ITEM 4. MINE SAFETY DISCLOSURES			37
ITEM 5. OTHER INFORMATION			37
ITEM 6. EXHIBITS			38
SIGNATURE			39

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net sales	$	2,706		$	2,555		$	7,998		$	7,774
Cost of sales1)		(2,184	)		(2,095	)		(6,496	)		(6,398	)
Gross profit		522			459			1,502			1,377
Selling, general and administrative expenses		(137	)		(129	)		(427	)		(399	)
Research, development and engineering expenses, net		(117	)		(96	)		(319	)		(325	)
Other income (expense), net2)		(1	)		(9	)		13			(27	)
Operating income		267			226			769			626
Income from equity method investment		2			2			4			5
Interest income		3			3			7			10
Interest expense		(25	)		(27	)		(77	)		(81	)
Other non-operating items, net		(7	)		(7	)		(10	)		(7	)
Income before income taxes		240			197			693			554
Income tax expense		(65	)		(58	)		(183	)		(149	)
Net income3)		175			139			510			404
Less: Net income attributable to non-controlling interest		0			0			1			1
Net income attributable to controlling interest	$	175		$	138		$	509		$	403

Net earnings per share – basic	$	2.29		$	1.75		$	6.61		$	4.99
Net earnings per share – diluted	$	2.28		$	1.74		$	6.59		$	4.98

Weighted average number of shares outstanding, net of treasury shares (in millions)		76.4			79.2			77.0			80.7
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions)		76.7			79.3			77.3			80.9

Cash dividend per share – declared4)	$	0.00		$	0.68		$	2.25		$	2.04
Cash dividend per share – paid	$	0.85		$	0.68		$	2.25		$	2.04

1) Including a gain on sale of property in China of $6 million in the first quarter of 2025. Including a supplier compensation of $13 million in the third quarter of 2025.

2) Including a cumulative translation gain of $11 million related to the sale of the Russian entity in the first quarter of 2025.

3) For the three months periods ended September 30, 2025 and 2024, the aggregate transaction gain (loss) included in net income for the period was a loss of $7 million and a loss of $5 million, respectively. For the nine months periods ended September 30, 2025 and 2024, the aggregate transaction gain (loss) included in net income for the period was a loss of $21 million and a loss of $7 million, respectively.

4) In May 2025, the Company declared a dividend per share of $0.70 for the second quarter of 2025, and in June 2025, the Company declared a dividend per share of $0.85 for the third quarter of 2025.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net income	$	175		$	139		$	510		$	404
Other comprehensive income (loss) before tax:
Change in cumulative translation adjustments1)		0			36			125			(70	)
Net change in unrealized components of defined benefit plans		4			(1	)		6			8
Other comprehensive income (loss), before tax		4			34			131			(62	)
Tax effect allocated to other comprehensive income (loss)		(1	)		0			(1	)		(2	)
Other comprehensive income (loss), net of tax		3			35			129			(63	)
Comprehensive income		179			173			640			341
Less: Comprehensive income (loss) attributable to non-controlling interest		0			1			2			1
Comprehensive income attributable to controlling interest	$	178		$	173		$	638		$	340

1) A cumulative translation gain of $11 million related to the sale of the Russian entity in the first quarter of 2025 has been recycled and reported as part of the net change of cumulative translation adjustment in the Comprehensive Income Statement and Equity Statement. In the Statement of Income this gain has been reported as part of Other income (expense), net.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in millions)


	As of
	September 30, 2025			December 31, 2024
Assets
Cash and cash equivalents	$	225		$	330
Receivables, net		2,357			1,993
Inventories, net		1,036			921
Prepaid expenses and accrued income		226			167
Other current assets		102			72
Total current assets		3,946			3,483
Property, plant and equipment, net		2,402			2,239
Operating lease right-of-use assets		167			158
Goodwill and intangible assets, net		1,387			1,375
Other non-current assets		561			548
Total assets		8,463			7,804

Liabilities and equity
Short-term debt		654			387
Accounts payable1)		1,889			1,799
Accrued expenses		1,172			1,056
Operating lease liabilities - current		44			41
Other current liabilities		383			351
Total current liabilities		4,141			3,633
Long-term debt		1,374			1,522
Pension liability		167			153
Operating lease liabilities - non-current		118			118
Other non-current liabilities		105			92
Total non-current liabilities		1,763			1,885
Common stock		79			80
Additional paid-in capital		874			910
Retained earnings		2,275			2,105
Accumulated other comprehensive loss2)		(530	)		(659	)
Treasury stock		(148	)		(160	)
Total controlling interest's equity		2,549			2,276
Non-controlling interest		10			10
Total equity		2,559			2,285
Total liabilities and equity	$	8,463		$	7,804

1) Amount of obligations confirmed under the Company's Supplier Finance Program that remains unpaid is reported as Accounts Payable in the Condensed Consolidated Balance Sheets. Amount of obligations outstanding as of September 30, 2025 and December 31, 2024 are $338 million and $335 million, respectively.

2) Including cumulative translation adjustment as of September 30, 2025 and December 31, 2024 to the amount of $(500) million and $(629) million, respectively.

See Notes to the Condensed Consolidated Financial Statements (unaudited).

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in millions)


	Nine Months Ended September 30,
	2025			2024
Operating activities
Net income	$	510		$	404
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		299			289
Deferred income taxes		(2	)		(3	)
Undistributed earnings from equity method investments, net of dividends		(0	)		(2	)
Gain on divestiture of property		(6	)		—
Other, net		28			5
Net change in operating assets and liabilities:
Receivables and other assets, gross		(293	)		6
Inventories, gross		(52	)		1
Accounts payable and accrued expenses		117			(23	)
Income taxes		11			(39	)
Net cash provided by operating activities		613			639

Investing activities
Expenditures for property, plant and equipment		(323	)		(440	)
Proceeds from sale of property, plant and equipment		10			9
Net cash used in investing activities		(313	)		(431	)

Financing activities
Net increase (decrease) in short-term debt		247			85
Proceeds from issuance of long-term debt		122			581
Repayment of long-term debt		(311	)		(306	)
Dividends paid		(173	)		(164	)
Stock repurchased		(201	)		(450	)
Common stock options exercised		0			0
Dividends paid to non-controlling interest		(1	)		(5	)
Net cash used in financing activities		(316	)		(259	)
Effect of exchange rate changes on cash and cash equivalents		(89	)		(33	)
Decrease in cash and cash equivalents		(105	)		(84	)
Cash and cash equivalents at beginning of period		330			498
Cash and cash equivalents at end of period		225			415

See Notes to Condensed Consolidated Financial Statements (unaudited).

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, 2024	$	80		$	910		$	2,105		$	(659	)	$	(160	)	$	2,276		$	10		$	2,285
Comprehensive Loss:
Net income								167									167			0			167
Foreign currency translation adjustment											10						10			0			10
Pension liability											(3	)					(3	)					(3	)
Total Comprehensive Income		—			—			167			7			—			174			0			175
Repurchased and retired shares		(1	)		(10	)		(40	)								(50	)					(50	)
Stock-based compensation														7			7						7
Cash dividends declared								(54	)								(54	)					(54	)
Other								(1	)								(1	)					(1	)
Balances at March 31, 2025	$	80		$	900		$	2,176		$	(652	)	$	(153	)	$	2,351		$	10		$	2,361
Comprehensive Loss:
Net income								167									167			0			168
Foreign currency translation adjustment											114						114			0			114
Pension liability											5						5						5
Total Comprehensive Loss		—			—			167			119			—			286			1			287
Repurchased and retired shares		(1	)		(10	)		(41	)								(51	)					(51	)
Stock-based compensation														2			2						2
Cash dividends declared								(119	)								(119	)					(119	)
Other								(1	)
Balances at June 30, 2025	$	79		$	890		$	2,183		$	(534	)	$	(151	)	$	2,469		$	11		$	2,480
Comprehensive Income:
Net income								175									175			0			175
Foreign currency translation adjustment											0						0			(0	)		0
Pension liability											3						3						3
Total Comprehensive Income (loss)		—			—			175			3			—			178			0			179
Repurchased and retired shares		(1	)		(16	)		(83	)								(100	)					(100	)
Stock-based compensation														3			3						3
Dividends paid to non-controlling interest on subsidiary shares																				(1	)		(1	)
Cash dividends declared								1
Other								(1	)								(1	)					(1	)
Balances at September 30, 2025	$	79		$	874		$	2,275		$	(530	)	$	(148	)	$	2,549		$	10		$	2,559


	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, 2023	$	88		$	1,044		$	2,289		$	(496	)	$	(368	)	$	2,557		$	13		$	2,570
Comprehensive Income:
Net income								126									126			0			127
Foreign currency translation adjustment											(46	)					(46	)		(0	)		(47	)
Pension liability											5						5						5
Total Comprehensive Income		—			—			126			(41	)		—			85			0			85
Repurchased and retired shares		(1	)		(26	)		(134	)								(161	)					(161	)
Stock-based compensation														4			4						4
Cash dividends declared								(56	)								(56	)					(56	)
Balances at March 31, 2024	$	86		$	1,018		$	2,226		$	(537	)	$	(364	)	$	2,429		$	13		$	2,442
Comprehensive Income:
Net income								138									138			0			139
Foreign currency translation adjustment											(59	)					(59	)		(0	)		(59	)
Pension liability											2						2						2
Total Comprehensive Income		—			—			138			(56	)		—			82			0			83
Repurchased and retired shares		(1	)		(25	)		(136	)								(162	)					(162	)
Stock-based compensation														4			4						4
Dividends paid to non-controlling interest on subsidiary shares																	0			(1	)		(1	)
Cash dividends declared								(55	)								(55	)					(55	)
Balances at June 30, 2024	$	85		$	993		$	2,174		$	(593	)	$	(360	)	$	2,298		$	13		$	2,311
Comprehensive Income:
Net income								138									138			0			139
Foreign currency translation adjustment											35						35			0			36
Pension liability											(1	)					(1	)					(1	)
Total Comprehensive Income		—			—			138			34			—			173			1			173
Repurchased and retired shares		(1	)		(25	)		(105	)								(131	)					(131	)
Stock-based compensation														2			2						2
Dividends paid to non-controlling interest on subsidiary shares																				(4	)		(4	)
Cash dividends declared								(54	)								(54	)					(54	)
Balances at September 30, 2024	$	84		$	968		$	2,154		$	(559	)	$	(358	)	$	2,288		$	10		$	2,298

See Notes to the Condensed Consolidated Financial Statements (unaudited).

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

September 30, 2025

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, 2025.

The Condensed Consolidated Balance Sheet as of December 31, 2024 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, 2024 filed with the SEC on February 20, 2025.

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

None.

Accounting standards issued but not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures as well as improve the effectiveness of income tax disclosures. The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The amendments in this update also require that all entities disclose on an annual basis certain detailed information about income taxes paid. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company has concluded that ASU 2023-09 will significantly increase the income tax disclosures to its financial statements. The Company will adopt the amendments in this update prospectively upon the effective date.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses, to improve financial reporting by requiring additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The amendments in ASU 2024-03 do not change or remove current expense disclosure requirements. The amendments require that at each interim and annual reporting period an entity should disclose the amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 1, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or (2) retrospectively to any or all periods presented in the financial statements. The Company is currently assessing the impact that ASU 2024-03 will have on its financial statements and will adopt the amendments in this update prospectively upon the effective date.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Targeted improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounted for under Subtopic 350-40. ASU 2025-06 removes all references to prescriptive and sequential software development stages throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1) Management has authorized and committed to funding the software project and 2) It is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in ASU 2025-06 permits entities to use either 1) a prospective transition approach, 2) a modified transition approach, or 3) a retrospective transition approach. The Company is currently assessing the impact that ASU 2025-06 will have on its financial statements and expects to adopt the amendments in this update using the prospective transition approach. The Company expects that its capitalization of internal-use software costs will not change significantly under the amendments in ASU 2025-06.

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 includes 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 of its derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 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 September 30, 2025 or December 31, 2024 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 September 30, 2025 and December 31, 2024 were foreign exchange swaps.

For the three months periods ended September 30, 2025 and 2024, the gains or losses recognized in other non-operating items, net were a loss of $32 million and a loss of $1 million, respectively, for derivative instruments not designated as hedging instruments. For the nine months periods ended September 30, 2025 and 2024, the gains or losses recognized in other non-operating items, net were a gain of $54 million and a loss of $11 million, respectively. The realized part of the gains or losses referred to above is reported under financing activities in the statement of cash flows.

For the three months periods ended September 30, 2025 and 2024, the gains or losses recognized as interest expense were immaterial and a gain of $4 million, respectively. For the nine months periods ended September 30, 2025 and 2024, the gains or losses recognized as interest expense were a loss of $5 million and a loss of $1 million, respectively.

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
	September 30, 2025									December 31, 2024
				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	$	3,366	1)	$	41	2)	$	6	3)	$	2,916	4)	$	22	5)	$	42	6)
Total derivatives not designated as hedging instruments	$	3,366		$	41		$	6		$	2,916		$	22		$	42

1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $3,366 million.

2) Net amount after deducting for offsetting swaps under ISDA agreements is $41 million.

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

4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $2,916 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 $42 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.

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


	As of
	September 30, 2025				December 31, 2024
	Carrying value1)		Fair value		Carrying value1)		Fair value
Long-term debt
Bonds	$	1,360	$	1,389	$	1,512	$	1,527
Loans		14		14		10		10
Total long-term debt		1,374		1,403		1,522		1,537

Short-term debt
Short-term portion of long-term debt		285		289		273		275
Overdrafts and other short-term debt		369		369		114		114
Total short-term debt	$	654	$	658	$	387	$	389

1) Debt as reported in balance sheet.

Assets and liabilities measured at fair value on a non-recurring 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 nine months period ended September 30, 2025, 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 September 30, 2025 was 26.9% compared to 29.6% for the three months period ended September 30, 2024. Discrete tax items, net for the three months period ended September 30, 2025 had a favorable impact of 1.3%. Discrete tax items, net for the three months period ended September 30, 2024 had a favorable impact of 1.2%.

The effective tax rate for the nine months period ended September 30, 2025 was 26.4% compared to 27.0% for the nine months period ended September 30, 2024. Discrete tax items, net for the nine months period ended September 30, 2025 had a favorable impact of 1.8%. Discrete tax items, net for the nine months period ended September 30, 2024 had a favorable impact of 2.8%.

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 2021. 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 September 30, 2025, 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 nine months period ended September 30, 2025, the Company recorded a net increase of $3 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. In addition, the Company recorded in the nine months period ended September 30, 2025 a net decrease of $9 million to income tax reserves for unrecognized tax benefits based on tax positions taken in prior years, mainly due to the settlement of tax audits and the expiration of the statute of limitations in various jurisdictions.

Of the total unrecognized tax benefits of $39 million recorded as of September 30, 2025, $11 million is classified as current tax payable within Other current liabilities and $27 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
	September 30, 2025			December 31, 2024
Raw materials	$	481		$	418
Work in progress		314			295
Finished products		326			290
Inventories		1,122			1,003
Inventory valuation reserve		(85	)		(82	)
Total inventories, net of reserve	$	1,036		$	921

6. RESTRUCTURING

As of September 30, 2025, the majority of the restructuring reserve balance of $101 million is attributed to structural cost reduction program activities initiated in Europe in 2023. The main part of the remaining balance for the activities initiated in Europe in 2023 is expected to be concluded in 2026.

No material restructuring initiatives were entered into during the three and nine months periods ended September 30, 2025. Provisions for the three and nine months periods ended September 30, 2024 related to the restructuring activities in Europe. Cash payments for the three and nine months periods ended September 30, 2025 and September 30, 2024 mainly related to the restructuring activities in Europe that were initiated prior to 2024.

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 September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Reserve at beginning of the period	$	117		$	189		$	151		$	213
Provision - charge		2			9			4			22
Provision - reversal		0			(1	)		(0	)		(1	)
Cash payments		(17	)		(19	)		(67	)		(49	)
Translation difference		(0	)		8			14			1
Reserve at end of the period	$	101		$	187		$	101		$	187

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 8. Contingent Liabilities below.

For the three months period ended September 30, 2025, new provisions related to recall and warranty related issues and cash payments mainly related to warranty related issues. For the three months period ended September 30, 2024, cash payments mainly related to warranty and recall related issues. For the nine months period ended September 30, 2025, new provisions mainly related to warranty and recall related issues and cash payments mainly related to warranty related issues. For the nine months period ended September 30, 2024, provision reversals and cash payments primarily related to recall related issues.

As of September 30, 2025, the reserve for product related liabilities mainly consisted of 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. The Company’s product-related liabilities as of September 30, 2025 are partly covered by insurance. Insurance receivables are included within other current assets and other non-current assets on the Condensed Consolidated Balance Sheets. As of September 30, 2025, the Company had total insurance receivables of $15 million.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Reserve at beginning of the period	$	69		$	73		$	65		$	96
Net change in reserve		25			6			40			(2	)
Cash payments		(9	)		(3	)		(23	)		(17	)
Translation difference		(0	)		1			3			0
Reserve at end of the period	$	85		$	77		$	85		$	77

8. CONTINGENT LIABILITIES

Legal Proceedings

Various claims, lawsuits, and proceedings are pending or threatened against the Company and/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 potential future 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. As a result of the outcome of the European Commission investigation of anti-competitive behavior among suppliers of occupant safety systems that the Company resolved in 2019 (the "EC investigation"), the Company is currently subject to a subsequent civil dispute with a non-governmental third party stemming from the same facts and circumstances underlying the EC investigation.

The Company is involved in civil litigation in Germany with respect to alleged anti-competitive behavior that occurred over a decade ago. On October 31, 2024, BMW filed a complaint against the Company in Germany claiming damages of €63 million plus interest (for a total claim of approximately €95 million) related to the conduct at issue in the EC investigation (the "BMW Complaint"). BMW is one of two European OEMs for which the Company pled guilty in 2017 in relation to the EC investigation. The Company filed its statement of defense on June 27, 2025 and BMW has a period of six months to respond. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the BMW Complaint. However, the Company continues to evaluate this matter, no accrual has been made, and the estimated range of potential loss is between €0 and €95 million. The Company cannot predict the ultimate outcome of the BMW Complaint.

This dispute could result in significant expenses as well as an unfavorable outcome that could have a material adverse impact on our customer relationships, business prospects, reputation, operating results, cash flows or financial condition, and our insurance would likely not mitigate such impact. The Company cannot predict the duration, scope, or ultimate outcome of any such disputes.

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 agreements related to the spin-off of Veoneer, 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.

As noted in Note 7 above, as of September 30, 2025, the Company has accrued $85 million for total product-related liabilities. The majority of the total product liability accrual as of September 30, 2025 relates to recalls, which are generally covered by insurance. Insurance receivables for such recall related liabilities total $15 million as of September 30, 2025.

AUTOLIV INC 10-Q