AUTOLIV INC

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 June 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 July 10, 2025, there were 76,807,215 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)	9
Note 1. Basis of Presentation	9
Note 2. New Accounting Standards	10
Note 3. Fair Value Measurements	11
Note 4. Income Taxes	13
Note 5. Inventories	13
Note 6. Restructuring	13
Note 7. Product-Related Liabilities	14
Note 8. Contingent Liabilities	14
Note 9. Earnings Per Share	16
Note 10. Revenue Disaggregation	17
Note 11. Segment Information	17
Note 12. Subsequent Events	17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33
ITEM 4. CONTROLS AND PROCEDURES	33
PART II - OTHER INFORMATION	34
ITEM 1. LEGAL PROCEEDINGS	34
ITEM 1A. RISK FACTORS	34
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	35
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	35
ITEM 4. MINE SAFETY DISCLOSURES	35
ITEM 5. OTHER INFORMATION	35
ITEM 6. EXHIBITS	36
SIGNATURE	37

PART I - FINANCI AL INFORMATION

ITEM 1. FINANCI AL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in millions, except per share data)

	Three Months Ended June 30, — 2025	2024		2025		2024
Net sales	$ 2,714	$	2,605	$	5,292	$	5,220
Cost of sales 1)	( 2,213	)	( 2,130	)	( 4,312	)	( 4,303	)
Gross profit	501		475		980		917
Selling, general and administrative expenses	( 145	)	( 138	)	( 290	)	( 270	)
Research, development and engineering expenses, net	( 107	)	( 116	)	( 202	)	( 229	)
Other income (expense), net 2)	( 1	)	( 14	)	14		( 18	)
Operating income	247		206		502		400
Income from equity method investment	1		2		3		3
Interest income	2		3		4		7
Interest expense	( 27	)	( 28	)	( 52	)	( 54	)
Other non-operating items, net	( 3	)	1		( 3	)	( 0	)
Income before income taxes	221		183		453		356
Income tax expense	( 53	)	( 44	)	( 118	)	( 91	)
Net income 3)	168		139		335		266
Less: Net income attributable to non-controlling interest	0		0		1		1
Net income attributable to controlling interest	$ 167	$	138	$	334	$	265
Net earnings per share – basic	$ 2.17	$	1.71	$	4.32	$	3.24
Net earnings per share – diluted	$ 2.16	$	1.71	$	4.31	$	3.23
Weighted average number of shares outstanding, net of treasury shares (in millions)	77.1		80.9		77.3		81.6
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions)	77.3		81.1		77.5		82.1
Cash dividend per share – declared 4)	$ 1.55	$	0.68	$	2.25	$	1.36
Cash dividend per share – paid	$ 0.70	$	0.68	$	1.40	$	1.36

1) Including a gain on sale of property in China of $ 6 million in the first 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 June 30, 2025 and 2024, the aggregate transaction gain (loss) included in net income for the period were a loss of $ 7 million and a gain of $ 4 million, respectively. For the six months periods ended June 30, 2025 and 2024, the aggregate transaction gain (loss) included in net income for the period were a loss of $ 14 million and a loss of $ 2 million, re spectively.

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 June 30, — 2025	2024		2025		2024
Net income	$ 168	$	139	$	335	$	266
Other comprehensive income (loss) before tax:
Change in cumulative translation adjustments 1)	114		( 59	)	124		( 105	)
Net change in unrealized components of defined benefit plans	6		3		2		9
Other comprehensive income (loss), before tax	120		( 56	)	127		( 96	)
Tax effect allocated to other comprehensive income (loss)	( 1	)	( 1	)	( 0	)	( 2	)
Other comprehensive income (loss), net of tax	119		( 56	)	126		( 98	)
Comprehensive income	287		83		461		168
Less: Comprehensive income (loss) attributable to non-controlling interest	1		0		1		0
Comprehensive income attributable to controlling interest	$ 286	$	82	$	460	$	167

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 — June 30, 2025	December 31, 2024
Assets
Cash and cash equivalents	$ 237	$	330
Receivables, net	2,341		1,993
Inventories, net	957		921
Prepaid expenses and accrued income	249		167
Other current assets	146		72
Total current assets	3,929		3,483
Property, plant and equipment, net	2,399		2,239
Operating lease right-of-use assets	171		158
Goodwill and intangible assets, net	1,389		1,375
Other non-current assets	588		548
Total assets	8,476		7,804
Liabilities and equity
Short-term debt	679		387
Accounts payable 1)	1,945		1,799
Accrued expenses	1,138		1,056
Operating lease liabilities - current	44		41
Other current liabilities	430		351
Total current liabilities	4,235		3,633
Long-term debt	1,372		1,522
Pension liability	167		153
Operating lease liabilities - non-current	121		118
Other non-current liabilities	102		92
Total non-current liabilities	1,762		1,885
Common stock	79		80
Additional paid-in capital	890		910
Retained earnings	2,183		2,105
Accumulated other comprehensive loss 2)	( 534	)	( 659	)
Treasury stock	( 151	)	( 160	)
Total controlling interest's equity	2,469		2,276
Non-controlling interest	11		10
Total equity	2,480		2,285
Total liabilities and equity	$ 8,476	$	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 June 30, 2025 and December 31, 2024 are $ 339 million and $ 335 million, respectively.

2) Including cumulative translation adjustment as of June 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)

	Six Months Ended June 30, — 2025	2024
Operating activities
Net income	$ 335	$	266
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	195		192
Deferred income taxes	( 24	)	( 18	)
Undistributed earnings from equity method investments, net of dividends	1		( 0	)
Gain on divestiture of property	( 6	)	—
Other, net	16		8
Net change in operating assets and liabilities:
Receivables and other assets, gross	( 301	)	26
Inventories, gross	26		31
Accounts payable and accrued expenses	92		( 21	)
Income taxes	19		( 22	)
Net cash provided by operating activities	355		462
Investing activities
Expenditures for property, plant and equipment	( 217	)	( 294	)
Proceeds from sale of property, plant and equipment	9		8
Net cash used in investing activities	( 208	)	( 286	)
Financing activities
Net increase (decrease) in short-term debt	273		( 67	)
Proceeds from issuance of long-term debt	77		534
Repayment of long-term debt	( 311	)	( 306	)
Dividends paid	( 108	)	( 111	)
Stock repurchased	( 101	)	( 320	)
Common stock options exercised	0		0
Dividends paid to non-controlling interest	0		( 1	)
Net cash used in financing activities	( 170	)	( 269	)
Effect of exchange rate changes on cash and cash equivalents	( 71	)	3
Decrease in cash and cash equivalents	( 94	)	( 90	)
Cash and cash equivalents at beginning of period	330		498
Cash and cash equivalents at end of period	237		408

See Notes to Condensed Consolidated Financial Statements (unaudited).

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

Balances at December 31, 2024	Common stock — $ 80	$	910	$	2,105	$ ( 659	)	Treasury stock — $ ( 160	)	Total controlling interest's equity — $ 2,276	$ 10	Total equity — $ 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

Balances at December 31, 2023	Common stock — $ 88	$	1,044	$	2,289	$ ( 496	)	Treasury stock — $ ( 368	)	Total controlling interest's equity — $ 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

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

NOTES TO THE CONDENSED CO NSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

June 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 ACCOU NTING 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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , which improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update require that a public entity make additional disclosures related to segments if it has them. A public entity that has a single reportable segment is required to provide all the disclosures mandated by the amendments in this update and all existing segment disclosures in Topic 280. The amendments in this update will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in this update should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 in the fourth quarter of 2024. The adoption of this guidance resulted in incremental disclosures in the Company’s financial statements. See Note 11. Segment Information.

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.

3. FAIR VALU E 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 June 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 June 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 no t designated as hedging instruments outstanding as of June 30, 2025 and December 31, 2024 were foreign exchange swaps.

For the three months periods ended June 30, 2025 and 2024, the gains or losses recognized in other non-operating items, net were a gain of $ 58 million and a gain of $ 1 million, respectively, for derivative instruments not designated as hedging instruments. For the six months periods ended June 30, 2025 and 2024, the gains (losses) recognized in other non-operating items, net were a gain of $ 86 million and a loss of $ 10 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 June 30, 2025 and 2024, the gains or losses recognized as interest expense were a loss of $ 3 million and a loss of $ 4 million, respectively. For the six months periods ended June 30, 2025 and 2024, the gains or losses recognized as interest expense were a loss of $ 4 million and a loss of $ 5 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
	June 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	$ 2,202	1)	$ 74	2)	$ 7	3)	$ 2,916	4)	$ 22	5)	$ 42	6)
Total derivatives not designated as hedging instruments	$ 2,202		$ 74		$ 7		$ 2,916		$ 22		$ 42

1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 2,202 million.

2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 74 million.

3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 7 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 — June 30, 2025		December 31, 2024
	Carrying value 1)	Fair value	Carrying value 1)	Fair value
Long-term debt
Bonds	$ 1,358	$ 1,386	$ 1,512	$ 1,527
Loans	14	14	10	10
Total long-term debt	1,372	1,400	1,522	1,537
Short-term debt
Short-term portion of long-term debt	285	285	273	275
Overdrafts and other short-term debt	394	394	114	114
Total short-term debt	$ 679	$ 679	$ 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 six months period ended June 30, 2025, the Company did no t record any material impairment charges on its long-lived assets for its operations.

4. INCO ME TAXES

The effective tax rate for the three months period ended June 30, 2025 was 24.1 % compared to 24.1 % for the three months period ended June 30, 2024. Discrete tax items, net for the three months period ended June 30, 2025 had a favorable impact of 4.3 % . Discrete tax items, net for the three months period ended June 30, 2024 had a favorable impact of 4.9 % .

The effective tax rate for the six months period ended June 30, 2025 was 26.1 % compared to 25.5 % for the six months period ended June 30, 2024. Discrete tax items, net for the six months period ended June 30, 2025 had a favorable impact of 2.1 % . Discrete tax items, net for the six months period ended June 30, 2024 had a favorable impact of 3.7 % .

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 June 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 six months period ended June 30, 2025, the Company recorded a net decrease of $ 5 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 $ 39 million recorded as of June 30, 2025, $ 13 million is classified as current tax payable within Other current liabilities and $ 26 million is classified as non-current tax payable withi n Other non-current liabilities on the Condensed Consolidated Balance Sheet.

5. INV ENTORIES

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 — June 30, 2025	December 31, 2024
Raw materials	$ 447	$	418
Work in progress	305		295
Finished products	293		290
Inventories	1,044		1,003
Inventory valuation reserve	( 87	)	( 82	)
Total inventories, net of reserve	$ 957	$	921

6. REST RUCTURING

As of June 30, 2025, the majority of the restructuring reserve balance of $ 117 million is attributed to global structural cost reduction program activities initiated in Europe in 2023. A majority of the activities are expected to be concluded in 2025.

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

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 June 30, — 2025	2024		2025		2024
Reserve at beginning of the period	$ 121	$	193	$	151	$	213
Provision - charge	1		13		2		14
Provision - reversal	0		( 0	)	( 0	)	( 0	)
Cash payments	( 15	)	( 15	)	( 50	)	( 30	)
Translation difference	9		( 1	)	14		( 7	)
Reserve at end of the period	$ 117	$	189	$	117	$	189

7. PRODUCT-REL ATED 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 June 30, 2025, new provisions relate to recall and warranty related issues and cash payments mainly relate to warranty related issues. For the three months period ended June 30, 2024, cash payments mainly related to warranty related issues. For the six months period ended June 30, 2025, new provisions and cash payments mainly relate to warranty related issues. For the six months period ended June 30, 2024, provision reversals and cash payments primarily related to warranty related issues.

As of June 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. A majority of the Company’s product-related liabilities as of June 30, 2025 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 June 30, 2025, the Company had total insurance receivables of $ 56 million.

	Three Months Ended June 30, — 2025	2024		2025		2024
Reserve at beginning of the period	$ 71	$	78	$	65	$	96
Net change in reserve	7		( 1	)	15		( 8	)
Cash payments	( 11	)	( 4	)	( 14	)	( 14	)
Translation difference	2		( 0	)	3		( 1	)
Reserve at end of the period	$ 69	$	73	$	69	$	73

8. CONTINGE NT 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 subject to two subsequent civil disputes with non-governmental third parties 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 invest igation. The Company filed its statement of defense on June 27, 2025 and BMW has a period of six months to respond. The C ompany 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 June 30, 2025, the Company has accrued $ 69 million for total product-related liabilities. The majority of the total product liability accrual as of June 30, 2025 relates to recalls, which are generally covered by insurance. Insurance receivables for such recall related liabilities total $ 56 million as of June 30, 2025.

Product Liability:

Autoliv and some of its subsidiaries have been named as one of several defendants in a consolidated class action lawsuit in a multi-district litigation (In Re: ARC Airbag Inflators Products Liability Litigation MDL, No. 3051) in the Northern District of Georgia. The plaintiffs in the multi-district litigation (the "ARC Inflator Class Action") brought claims for fraud, breach of warranty, and violations of consumer protection and trade practices stemming from ARC inflators included in airbag modules that Autoliv or its subsidiaries allegedly supplied after Autoliv acquired certain Delphi assets (the “Delphi Acquisition”) in December 2009. The Company denies these allegations. Autoliv is not aware of any performance issues regarding ARC inflators included with its airbags at the directions of its customers that it shipped following the Delphi Acquisition. The proceedings remain ongoing. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the ARC Inflator Class Action. However, the Company continues to evaluate this matter, no accrual has been made, and no estimated range of potential loss can be determined at this time. The Company cannot predict the ultimate outcome of the ARC Inflator Class Action.

On September 5, 2023, the National Highway Traffic Safety Administration (“NHTSA”) issued an initial decision to recall approximately 52 million frontal driver and passenger airbag inflators manufactured by ARC and Delphi Automotive Systems because NHTSA determined that the airbag inflators contain a safety defect resulting in field ruptures. Some of the ARC inflators included in the airbag modules that Autoliv or its subsidiaries supplied after the Delphi Acquisition were included in such initial decision. NHTSA has yet to release its final decision. If NHTSA's final decision results in a recall, it is anticipated that such decision will be challenged in US federal court. The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the NHTSA ARC recall. However, the Company continues to evaluate this matter, no accrual has been made, and no estimated range of potential loss can be determined at this time. The Company cannot predict the ultimate outcome of the NHTSA ARC recall.

Specific Recalls:

In the second quarter of 2025, Stellantis initiated a recall of approximately 250,000 vehicles in the U.S. equipped with a certain model of the Comp any’s side curtain airbag (the “Stellantis Recall”). The Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the Stellantis Recall. The Company is cooperating with Stellantis and continues to evaluate this matter with Stellantis. The Company currently estimates a range of $ 0 to $ 385 million with respect to this potential loss, expects a substantial portion of a potential loss would be covered by insurance, and no accrual has been made. The ultimate amount of the potential loss to the Company cannot be estimated. However, the ultimate costs o f a recall, could be significantly different than our current estimate. The main variables affecting the possible costs are the number of vehicles ultimately determined to be affected by the issue, the cost per vehicle associated with a recall, the determination of proportionate responsibility among the customer, the Company, and any relevant sub-suppliers, as well as the actual insurance recoveries. The Company’s insurance policies generally cover the costs of a recall, although costs related to the replacement parts are not covered under its insurance policies. Another customer has contacted the Company to inquire about the details of these incidents of nonconformance and are investigating whether its vehicles may generate similar tests results. If this customer or others generate similar nonconformance test results, it is possible that there may be recalls of additional vehicles in future quarters.

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, increased the accrual in the fourth quarter of 2021, and reduced the accrual in the fourth quarter of 2023 based on vehicle repair cost data. Following the accrual increase in the third quarter of 2024, the amount by which the product liability accrual exceeds the product liability insurance receivable with respect to the Honda Buckle Recall is approximately $ 12 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.

9. EARNING S 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.

(In millions, except per share amounts)	Three Months Ended June 30, — 2025	2024	Six Months Ended June 30, — 2025	2024
Numerator:
Basic and diluted:
Net income attributable to controlling interest	$ 167	$ 138	$ 334	$ 265
Denominator:
Basic: Weighted average common stock	77.1	80.9	77.3	81.6
Add: Weighted average stock options/share awards	0.2	0.2	0.2	0.4
Diluted weighted average common stock:	77.3	81.1	77.5	82.1
Net earnings per share - basic	$ 2.17	$ 1.71	$ 4.32	$ 3.24
Net earnings per share - diluted	$ 2.16	$ 1.71	$ 4.31	$ 3.23

10. REVENUE DISAGGREGATION

The Company’s disaggregated revenue for the three months periods ended June 30, 2025 and 2024 were as follows (dollars in millions).

Net Sales by Products	Three Months Ended June 30, — 2025	2024	Six Months Ended June 30, — 2025	2024
Airbags, Steering Wheels and Other 1)	$ 1,812	$ 1,747	$ 3,565	$ 3,528
Seatbelt Products and Other 1)	902	858	1,727	1,692
Total net sales	$ 2,714	$ 2,605	$ 5,292	$ 5,220
Net Sales by Region	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Americas	$ 891	$ 893	$ 1,742	$ 1,786
Europe	828	761	1,592	1,531
China	477	468	924	928
Asia excl. China	519	483	1,034	975
Total net sales	$ 2,714	$ 2,605	$ 5,292	$ 5,220

1) Including Corporate sales.

11. Segment Information

The Company has a single operating and reportable segment which includes Autoliv’s airbag and steering wheels, and seatbelt products and components. The determination of a single operating segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The basis of segmentation and the basis of measurement of segment profit or loss is consistent with our 2024 annual report on the consolidated financial statements.

The significant expenses that are regularly provided to the CODM are disclosed in the Consolidated Statements of Net Income as a part of the consolidated net income and are as follows.

Significant segment expenses / income (Dollars in millions)	Three Months Ended June 30, — 2025		2024		Six Months Ended June 30, — 2025		2024
Total direct costs	$ ( 1,838	)	$ ( 1,773	)	$ ( 3,572	)	$ ( 3,578	)
Total production overhead costs	( 375	)	( 357	)	( 740	)	( 725	)
Cost of sales	$ ( 2,213	)	$ ( 2,130	)	$ ( 4,312	)	$ ( 4,303	)
Research, development and engineering expenses (gross)	$ ( 155	)	$ ( 160	)	$ ( 302	)	$ ( 317	)
Reimbursements from customer funded engineering projects	48		44		100		88
Research, development and engineering expenses, net	$ ( 107	)	$ ( 116	)	$ ( 202	)	$ ( 229	)

The Company's other significant segment items that are regularly provided to the CODM include selling, general and administrative expenses, and other income (expense), which are disclosed as separate line items in the Consolidated Statements of Income. Other expenses consist of Income from equity method investments, Interest income, Interest expense, Other non-operating items, net, and Income taxes, which are disclosed as separate line items in the Consolidated Statements of Income.

The segment assets are equal to the assets presented in the Consolidated Balance Sheets. Expenditures for long-lived segment assets are equal to the line items Expenditures for property, plant and equipment in the Consolidated Statements of Cash Flow. The segment assets and expenditures for long-lived assets for the periods presented are as follows.

Segment assets and expenditures for long-lived assets (Dollars in millions)	Three Months Ended June 30, — 2025		2024		Six Months Ended June 30, — 2025		2024
Expenditures for long-lived assets	$ ( 115	)	$ ( 154	)	$ ( 217	)	$ ( 294	)
Total assets	8,476		8,010		8,476		8,010

12. SUBSE QUENT EVENTS

There were no reportable events subsequent to June 30, 2025 .

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, 2024 filed with the United States Securities and Exchange Commission (the “SEC”) on February 20, 2025. 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,” “Free operating cash flow,” “Cash conversion,” “Net debt,” “Leverage ratio,” “Adjusted net income,” “Adjusted operating income,” “Adjusted operating margin,” “Adjusted earnings per share, diluted,” “Adjusted return on capital employed,” and “Adjusted return on total equity” 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

We are pleased to, in a turbulent market environment, report a record breaking second quarter for sales, operating income and margin as well as EPS. The performance was driven by good sales development coupled with successful actions to reduce costs and achieve tariff compensations. We outperformed in Americas, Europe and Asia excl. China and continued to outperform global LVP despite strong headwinds from LVP mix shifts, particularly in China. Based on a positive trend during the second quarter and a record number of new launches we continue to expect a significantly improved sales versus LVP in China in the second half year.

We remain focused on operational efficiency, commercial excellence and our cost reduction programs. Direct headcount was reduced by 6% while sales grew 3% organically (Non-U.S. GAAP measure, see reconciliation table below), which together with continued repurchases of shares, contributed to a 27% increase in EPS. We remain confident that we can continue to successfully receive compensation from our customers for tariffs, although the industry outlook for tariffs is uncertain. We recovered around 80% of tariff costs in the second quarter, and we expect to recover most of what remains later in the year. We continue to closely monitor and evaluate the situation, focusing on being adaptive and agile.

At our Capital Markets Day in June, we reiterated our financial targets and communicated a new share repurchase program of up to $2.5 billion until the end of 2029 as well as announced a 21% dividend increase for the third quarter to $0.85 per share. Our increased shareholder return ambitions are supported by our strong balance sheet and cash conversion.

Our 2025 guidance for organic sales growth (Non-U.S. GAAP measure) has increased to around 3% due to tariff compensations, and we reiterate our guidance of an adjusted operating margin (Non-U.S. GAAP measure) of around 10-10.5%.

Financial highlights in the three months period ended June 30, 2025

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

$2,714 million net sales

4.2% net sales increase

3.4% organic sales growth (Non-U.S. GAAP measure, see reconciliation table below)

9.1% operating margin

9.3% adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below)

$2.16 diluted EPS, 27% increase

$2.21 adjusted diluted EPS (Non-U.S. GAAP measure, see reconciliation table below), 18% increase

Key business developments in the three months period ended June 30, 2025

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

• Net sales increased organically (Non-U.S. GAAP measure, see reconciliation table below) by 3.4%, which was 0.7pp higher than the global LVP increase of 2.7% (S&P Global July 2025). Regional and customer LVP mix is estimated to have had about 2.5pp negative impact on sales, while tariff compensations added around 1pp to growth. We outperformed in Americas, Europe and Asia excl. China, mainly due to product launches and tariff compensations. In China, our growth gap versus LVP was smaller compared to recent quarters, due to improved sales performance with Chinese OEMs. We expect that our record number of new launches will significantly improve our relative sales performance in China in the second half of 2025.

• Profitability improved significantly, mainly due to organic sales growth and successful execution of cost reductions. Total headcount decreased by 5%. We estimate that the negative impact from U.S. tariffs was around 35bps on operating margin, as we managed to pass on most of the tariff costs to our customers. Operating income increased by 20% to $247 million and adjusted operating income (Non-U.S. GAAP measure, see reconciliation table below) increased by 14% to $251 million. Operating margin was 9.1% and adjusted operating margin (Non-U.S. GAAP measure, see reconciliation table below) was 9.3%. ROCE was 23.8% and adjusted ROCE (Non-U.S. GAAP measure, see reconciliation table below) was 24.1%.

• Operating cash flow was lower than last year, as Q2 2024 was boosted by positive, timing related working capital effects, while working capital changes in 2025 were more normal. This was partly offset by lower capex, net. The leverage ratio (Non-U.S. GAAP measure, see reconciliation table below) of 1.3x is well below our target limit of 1.5x. In the quarter, a dividend of $0.70 per share was paid and 0.5 million shares were repurchased and retired.

Business and market condition update for the three months period ended June 30, 2025

Supply Chain

In the second quarter of 2025, global LVP increased by 2.7% year-over-year (according to S&P Global July 2025). Call-off volatility improved slightly compared to a year earlier and was comparable to the first quarter of 2025, although it remains higher than pre-pandemic levels. Low customer demand visibility and changes to customer call-offs with short notice, although it improved, continued to have some negative impact on our production efficiency and profitability. We expect call-off volatility in 2025 on average to be slightly lower than it was in 2024 but still remain higher than pre-pandemic levels. However, the continued uncertainty regarding future changes in tariffs and trade restrictions may lead to a more negative call-off volatility environment.

Inflation

In the second quarter, cost pressure from labor and other items impacted our profitability negatively, although to a lesser degree than in the second quarter of 2024. Most of the inflationary cost pressure was offset by price increases and other customer compensations in the quarter. Raw material price changes had a slightly negative impact on our profitability during the quarter. We expect raw material costs in 2025 to be slightly higher than in 2024. We expect cost pressure from general inflation to moderate in 2025, but we still expect some pressure coming mainly from labor, especially in Europe and the Americas and potentially from tariffs. The continued uncertainty regarding effects of tariffs and trade restrictions may lead to a more adverse inflation environment. We continue to execute on productivity and cost reduction initiatives to offset these cost pressures.

Geopolitical risks and tariffs

The effects from the new tariffs imposed in the first quarter did not have a material impact on our profitability in the second quarter, as we achieved customer compensations for almost all tariff costs. It is our ambition and expectation that we will continue to pass on tariff costs to our customers, although there is significant uncertainty. We recovered around 80% of the tariffs in the second quarter, and we expect to recover most of what remains later in the year. The impact of the tariffs not yet recovered on our operating income was around $7 million negative in the quarter. Including the dilutive effect of tariffs recovered, operating margin was negatively impacted by around 35 bps. For the full year 2025, we expect the tariff dilution on our operating margin to be around 20 bps. Geopolitical uncertainties will continue to create a challenging operating environment. We also believe there will be new or increased or changed tariffs or other related trade restrictions imposed in 2025 that may impact our operations and which contributes to the uncertainty of industry expectations. We continue to closely monitor the situation and are prepared to remain agile in responding to any such developments.

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)

or As of June 30,			Six Months Ended — or As of June 30,
2025	2024		2025	2024
Receivables outstanding relative to sales, % 1)	21.6 %	20.1 %	-	-
Inventory outstanding relative to sales, % 2)	8.8 %	9.0 %	-	-
Payables outstanding relative to sales, % 3)	17.9 %	17.8 %	-	-
Gross margin, % 4)	18.5 %	18.2 %	18.5 %	17.6 %
Operating margin, % 5)	9.1 %	7.9 %	9.5 %	7.7 %
Capital employed 6)	4,231	3,890	-	-
Net debt 7)	1,752	1,579	-	-
Return on total equity, % 8)	27.7 %	23.4 %	28.2 %	21.8 %
Return on capital employed, % 9)	23.8 %	21.0 %	24.8 %	20.4 %
Headcount at period-end 10)	65,100	68,700	-	-

1) Outstanding receivables relative to annualized quarterly sales.

2) Outstanding inventory relative to annualized quarterly sales.

3) Outstanding payables relative to annualized quarterly sales.

4) Gross profit relative to sales.

5) Operating income relative to sales.

6) Total equity and net debt.

7) 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.

8) Net income relative to average total equity.

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

10) Employees plus temporary, hourly personnel.

three months period ended June 30, 2025 COMPARED WITH three months period ended June 30, 2024

Consolidated Sales Development

(dollars in millions)

	Three Months Ended June 30, — 2025	2024	Reported change	Currency effects 1)		Organic 3)
Airbags, Steering Wheels and Other 2)	$ 1,812	$ 1,747	3.8	%	0.7	%	3.1 %
Seatbelt products and Other 2)	902	858	5.1	%	1.1	%	4.0 %
Total	$ 2,714	$ 2,605	4.2	%	0.8	%	3.4 %
Americas	$ 891	$ 893	(0.2	)%	(4.3	)%	4.1 %
Europe	828	761	8.7	%	5.4	%	3.3 %
China	477	468	1.9	%	0.2	%	1.7 %
Asia excl. China	519	483	7.4	%	3.6	%	3.8 %
Total	$ 2,714	$ 2,605	4.2	%	0.8	%	3.4 %

1) Effects from currency translations.

2) Including Corporate sales.

3) Non-U.S. GAAP measure.

Sales by product - Airbags, Steering Wheels and Other

Sales grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 3.1% in the quarter. The largest contributor to the increase was inflatable curtains, side airbags and steering wheels, followed by center airbags. This was partly offset by a decline for knee airbags, while sales of driver airbags and passenger airbags were close to unchanged.

Sales by product - Seatbelts and Other

Sales for Seatbelt Products and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 4.0% in the quarter. Sales increased organically in all regions, led by strong growth in Americas followed by Asia excluding China, Europe and China.

Sales by region

Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 3.4% compared to the global LVP increase of 2.7% (according to S&P Global, July 2025). The 0.7pp outperformance was mainly driven by product launches and tariff compensations. We estimate that the regional and model LVP mix contributed to about 2.5pp underperformance. This was particularly accentuated in China. Our organic sales growth (Non-U.S. GAAP measure) outperformed LVP growth by 5.0pp in Americas, by 4.9pp in Europe and by 1.4pp in Asia excluding China, while we underperformed by 7.0pp in China.

LVP growth in China was driven by domestic OEMs with typically lower safety content. LVP for global OEMs declined by 4% while it increased by 16% for domestic OEMs. Autoliv's sales growth with domestic OEMs also grew by 16%. Our sales performance relative to LVP in China in Q2 is a significant improvement over recent quarters, and in June, we outperformed LVP in China. We expect that our strong order intake with domestic OEMs and a record high number of new launches will improve our relative sales performance in China in 2025 in the second half of 2025.

Second quarter of 2025 organic growth 1)

	Americas	Europe	China	Asia excl. China	Global
Autoliv	4.1 %	3.3%	1.7%	3.8%	3.4 %
Main growth drivers	Toyota, Nissan, Honda	Stellantis, BMW, Renault	GM, Changan, Chery	Suzuki, Toyota, Hyundai	Toyota, Ford, Stellantis
Main decline drivers	EV OEM, Hyundai, GM	Toyota, Volvo, Nissan	Nissan, Mercedes, EV OEM	Mazda, Mitsubishi, GM	EV OEM, Hyundai, Volvo

1) Non-U.S. GAAP measure.

Light Vehicle Production Development

Change second quarter of 2025 versus second quarter of 2024

	Americas	Europe	China	Asia excl. China	Global
LVP 1)	(0.9)%	(1.6)%	8.8 %	2.5 %	2.7 %

1) Source: S&P Global, July 2025.

Earnings

(Dollars in millions, except per share data)	Three Months Ended June 30, — 2025	2024		Change
Net Sales	$ 2,714	$	2,605.020		4.2	%
Gross profit	501		475		5.7	%
% of sales	18.5	%	18.2	%	0.3	pp
S, G&A	(145	)	(138.061	)	5.3	%
% of sales	(5.4	)%	(5.300	)%	(0.1	)pp
R, D&E, net	(107	)	(116	)	(8	)%
% of sales	(3.9	)%	(4.5	)%	0.5	pp
Other income (expense), net	(1	)	(14	)	(90	)%
Operating income	247		206		20.1	%
% of sales	9.1	%	7.9	%	1.2	pp
Adjusted operating income 1)	251		221		13.8	%
% of sales	9.3	%	8.5	%	0.8	pp
Financial and non-operating items, net	(27	)	(23	)	15.1	%
Income before taxes	221		183		20.7	%
Income taxes	(53	)	(44	)	21	%
Tax rate	24.1	%	24.1	%	(0.0	)pp
Net income	168		139		20.7	%
Earnings per share, diluted 2)	2.16		1.71		27	%
Adjusted earnings per share, diluted 1,2)	2.21		1.87		18	%

1) Non-U.S. GAAP measure, excluding effects from capacity alignments and antitrust related matters.

2) Ne t of treasury shares.

Second quarter of 2025 financial development

Gross profit increased by $27 million, and the gross margin increased by 0.3pp compared to the prior year. The drivers behind the gross profit improvement were mainly improved operational efficiency with lower costs for labor, premium freight, waste and scrap and logistics. We also had positive effects from the organic sales growth partly offset by negative effects from un-recovered tariff costs.

S,G&A costs increased by $7 million compared to the prior year, mainly due to higher costs for personnel and increased credit loss reserves following generally increased default risk rate for the automotive industry. S,G&A costs in relation to sales increased from 5.3% to 5.4%.

R,D&E, net costs decreased by $9 million compared to the prior year, mainly due to higher engineering income and positive foreign currency translation effects. R,D&E, net, in relation to sales decreased from 4.5% to 3.9%.

Other income (expense), net was negative $1 million, compared to negative $14 million in the same period last year. The difference compared to last year is almost entirely due to lower restructuring costs.

Operating income increased by $41 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and the improvement in Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Adjusted operating income (Non-U.S. GAAP measure, see reconciliation table above) increased by $30 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and the improvement in Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Financial and non-operating items, net , was negative $27 million compared to negative $23 million a year earlier. The increase comes mainly from other non-operating items, net, which was negative $3 million for Q2 2025 compared to positive $1 million in Q2 2024.

Income before taxes increased by $38 million compared to the prior year, mainly due to the higher operating income.

Tax rate was unchanged at 24.1%. Discrete tax items, net, had a favorable impact of 4.3pp in the second quarter of 2025, while discrete tax items, net had a favorable impact of 4.9pp in the corresponding quarter last year.

Earnings per share, diluted increased by $0.46 compared to the prior year. The main drivers were $0.39 from higher operating income and $0.10 from lower number of outstanding shares, diluted, partly offset by $0.03 from financial items and $0.01 from taxes.

six months period ended June 30, 2025 compared with six months period ended June 30, 2024

Consolidated Sales Development

(dollars in millions)

	Six Months Ended June 30, — 2025	2024	Reported change	Currency effects 1)		Organic 3)
Airbags, Steering Wheels and Other 2)	$ 3,565	$ 3,528	1.0	%	(1.3	)%	2.4 %
Seatbelt products and Other 2)	1,727	1,692	2.1	%	(1.5	)%	3.6 %
Total	$ 5,292	$ 5,220	1.4	%	(1.4	)%	2.8 %
	Six Months Ended June 30,			Components of change in net sales
	2025	2024	Reported change	Currency effects 1)		Organic 3)
Americas	$ 1,742	$ 1,786	(2.5	)%	(5.2	)%	2.7 %
Europe	1,592	1,531	4.0	%	1.4	%	2.6 %
China	924	928	(0.5	)%	(0.5	)%	0.1 %
Asia excl. China	1,034	975	6.1	%	0.3	%	5.8 %
Total	$ 5,292	$ 5,220	1.4	%	(1.4	)%	2.8 %

1) Effects from currency translations.

2) Including Corporate sales.

3) Non-U.S. GAAP measure.

Sales by product - Airbags, Steering Wheels and Other

Sales grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 2.4% in the quarter. The largest contributor to the increase was side airbags and inflatable curtains, followed by steering wheels and center airbags. This was partly offset by declines for knee airbags and modest declines for driver airbags and passenger airbags.

Sales by product - Seatbelts and Other

Sales for Seatbelt Products and Other grew organically (Non-U.S. GAAP measure, see reconciliation table above) by 3.6% in the quarter. Sales growth was mainly driven by Americas and Asia excluding China while Europe and China was close to unchanged.

Sales by region

Our global organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 2.8% compared to the global LVP increase of 3.1% (according to S&P Global, July 2025). The relative performance was positively impacted by product launches and pricing. This was more than offset by negative effects from the regional and model LVP mix development, which we estimate contributed to about 3pp underperformance. This was particularly accentuated in China. Our organic sales growth outperformed LVP growth by 5.7pp in Europe, by 4.7pp in Americas and by 2.6pp in Asia excluding China, while we underperformed by 11pp in China.

LVP growth in China in the first six months was driven by domestic OEMs with typically lower safety content. LVP for global OEMs declined by 4% while it increased by 21% for domestic OEMs. Autoliv's sales to domestic OEMs increased by 17% in the first half of 2025. We expect that our strong order intake with domestic OEMs and a record number of new launches will significantly improve Autoliv's sales performance in China in the second half of 2025

First six months 2025 organic growth 1)

	Americas	Europe	China	Asia excl. China	Global
Autoliv	2.7 %	2.6%	0.1 %	5.8%	2.8%
Main growth drivers	Toyota, Honda, Ford	Renault, BMW, Ford	Changan, Chery, Nio	Toyota, Suzuki, Subaru	Toyota, Ford, Suzuki
Main decline drivers	EV OEM, Hyundai, BMW	Volvo, EV OEM, Toyota	EV OEM, Nissan, Volvo	Mitsubishi, Honda, Mazda	EV OEM, Volvo, Hyundai

1) Non-U.S. GAAP measure.

Light Vehicle Production Development

Change first six months of 2024 versus first six months of 2024

	Americas	Europe	China	Asia excl. China	Global
LVP 1)	(2.0)%	(3.1)%	11.4 %	3.2 %	3.1 %

1) Source: S&P Global, July 2025.

Earnings

(Dollars in millions, except per share data)	Six Months Ended June 30, — 2025	2024		Change
Net Sales	$ 5,292	$	5,220		1.4	%
Gross profit	980		917		6.8	%
% of sales	18.5	%	17.6	%	0.9	pp
S, G&A	(290	)	(270	)	7.4	%
% of sales	(5.5	)%	(5.2	)%	(0.3	)pp
R, D&E, net	(202	)	(229	)	(11.8	)%
% of sales	(3.8	)%	(4.4	)%	0.6	pp
Other income (expense), net	14		(18	)	(175	)%
Operating income	502		400		25	%
% of sales	9.5	%	7.7	%	1.8	pp
Adjusted operating income 1)	506		420		21	%
% of sales	9.6	%	8.0	%	1.5	pp
Financial and non-operating items, net	(48	)	(43	)	12	%
Income before taxes	453		356		27	%
Income taxes	(118	)	(91	)	30	%
Tax rate	26.1	%	25.5	%	0.6	pp
Net income	335		266		26	%
Earnings per share, diluted 2)	4.31		3.23		34	%
Adjusted earnings per share, diluted 1,2)	4.36		3.45		27	%

1) Non-U.S. GAAP measure, excluding effects from capacity alignments and antitrust related matters.

2) Ne t of treasury shares.

First six months 2025 financial development

Gross profit increased by $63 million, and the gross margin increased by 0.9pp compared to the prior year. The drivers behind the gross profit improvement were mainly improved operational efficiency with lower costs for labor, premium freight, logistics and waste and scrap. We also had positive effects from the organic sales growth partly offset by negative effects from material costs and un-recovered tariffs.

S,G&A costs increased by $20 million compared to the prior year, mainly due to increased credit loss reserves following generally higher default risk rate for the automotive industry and higher IT costs, as well as minor cost increases for other items, including personnel costs, partly offset by positive foreign currency translation effects. S,G&A costs in relation to sales increased from 5.2% to 5.5%.

R,D&E, net costs decreased by $27 million compared to the prior year, with $10 million of the improvement coming from higher engineering income. The decrease was also driven by $7 million from positive foreign currency translation effects and $4 million in lower personnel costs and $4 million in lower costs for professional services. R,D&E, net, in relation to sales decreased from 4.4% to 3.8%.

Other income (expense), net was positive $14 million, compared to negative $18 million in the same period last year. The improvement compared to last year is due to lower restructuring costs and the recycled accumulated currency translation differences related to the divestment of our idled operations in Russia in Q1 2025.

Operating income increased by $102 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and the improvement in Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Adjusted operating income (Non-U.S. GAAP measure) increased by $86 million compared to the prior year, due to the higher gross profit, lower costs for R,D&E, net, and the improvement in Other income (expense), partly offset by higher costs for S,G&A, as outlined above.

Financial and non-operating items, net , was negative $48 million compared to negative $43 million a year earlier. The increase was mainly due to higher interest income in 2024 due to higher cash holdings, and lower other non-operating items, net, in 2025.

Income before taxes increased by $97 million compared to the prior year, mainly due to the higher operating income.

Tax rate was 26.1% compared to 25.5% in the prior year. Discrete tax items, net, had a favorable impact of 2.1pp in the first six months of 2025 compared to 3.7pp favorable impact in the same period last year.

Earnings per share, diluted increased by $1.09 compared to the prior year. The main drivers were $0.92 from higher operating income and $0.24 from lower number of outstanding shares, diluted, partly offset by $0.04 from financial items and $0.03 from taxes.

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, 2024 filed with the SEC on February 20, 2025.

Second quarter of 2025 development

Changes in operating working capital impacted operating cash flow by $15 million positive compared to an impact of $128 million positive in the prior year. The relatively large positive effects from working capital in Q2 last year was related to timing effects while the impact from working capital in Q2 2025 can be considered to be more within normal variations and impacted by higher sales towards the end of the quarter. The working capital decrease in the quarter of $15 million was mainly a result of $113 million in positive effects from accounts payables and accrued expenses, $9 million from deferred income taxes and $4 million from lower inventories. This was partly offset by $110 million in increased receivables partly due to tariff recoveries not yet paid.

Operating cash flow decreased by $63 million to $277 million compared to the prior year, mainly because of less favorable effects from changes in operating working capital, as outlined above.

Capital expenditure, net (see definition in reconciliation table below) decreased by $32 million compared to the prior year. The level of capital expenditure, net, in relation to sales declined to 4.2% versus 5.6% a year earlier. The lower level of capital expenditure, net is mainly related to the lower activity level of footprint optimization in Europe and Americas and less capacity expansion, especially in Asia.

Free operating cash flow (Non-U.S. GAAP measure, see reconciliation table below) was positive $163 million compared to positive $194 million in the prior year. The decrease was due to the lower operating cash flow partly offset by the lower capital expenditure, net, as outlined above.

Cash conversion (Non-U.S. GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-U.S. GAAP measure) in relation to net income, was 97% in the quarter compared to 140% a year earlier. The decline was a result of the lower free operating cash flow and higher net income.

Net debt (Non-U.S. GAAP measure, see reconciliation table below) was $1,752 million as of June 30, 2025, which was $172 million higher than a year earlier, mainly due to that in the last twelve months, dividends paid and share repurchases were higher than free operating cash flow as well as due to foreign currency effects.

Total equity as of June 30, 2025, increased by $169 million compared to June 30, 2024. This was mainly due to net income of $717 million and $69 million in positive currency translation effects, partly offset by $337 million in share repurchases, including taxes and $282 million in dividend payments.

Leverage ratio (Non-U.S. GAAP measure, see reconciliation table below): On June 30, 2025, the Company had a leverage ratio of 1.3x compared to 1.2x on June 30, 2024, following that the 12 months trailing adjusted EBITDA (Non-U.S. GAAP measure) increased by around $103 million while net debt (Non-U.S. GAAP measure) per the policy increased by around $324 million.

First six months of 2025 development

Operating cash flow decreased by $107 million to $355 million compared to the prior year, mainly because the increase in operating working capital was larger than the increase in net income.

Capital expenditure, net (see definition in reconciliation table below) decreased by $78 million compared to the prior year. The level of capital expenditure, net, in relation to sales declined to 3.9% versus 5.5% a year earlier. The lower level of capital expenditure, net is mainly related to the lower activity level of footprint optimization in Europe and Americas and less capacity expansion, especially in Asia.

Free operating cash flow (Non-U.S. GAAP measure, see reconciliation table below) was positive $147 million compared to positive $176 million in the prior year. The decrease was due to the lower operating cash flow partly offset by the lower capital expenditure, net, as outlined above.

Cash conversion (Non-U.S. GAAP measure, see reconciliation table below) defined as free operating cash flow (Non-U.S. GAAP measure) in relation to net income, was 44% for the period, compared to 66% in the prior year. The decline was a result of the lower free operating cash flow and higher 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.

The following tables reconciles Income before income taxes, Net income attributable to controlling interest, Capital employed, which are inputs utilized to calculate Return On Capital Employed (“ROCE”), adjusted ROCE and Return On Total Equity (“ROE”). The Company believes this presentation may be useful to investors and industry analysts who utilize these adjusted non-U.S. GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods. Autoliv’s management uses the ROCE, adjusted ROCE and 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. Adjusted ROCE is annualized operating income and income from equity method investments, relative to average capital employed as adjusted to exclude certain non-recurring items. See definitions of "annualized operating income" and "average capital employed" in footnote to the tables below. The Company believes ROCE and adjusted ROCE are useful indicators 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. See definitions of "annualized income" "and "average total equity" in footnote to the tables below. 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.

Accordingly, the tables below reconcile from U.S. GAAP to the equivalent non-U.S. GAAP measure.

Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income"

(Dollars in millions)	Three Months Ended June 30, — 2025	2024	Six Months Ended June 30, — 2025	2024
Operating income (GAAP)	$ 247	$ 206	$ 502	$ 400
Non-GAAP adjustments:
Less: Capacity alignments	1	14	3	16
Less: Antitrust related items	3	1	1	4
Total non-GAAP adjustments to operating income	4	15	5	20
Adjusted Operating income (Non-GAAP)	$ 251	$ 221	$ 506	$ 420

Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin"

2025	2024	2025	2024
Operating margin (GAAP)	9.1 %	7.9 %	9.5 %	7.7 %
Non-GAAP adjustments:
Less: Capacity alignments	0.0 %	0.5 %	0.1 %	0.3 %
Less: Antitrust related items	0.1 %	0.0 %	0.0 %	0.1 %
Total non-GAAP adjustments to operating margin	0.1 %	0.6 %	0.1 %	0.4 %
Adjusted Operating margin (Non-GAAP)	9.3 %	8.5 %	9.6 %	8.0 %

Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income taxes"

(Dollars in millions)	Three Months Ended June 30, — 2025	2024	Six Months Ended June 30, — 2025	2024
Income before income taxes (GAAP)	$ 221	$ 183	$ 453	$ 356
Non-GAAP adjustments:
Less: Capacity alignments	1	14	3	16
Less: Antitrust related items	3	1	1	4
Total non-GAAP adjustments to Income before income taxes	4	15	5	20
Adjusted Income before income taxes (Non-GAAP)	$ 225	$ 198	$ 458	$ 377

Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income"

(Dollars in millions)	Three Months Ended June 30, — 2025	2024		2025		2024
Net income (GAAP)	$ 168	$	139	$	335	$	266
Non-GAAP adjustments:
Less: Capacity alignments	1		14		3		16
Less: Antitrust related items	3		1		1		4
Less: Tax on non-GAAP adjustments	(1	)	(1	)	(1	)	(2	)
Total non-GAAP adjustments to Net income	3		14		4		18
Adjusted Net income (Non-GAAP)	$ 171	$	152	$	339	$	284

Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net income attributable to controlling interest"

(Dollars in millions)	Three Months Ended June 30, — 2025	2024		2025		2024
Net income attributable to controlling interest (GAAP)	$ 167	$	138	$	334	$	265
Non-GAAP adjustments:
Less: Capacity alignments	1		14		3		16
Less: Antitrust related items	3		1		1		4
Less: Tax on non-GAAP adjustments	(1	)	(1	)	(1	)	(2	)
Total non-GAAP adjustments to Net income attributable to controlling interest	3		14		4		18
Adjusted Net income attributable to controlling interest (Non-GAAP)	$ 170	$	152	$	338	$	283

Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share - diluted"

(Per share data)	Three Months Ended June 30, — 2025	2024		2025		2024
Earnings per share - diluted (GAAP)	$ 2.16	$	1.71	$	4.31	$	3.23
Non-GAAP adjustments:
Less: Capacity alignments	0.02		0.17		0.04		0.20
Less: Antitrust related items	0.03		0.01		0.02		0.05
Less: Tax on non-GAAP adjustments	(0.01	)	(0.02	)	(0.01	)	(0.02	)
Total non-GAAP adjustments to Earnings per share - diluted	0.04		0.17		0.05		0.22
Adjusted Earnings per share - diluted (Non-GAAP)	$ 2.21	$	1.87	$	4.36	$	3.45
Weighted average number of shares outstanding - diluted	77.3		81.1		77.5		82.1

Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital Employed"

	Three Months Ended June 30, — 2025	2024	Six Months Ended June 30, — 2025	2024
Return on capital employed 1) (GAAP)	23.8 %	21.0 %	24.8 %	20.4 %
Non-GAAP adjustments:
Less: Capacity alignments	0.1 %	1.3 %	0.2 %	0.8 %
Less: Antitrust related items	0.2 %	0.1 %	0.1 %	0.2 %
Total non-GAAP adjustments to Return on capital employed 1)	0.4 %	1.5 %	0.2 %	1.0 %
Adjusted Return on capital employed 1) (Non-GAAP)	24.1 %	22.5 %	25.0 %	21.4 %
Annualized adjustment 2) on Return on capital employed 1)	$ 16	$ 60	9.3	40.1
1) Annualized operating income and income from equity method investments, relative to average capital employed. The average capital employed amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period.
2) The quarterly annualized adjustment to the operating income and income from equity method investments amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the operating income and income from equity method investments amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four.

Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity"

	Three Months Ended June 30, — 2025	2024		2025		2024
Return on total equity 1) (GAAP)	27.7	%	23.4	%	28.2	%	21.8	%
Non-GAAP adjustments:
Less: Capacity alignments	0.2	%	2.2	%	0.3	%	1.3	%
Less: Antitrust related items	0.4	%	0.2	%	0.1	%	0.3	%
Less: Tax on non-GAAP adjustments	(0.1	)%	(0.2	)%	(0.1	)%	(0.2	)%
Total non-GAAP adjustments to Return on total equity 1)	0.5	%	2.2	%	0.3	%	1.4	%
Adjusted Return on total equity 1) (Non-GAAP)	28.2	%	25.6	%	28.5	%	23.2	%
Annualized adjustment 2) on Return on total equity 1)	$ 13	$	54		7.5		36.1
1) Annualized net income relative to average total equity. The average total equity amount is calculated as an average of the opening balance amount and the closing balance amounts for each quarter included in the period.
2) The quarterly annualized adjustment to net income amount is calculated as the quarterly amount multiplied by four. The year-to-date annualized adjustment to the net income amount is calculated as the year-to-date amount divided by the quarterly period number (two, three or four) multiplied by four.

Autoliv from time to time enters into “debt-related derivatives” (DRDs) as a part of its debt management and as part of efficiently managing the Company’s overall cost of funds. Creditors and credit rating agencies use net debt adjusted for DRDs in their analyses of the Company’s debt, therefore we provide this non-U.S. GAAP measure. DRDs are fair value adjustments to the carrying value of the underlying debt. Also included in the DRDs is the unamortized fair value adjustment related to a discontinued fair value hedge that will be amortized over the remaining life of the debt. By adjusting for DRDs, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.

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

(Dollars in millions)

Short-term debt	June 30, 2025 — $ 679	$	540	$	455
Long-term debt	1,372		1,565		1,540
Total debt	2,051		2,105		1,996
Cash and cash equivalents	(237	)	(322	)	(408	)
Debt issuance cost/Debt-related derivatives, net	(62	)	4		(8	)
Net debt	$ 1,752	$	1,787	$	1,579

The non-U.S. GAAP measure “Net debt” is also used in the non-U.S. GAAP measure “Leverage ratio”. 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)

(Dollars in millions) — Net debt 1)	June 30, 2025 — $ 1,752	$	1,787	$	1,579
Pension liabilities	167		163		140
Net debt per the Policy	1,919		1,950		1,720
Net income 2)	717		688		627
Income taxes 2)	255		246		150
Interest expense, net 2,3)	96		97		89
Other non-operating items, net 2)	19		16		8
Income from equity method investments 2)	(6	)	(6	)	(6	)
Depreciation and amortization of intangibles 2)	390		386		384
Capacity alignments, antitrust related matters and the Andrews litigation settlement 2)	12		23		128
EBITDA per the Policy (Adjusted EBITDA)	$ 1,483	$	1,449	$	1,380
Leverage ratio	1.3		1.3		1.2

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 operating 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 operating cash flow, see the table below. Management uses the non-U.S. GAAP measure “cash conversion” to analyze the proportion of net income that is converted into free operating cash flow. The measure is a tool to evaluate how efficiently the Company utilizes its resources. For details on cash conversion, see the table below.

Reconciliation of GAAP measure "Operating cash flow" to "Free operating cash flow" and "Cash conversion"

(Dollars in millions)

	Three Months Ended June 30, — 2025	2024		2025		2024
Net income	$ 168	$	139	$	335	$	266
Changes in operating working capital	15		128		(164	)	14
Depreciation and amortization	100		96		195		192
Gain on divestiture of property	0		—		(6	)	—
Other, net	(5	)	(23	)	(6	)	(9	)
Operating cash flow	277		340		355		462
Expenditures for property, plant and equipment	(115	)	(154	)	(217	)	(294	)
Proceeds from sale of property, plant and equipment	1		8		9		8
Capital expenditure, net 1)	(114	)	(146	)	(208	)	(286	)
Free operating cash flow 2)	$ 163	$	194	$	147	$	176
Cash conversion 3)	97	%	140	%	44	%	66	%
1) Defined as Expenditures for property, plant and equipment less Proceeds from sale of property, plant and equipment.
2) Operating cash flow less Capital expenditures, net.
3) Free operating cash flow relative to Net income.

Headcount

Total headcount	65,100	65,900	68,700
Whereof:
Direct personnel in manufacturing	48,000	48,800	51,100
Indirect personnel	17,100	17,100	17,500
Temporary personnel	9 %	10 %	9 %

As of June 30, 2025, total headcount (Full Time Equivalent) decreased by around 3,600, or 5.2%, compared to a year earlier, despite that organic sales (Non-U.S. GAAP measure, see reconciliation table above) increased by 3.4%. The indirect workforce decreased by around 400, or 2.3%, mainly reflecting our structural reduction initiatives. The direct workforce decreased by approximately 3,200, or 6.2%. The decrease was supported by an improvement in customer call-off accuracy which enabled us to accelerate operating efficiency improvements.

Compared to March 31, 2025, total headcount (Full Time Equivalent) decreased by around 800, or 1.3%. Indirect headcount was unchanged while direct headcount decreased by approximately 900, or 1.8%.

Full year 2025 guidance

In addition to the assumptions and our business and market update noted below, our full year 2025 guidance is based on our customer call-offs, as well as the achievement of our targeted cost compensation adjustments with our customers, including for the new tariffs, no further material changes to tariffs or trade restrictions, as compared to what is in effect as of July 10, 2025, as well as no significant changes in the macro-economic environment, changes to customer call-off volatility or significant supply chain disruptions.

Full year 2025 Guidance
Organic sales growth	Around 3%
Adjusted operating margin 1)	Around 10-10.5%
Operating cash flow 2)	Around $1.2 billion
Capital expenditures, net % of sales	Around 5%
1) Excluding effects from capacity alignments, antitrust related matters and other discrete items.
2) Excluding unusual items.
Full year 2025 Assumptions
LVP growth	Around 0.5% negative
Foreign currency impact on net sales	Around 0%
Tax rate 3)	Around 28%
3) Excluding unusual tax 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 June 30, 2025

• Deepal S09: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Seatbelts.

• Honda Ye P7 : Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Steering Wheel, Front Center Airbag, Seatbelts.

• Nio Firefly: Side Airbags, Front Center Airbag, Seatbelts.

• Nissan Roox: Seatbelts.

• Changan Avatr 06 : Side Airbags, Head/Inflatable Curtain Airbags, Front Center Airbag, Seatbelts.

• Chery Fengyun A9: Side Airbags, Head/Inflatable Curtain Airbags, Front Center Airbag, Seatbelts.

• Nissan Leaf: Driver/Passenger Airbags, Knee Airbag, Front Center Airbag, Seatbelts.

• Renault 4: Driver/Passenger Airbags, Steering Wheel.

• Suzuki eVitara: Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags, Knee Airbag, Steering Wheel.

• Daihatsu Move: Seatbelts.

• Lynk & Co 900: Side Airbags, Head/Inflatable Curtain Airbags, Front Center Airbag.

• Mitsubishi XFORCE : Driver/Passenger Airbags, Side Airbags, Head/Inflatable Curtain Airbags.

• In addition, we have two key EV launches with Chinese OEMs we cannot publish due to confidentiality.

Other Items

• On April 16, 2025, Autoliv announced it was named a 2025 Automotive News PACE Pilot Innovation to Watch. The recognition acknowledges post-pilot, pre-commercial innovations in the automotive and future mobility space. Autoliv was recognized for The Bernoulli Airbag Module. The Bernoulli Airbag Module addresses the challenge of inflating large airbags quickly and safely, and reducing heat generation and development costs by over 30%.

• On April 24, 2025, Autoliv announced it is entering a partnership with the ABB FIA Formula E World Championship, as the new Official Mobility Safety Partner. The partnership provides Autoliv with a platform to showcase its expertise and improve awareness of automotive safety in an electric racing setting.

• On April 25, 2025, Autoliv announced that it presented Omni Safety, at the Shanghai International Automobile Industry Exhibition 2025. Omni Safety is a safety system designed to address critical risks to occupants in reclined seating positions in the event of a collision. This system integrates advanced seatbelt and airbag systems and related functionalities to redefine occupant safety.

• On June 4, 2025, Autoliv hosted its Capital Markets Day, where it reiterated its 2025 guidance and financial targets, and announced a sustainable increase in shareholder returns, including launching a new share repurchase program and a 21% dividend increase for the third quarter to $0.85 per share.

• On May 28, 2025, the Company repaid a SEK 3,000 million loan to Swedish Export Credit Corporation. On the same day, the Company took out a new 1-year SEK 2,000 million loan with Swedish Export Credit Corporation.

• On June 30, 2025, Autoliv announced that Fredrik Westin decided to resign as the Chief Financial Officer and Executive Vice President, Finance of the Company for personal reasons and to pursue a position in continental Europe. He remains in his current position until December 31, 2025, unless otherwise agreed by the parties. Mikael Bratt, President and CEO of the Company, said, "We sincerely thank Fredrik for his valuable contributions to Autoliv and the executive management team over the past five years. We wish him and his family all the best as they relocate." The recruitment process for the successor Chief Financial Officer has been launched.

• In Q2 2025, Autoliv repurchased and retired 0.5 million shares of common stock at an average price of $99.81 per share under the Autoliv 2022-2025 stock purchase program. These were the last purchases under this program. It is replaced by the 2029 stock repurchase program. Under this new program, repurchases may be made from July 1, 2025 through December 31, 2029. The maximum value of aggregate repurchases under this program is $2.5 billion. Repurchases of stock may be made directly on the NYSE or indirectly through the repurchase of SDRs traded on the Stockholm Nasdaq.

ITEM 3. QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK

As of June 30, 2025, 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, 2024 filed with the SEC on February 20, 2025.

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 - OTH ER 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 8 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. RI SK FACTORS

Except for below, as of June 30, 2025, 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, 2024 filed with the SEC on February 20, 2025.

RISKS RELATED TO INTERNATIONAL OPERATIONS

Our business is exposed to risks inherent in international operations

We currently conduct operations in various countries and jurisdictions, including locating certain of our manufacturing and distribution facilities internationally, which subjects us to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Some of these countries are considered growth markets and emerging markets. International sales and operations, especially in growth markets, subject us to certain risks inherent in doing business abroad, including: exposure to local economic conditions; unexpected changes in laws, regulations, trade, or monetary or fiscal policy, including interest rates, foreign currency exchange rates, and changes in inflation rates; foreign tax consequences; inability to collect, or delays in collecting, value-added taxes and/or other receivables associated with remittances and other payments by subsidiaries; exposure to local political turmoil and challenging labor conditions; changes in general economic and political conditions in countries where we operate, particularly in emerging markets; expropriation and nationalization; enforcing legal agreements or collecting receivables through foreign legal systems; wage inflation; currency controls, including lack of liquidity in foreign currency due to governmental restrictions, trade protection policies and currency controls, which may create difficulty in repatriating profits or making other remittances; compliance with the requirements of an increasing body of applicable anti-bribery laws; reduced intellectual property protection in various markets; investment restrictions or requirements; and the imposition of product tariffs and the burden of complying with a wide variety of international and U.S. export laws. The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. The Organization for Economic Co-operation and Development (“OECD”) continues its base erosion and profit shifting (“BEPS”) project begun in 2015 with new proposals for a global minimum tax, further development of a coordinated set of rules for taxation and the allocation of taxing rights between jurisdictions. These proposals, if adopted by countries in which we operate, could result in changes to tax policies, including transfer pricing policies, which could ultimately impact our tax liabilities.

Changes in tax laws or policies by the U.S. or foreign jurisdictions could result in a higher effective tax rate on our worldwide earnings, and any such change could have a material adverse effect on our business prospects, cash flows, operating results and financial condition.

Our international operations also depend upon favorable trade relations between the countries where we manufacture and sell products and those foreign countries in which our customers and suppliers have operations. The current U.S. presidential administration has created uncertainty about the future relationship between the U.S. and its trading partners, including with respect to the trade policies and agreements, treaties, government regulations and tariffs that could apply to trade between the U.S. and other nations. In February 2025, additional tariffs have been applied to imports from China and China responded with retaliatory tariffs on the import of American goods. In April 2025, the U.S. presidential administration imposed tariffs on all imports with limited exceptions. This included additional tariffs to imports from China and China again responded with retaliatory tariffs on the import of American goods. Changes in national policy, other governmental action related to tariffs or international trade agreements, changes in social, political, regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where the Company currently manufactures and sells products, and any resulting negative sentiments towards the Company as a result of such changes could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our cash flows, operating results and financial condition.

Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these markets are particularly important elements of our strategy. As a result, our exposure to the risks described above may be greater in the future, and our exposure to risks associated with developing countries, such as the risk of political upheaval and reliability of local infrastructure, may increase. It could also impact importing certain foreign-produced vehicles into the U.S. Changes in national policy or continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our cash flows, operating results and financial condition. Additionally, such trade restrictions or material increases in tariffs could impact our targets, earnings guidance, and estimates. The ultimate impact of any tariffs, including any related responses, are uncertain and will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope, and nature of the tariffs. Any or all of these actions could adversely affect our business, financial condition and cash flows. Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these markets are particularly important elements of our strategy. As a result, our exposure to the risks described above may be greater in the future, and our exposure to risks associated with developing countries, such as the risk

of political upheaval and reliability of local infrastructure, may increase. It could also impact importing certain foreign-produced vehicles into the U.S. Changes in national policy or continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our cash flows, operating results and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUI TY SECURITIES AND USE OF PROCEEDS

Stock repurchase program

The following table provides information with respect to common stock repurchased by the Company during the three months period ended June 30, 2025.

Period	New York Stock Exchange (NYSE) — 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)
April 1-30, 2025	112,339	$ 90.79	10,805,833	6,194,167
May 1-31, 2025	270,911	$ 100.26	11,076,744	5,923,256
June 1-30, 2025	127,111	$ 106.82	11,203,855	5,796,145

(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) The average price paid per share in U.S. dollars exclude brokerage commissions and other costs of execution.

(3) In November 2021, the Company announced that its Board of Directors approved a 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. On November 11, 2024, the Company announced that its Board of Directors approved the extension of this stock repurchase program through the end of 2025. On June 4, 2025, the Company announced that its Board of Directors approved the termination of the existing stock repurchase program as of June 30, 2025 and that it would be succeeded by a new stock repurchase program that authorizes the Company to repurchase up to $2.5 billion of common shares and would operate from July 1, 2025 through December 31, 2029.

ITEM 3. DEFAULTS UPO N SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAF ETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On April 4, 2025 , Staffan Olsson , Executive Vice President, Operations , adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell 50% of his shares of the Company's common stock he would acquire upon the vesting of restricted stock units and performance stock units in February 2026. These sales are intended to cover vesting taxes and would occur between February 17, 2026 and March 31, 2026.

ITEM 6. E XHIBITS

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	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).
4.6	Amended and Restated Agency Agreement, dated March 14, 2025, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 16, 2025).
4.7	Base Listing Particulars Agreement, dated March 14, 2025, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 16, 2025).
4.8	Amended and Restated Programme Agreement, dated March 14, 2025, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.8 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 16, 2025).
4.9	General Terms and Conditions for Swedish Depository Receipts in Autoliv, Inc. representing common shares in Autoliv, Inc., effective as of April 8, 2024, with Skandinaviska Enskilda Banken AB (publ) serving as custodian, incorporated herein by reference to Exhibit 4.9 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2024).
10.1*	Secondment Agreement, dated June 1, 2025, among Autoliv, Inc., Autoliv Asia ROH Co., Ltd., and Colin Naughton.
10.2*	Amendment No. 1, dated May 15, 2025, effective as of December 31, 2024, to Employment Agreement, effective as of January 31, 2022, between Autoliv (Shanghai) Management Co. Ltd. and Sng Yih.
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.
101.INS*	Inline XBRL Instance Document – The instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
104*	Cover Page Interactive Data File (embedded within the inline XBRL document).

Filed herewith.

SIGNA TURE

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: July 18, 2025

AUTOLIV, INC.

(Registrant)

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

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