Årsredovisning 2025

20
RISKS RELATED TO INTELLECTUAL PROPERTY
If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may
be impaired
We have developed a considerable amount of proprietary technology related to automotive safety systems and rely on a number of
patents to protect such technology. Our intellectual property plays an important role in maintaining our competitive position in a number
of the markets we serve. At present, we hold more than 6,600 patents and patent applications covering a large number of innovations
and product ideas, mainly in the fields of seatbelt and airbag technologies. In addition to our in-house research and development
efforts, we seek to acquire rights to new intellectual property through corporate acquisitions, asset acquisitions, licensing and joint
venture arrangements. Our patents and licenses expire on various dates during the period from 2026 to 2045. We do not expect the
expiration of any single patent or license to have a material adverse effect on our business, operating results and financial condition.
Developments or assertions by or against us relating to intellectual property rights could negatively impact our business. We primarily
protect our innovations with patents and vigorously protect and defend our patents, trademarks and know-how against infringement and
unauthorized use. If we are not able to protect our intellectual property and our proprietary rights and technology, we could lose those
rights and incur substantial costs policing and defending those rights. We also generate license revenue from these patents, which we
may lose if we do not adequately protect our intellectual property and proprietary rights. Our means of protecting our intellectual
property, proprietary rights and technology may not be adequate, and our competitors may independently develop technologies that are
similar or superior to our proprietary technologies, duplicate our technologies, or design around the patents we own or license. In
addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the U.S. and we
may encounter significant problems in protecting and defending our intellectual property rights in certain foreign jurisdictions. This could
make it difficult for us to stop the infringement of our patents or misappropriation of our other intellectual property rights. Proceedings to
enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects
of our business. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.
We may not be able to protect our proprietary technology and intellectual property rights, which could result in the loss of our
rights or increased costs
Although we believe that our products and technology do not infringe the proprietary rights of others, third parties may assert
infringement claims against us in the future. Additionally, we license proprietary technology, from third parties, which is covered by
patents, and we cannot be certain that any such patents will not be challenged, invalidated, or circumvented. Such licenses may also
be non-exclusive, meaning our competition may also be able to access such technology. Further, we expect to continue to expand our
products and services and expand into new businesses, including through developing new products, acquisitions, joint ventures and
joint development agreements, which could increase our exposure to patent and other intellectual property claims from competitors and
other parties. If claims alleging patent, copyright or trademark infringement are brought against us and are successfully prosecuted
against us, they could result in substantial costs. If a successful claim is made against us and we fail to develop non-infringing
technology, our business, operating results and financial condition could be materially adversely affected. In addition, certain of our
products utilize components that are developed by third parties and licensed to us. If claims alleging patent, copyright or trademark
infringement are brought against such licensors and successfully prosecuted, they could result in substantial costs, and we may not be
able to replace the functions provided by these licensors. Alternate sources for the technology currently licensed to us may not be
available in a timely manner, may not provide the same functions as currently provided or may be more expensive than products
currently used. We may develop proprietary information through our in-house research and development efforts, consulting
arrangements or research collaborations with other entities or organizations. We may seek to protect this proprietary information by
entering into confidentiality agreements or consulting, services or employment agreements that contain non-disclosure and non-use
provisions with our employees, consultants, scientific advisors and other third parties. However, we may fail to enter into the necessary
agreements, and even if entered into, these agreements may be breached or may otherwise fail to prevent disclosure, third-party
infringement or misappropriation of our proprietary information.
We may not be able to respond quickly enough to changes in technology and technological risks and to develop our
intellectual property into commercially viable products
Changes in legislative, regulatory, or industry requirements or in competitive technologies may render certain of our products obsolete
or less attractive to our customers. We currently license certain proprietary technology to third parties and, if such technology becomes
obsolete or less attractive, those licensees could terminate our license agreements, which could adversely affect our operating results.
Our ability to anticipate changes in technology and regulatory standards and to successfully develop and introduce new and enhanced
products on a timely basis will be a significant factor in our ability to remain competitive. We cannot provide assurance that we will be
able to achieve the technological advances that may be necessary for us to remain competitive or that certain of our products will not
become obsolete. We are also subject to the risks generally associated with new product introductions and applications, including lack
of market acceptance, delays in product development and failure of products to operate properly. As part of our business strategy, we
may from time to time seek to acquire businesses or assets that provide us with additional intellectual property. We may experience
problems integrating acquired technologies into our existing technologies and products, and such acquired intellectual property may be
subject to known or contingent liabilities such as infringement claims.

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Some of our products and technologies may use “open source” software, which may restrict how we use or distribute our
products or require that we release the source code of certain products subject to those licenses
Some of our products and technologies may incorporate software licensed under so-called “open source”licenses. In addition to risks
related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as
open source licensors generally do not provide warranties or controls on origin of the software. Additionally, open source licenses
typically require that source code subject to the license be made available to the public and that any modifications or derivative works to
open source software continue to be licensed under open source licenses. These open source licenses typically mandate that
proprietary software, when combined in specific ways with open source software, become subject to the open source license. If we
combine our proprietary software in such ways with open source software, we could be required to release the source code of our
proprietary software. We take steps to ensure that our proprietary software is not combined with, and does not incorporate, open source
software in ways that would require our proprietary software to be subject to an open source license. However, few courts have
interpreted open source licenses; therefore, the way these licenses may be interpreted and enforced is subject to some uncertainty.
RISKS RELATED TO GOVERNMENT REGULATIONS AND TAXES
Our business may be adversely affected by laws or regulations, including environmental, occupational health and safety, and
other governmental regulations
We are subject to various federal, state, local and foreign laws and regulations, including those related to environmental, occupational
health and safety, financial, and other requirements. We cannot predict the substance or impact of pending or future legislation or
regulations, or the application thereof. The introduction of new laws or regulations, changes in existing laws or regulations, or  changes
in their interpretations, could increase the costs of doing business for us, our customers, or our suppliers, or restrict our actions and
adversely affect our business, operating results, cash flows, and financial condition. Our operations are subject to environmental and
safety laws and regulations governing, among other things, emissions to air, discharges to waters and the generation, handling,
storage, transportation, treatment and disposal of waste and other materials. Operating automotive parts manufacturing facilities entails
risks in these areas, and we cannot assure that we will not incur material costs or liabilities as a result. Additionally, environmental laws,
regulations, and permits and the enforcement thereof change frequently and have tended to become increasingly stringent over time,
which may necessitate substantial capital expenditures or operating costs or require changes of production processes. Although we
have no known pending material environmental issues, there is no assurance that we will not be adversely impacted by environmental
costs, liabilities, or claims in the future, whether under existing laws and regulations or those adopted or imposed in the future. Our
costs, liabilities, and obligations relating to environmental matters may have a material adverse effect on our business, operating
results, cash flows, and financial condition. Our facilities in the U.S. are subject to regulation by the Occupational Safety and Health
Administration (“OSHA”), which oversees the protection of worker health and safety. In addition, the OSHA hazard communication
standard requires us to maintain information about hazardous materials used or produced in our operations and to provide this
information to employees, state and local governmental authorities and residents. We are also subject to occupational safety
regulations in other countries. Our failure to comply with government occupational safety regulations, including OSHA requirements, or
general industry standards relating to employee health and safety, recordkeeping, or monitoring occupational exposure to regulated
substances could expose us to liability, enforcement actions, fines and penalties, and could have a material adverse effect on our
business, operating results, cash flows, and financial condition. Although we employ safety procedures in the design and operation of
our facilities, there is a risk that an accident or injury to one of our employees could occur in one of our facilities. Any accident or injury
to our employees could result in litigation, manufacturing delays and harm to our reputation, which could negatively affect our business,
operating results, and financial condition.
Our business may be adversely affected by changes in automotive safety regulations or concerns that drive further regulation
of the automobile safety market
Government vehicle safety regulations are a key driver in our business. Historically, these regulations have imposed increasingly
stringent safety requirements for vehicles. Such regulations have a positive impact on driver awareness and acceptance of automotive
safety products and technology. More stringent safety regulations often require vehicles to include more safety CPV and more
advanced safety products, which has been a driver of growth in our business. However, these regulations are subject to change based
on a number of factors outside our control, including new scientific or medical data, adverse publicity regarding the industry recalls and
safety risks associated with airbags or seatbelts (for example, risks to children and small adults), domestic and foreign political
developments or considerations, and litigation relating to our products and our competitors’ products. Changes in government
regulations in response to these and other factors could have a severe impact on our business. Although we believe that safety will
continue to be a regulatory priority over time, if government priorities shift and we are unable to adapt to changing regulations, our
business may suffer material adverse effects. Our regulatory obligations could increase as federal and local regulators impose more
stringent compliance and reporting requirements in response to product recalls and safety issues in our industry. We are subject to
existing stringent requirements under the National Traffic and Motor Vehicle Safety Act of 1966 (the “Vehicle Safety Act”),including a
duty to report safety defects with our products, subject to strict timing requirements. The Vehicle Safety Act imposes potentially
significant civil penalties for violations, including the failure to comply with such reporting obligations. We are also subject to the existing
U.S. Transportation Recall Enhancement, Accountability and Documentation (“TREAD”)Act, which requires equipment manufacturers,
such as Autoliv, to comply with “Early Warning” reporting requirements by providing NHTSA with certain information, including
information related to defects or reports of injury related to our products. The TREAD Act imposes criminal liability for violations if a
defect subsequently causes death or bodily injury. In addition, the Vehicle Safety Act authorizes NHTSA to require a manufacturer to
recall and repair vehicles that contain safety defects or fail to comply with U.S. federal motor vehicle safety standards. Sales into foreign
countries may be subject to similar regulations. Due to the record recall of airbag inflators of one of our competitors, NHTSA has
become more active in requesting information from suppliers and vehicle manufactures regarding potential product defects.

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Negative or unexpected tax developments could adversely affect our effective tax rate, operating results and financial
condition
Changes in, or changes in the application of, U.S. or foreign tax laws, regulations or accounting principles with respect to matters such
as tax base, tax rates, transfer pricing, dividends and restrictions on certain forms of tax relief or limitations on favorable tax treatment
could affect the calculation of our income taxes and other tax liabilities, our effective tax rate, and the  carrying value of our deferred tax
assets. Our annual tax rate is based on our income and the tax laws in the jurisdictions in which we operate. Because of our global
operations we face uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. Significant
judgment and estimation are required in determining our effective tax rate and in evaluating our tax positions, in many cases where the
ultimate tax determination is uncertain. Although we believe that our tax estimates are reasonable, the final determination of our tax
liability may be different from what is reflected in our historical income tax provisions and accruals. We are regularly examined by tax
authorities around the world and in a number of jurisdictions, we are currently under examination, which inherently creates uncertainty.
Although we periodically assess the likelihood of adverse outcomes, negative or unexpected results from one or more of such reviews
and audits, including any related interest or penalties imposed by governmental authorities, could increase our effective tax rate and
adversely impact our operating results, cash flows, and financial condition. For example, we are currently in the early stages of a
dispute with the Mexican tax authorities in relation to various issues dealing with certain manufacturing activities that occur in Mexico.
An adverse result in this or other similar disputes could have a materially negative impact on our financial results. The effective tax
rates used for interim reporting are based on our projected full-year geographic earnings mix and take into account projected tax costs
on intercompany dividends from lower tier subsidiaries. Changes in currency exchange rates, earnings mix among taxing jurisdictions,
or the ability of our subsidiaries to pay dividends could impact our reported effective tax rates, or cause fluctuations in the tax rate from
quarter to quarter. Certain anti-trust judgments or settlements may not be tax deductible, which could have a material negative impact
to our annual tax rate. A number of other factors may also increase our effective tax rate, which could have an adverse impact on our
profitability and operating results. Due to our numerous foreign operations, our tax rate may be impacted by our global mix of earnings if
our pre-tax income is lower than anticipated in countries with lower statutory tax rates and/or is higher than anticipated in countries with
higher statutory tax rates. Based on U.S. GAAP, we do not record current or deferred tax liabilities on permanent investments in our
foreign subsidiaries. See Note 5, Income Taxes, to the Consolidated Financial Statements in this Annual Report.
We may not be able to fully realize our deferred tax assets
We currently carry deferred tax assets, net of valuation allowances, resulting from deductible temporary differences and tax loss carry-
forwards, both of which will reduce taxable income in the future. However, deferred tax assets may only be realized against taxable
income. The amount of our deferred tax assets could be reduced, from time to time, due to adverse changes in our operations or in
estimates of future taxable income from operations during the carry-forward period as a result of a deterioration in market conditions or
other circumstances. Any such reduction would adversely affect our income in the period of the adjustment. Additional information on
our deferred tax assets is included in Note 5, Income Taxes, to the Consolidated Financial Statements in this Annual Report.
Item 1B. Unresolved Staff Comments
Not applicable.

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Item 1C. Cybersecurity
Autoliv maintains a cybersecurity program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats as an
integrated part of the Company’s overall operations. The objective is to provide protection against cybersecurity threats to our
employees, operations, data, and products.
Cybersecurity risk management and strategy
Cybersecurity risk management for the Company is undertaken both through dedicated cybersecurity risk management processes and
within the Company’soverall Enterprise Risk Management program, which is overseen by the Audit, Risk, and Compliance Committee
of the Company’sBoard of Directors.
Autoliv has established an Enterprise Risk Management framework aligned to the ISO 31000:2019 to ensure that the context,
principles, and processes for risk management are embedded and integrated with the operations of the company. Risks across the
Autoliv risk universe, including cybersecurity, are assessed with bottom-up risk assessments and subsequently are aggregated and
reported to the Audit, Risk, and Compliance Committee of the Company’sBoard of Directors.
Autoliv utilizes the National Institute of Standards and Technology (“NIST”)Cybersecurity Framework in combination with other
corresponding and partially mandated frameworks to guide cybersecurity risk management. This approach includes the identification,
assessment, response, and management of risks arising from cybersecurity threats that may result in material adverse effects on the
confidentiality, integrity, and availability of our business, data and information systems. The Company contracts with third parties to
assess Autoliv’s cybersecurity program relative to its peers, utilizing the NIST framework as a baseline. Furthermore, Autoliv is
pursuing, under TISAX (Trusted Information Security Assessment Exchange), an assessment and exchange mechanism for information
security in the automotive industry, as well as compliance with road vehicle cybersecurity requirements as applicable to the supply
chain under ISO 21434.
Frequent testing/auditing activities, bottom-up cybersecurity risk assessments, vulnerability scanning, monitoring of external threat
intelligence and supplier risk sources, and 24/7 incident monitoring are executed by the cybersecurity function to inform our
understanding of the cybersecurity risk landscape, including solutions from third-party service providers, and what areas of
enhancement to prioritize. Further input is gained from regular maturity assessments executed by third parties as well as TISAX
assessments executed by external audit bodies.
Autoliv combines expertise from our internal cybersecurity function with additional specialist capacities from external consultants and
partners as may be needed from time to time. Separately, because we understand the risks associated with engaging third party
vendors, such as service providers, consultants and partners, in our cybersecurity risk management processes, we conduct security
assessments pre-engagement and monitor their work to mitigate any identified risks.
Autoliv has not experienced any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the
Company. Despite our efforts, there can be no assurance that our cybersecurity risk management processes and measures described
will be fully implemented, complied with or effective in protecting our systems and information. We face risks from cybersecurity threats
that, if realized, are reasonably likely to materially affect our business strategy, result of operations or financial condition. For a full
discussion of these cybersecurity risks, please see our Risk Factors in Item 1A.
Board and management governance
Management's Role
The Chief Information Security Officer (CISO) is responsible for overseeing the Company’scybersecurity practices. Our CISO joined
Autoliv in 2015. He has 30 years of information technology experience, including seven years as CISO. The CISO reports directly to the
CFO but, in line with the corporate governance model, the CISO’sactivities are formally governed through a management board, the
“Digitalization and IT Management Board” (“DITM Board”)comprised of the Chief Information Officer (CIO) and certain members of
Autoliv’sExecutive Management Team (“EMT”)representing engineering, supply chain management, operations and manufacturing,
quality and project management, finance, information technology, and divisional teams. The DITM Board meets at least quarterly with
cybersecurity as a standing agenda item.
In addition to the standing DITM Board meetings, the CISO, when needs arise, meets with the full EMT typically at least semi-annually
to report on, or discuss, specific cybersecurity-related topics.
The Cybersecurity function in Autoliv reports to the CISO. The cybersecurity function includes team members in all of the Company’s
divisions including technical security architects and incident response team members. The core team is supported by the broader
organization with security coordinators in each plant and tech center and additional functional security experts as deemed relevant,
such as in supply chain management and engineering. The function has the responsibility to operate day-to-day activities (e.g., testing,
incident monitoring and response, vulnerability scanning and awareness training) as well as to drive prioritized improvements (as
identified through the risk management processes), together with other relevant Autoliv functions and stakeholders. The security
operations center (“SOC”),part of the Cybersecurity function, monitors Autoliv for cyber incidents 24/7. A documented incident
response process and numerous documented playbooks provide the SOC guidance on how to respond for each type of incident,
including categorization and principles for escalation. Incidents are escalated in the organization according to defined criteria to engage
a level of authority that is deemed appropriate, such as the Corporate Crisis Management Team if necessary.

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Board of Directors Oversight
Our Board, in coordination with the Audit Risk and Compliance Committee (the "ARCC"), oversees the Company’sEnterprise Risk
Management process, including the management of risks arising from cybersecurity threats. Our Board has delegated the primary
responsibility to oversee cybersecurity matters to the ARCC. Both the Board and the ARCC periodically review the measures we have
implemented to identify and mitigate cybersecurity risks.
The ARCC receives information from the CISO and other members of management on at least a quarterly basis which is supplemented
by a more extensive briefing from the CISO and management on at least a semi-annual basis on cybersecurity matters, including
updates on cybersecurity training programs and the results of external assessments, as applicable. The CISO provides at least an
annual briefing to the Board of Directors on these same topics.
The routine reporting to the ARCC and the Board includes as appropriate the highlights from the full spectrum of work done within the
Company’scybersecurity program. The briefings by the CISO to the ARCC and Board also include the review of certifications and
cybersecurity maturity assessments by management and third parties.

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Item 2. Properties
Autoliv’s principal executive offices are located at Klarabergsviadukten 70, Section D5, SE-111 64, Stockholm, Sweden. Autoliv’s
various businesses operate in a number of production facilities and offices. Autoliv believes that its properties are adequately
maintained and suitable for their intended use and that the Company’sproduction facilities have adequate capacity for the Company’s
current and foreseeable needs. All of Autoliv’sproduction facilities and offices are owned or leased by operating (either subsidiary or
joint venture) companies.
AUTOLIV MANUFACTURING FACILITIES
Country/Company Location of Facility Items produced at Facility Owned/Leased
Brazil
Autoliv do Brasil Ltda. Taubaté Seatbelts, airbags and steering
wheels
Owned
Nova Goiana Seatbelts and steering wheels Leased
Canada
Autoliv Canada, Inc. Tilbury Airbag cushions Owned
VOA Canada, Inc. Collingwood Seatbelt webbing Owned
China
Autoliv (Baoding) Vehicle Safety Systems Co., Ltd Baoding Airbags and steering wheels Leased
Autoliv (Changchun) Vehicle Safety Systems Co., Ltd. Changchun Airbags and seatbelts Owned
Autoliv (China) Steering Wheel Co., Ltd. Fengxian/Shanghai Steering wheels Owned
Autoliv (Guangzhou) Vehicle Safety Systems Co., Ltd. Guangzhou Airbags and seatbelts Owned
Autoliv (Nanjing) Vehicle Safety Systems Co., Ltd. Nanjing Seatbelts Owned
Autoliv Shenda (Nanjing) Automotive Components Co., Ltd. Nanjing Seatbelt webbing Owned
Autoliv (Shanghai) Vehicle Safety Systems Co., Ltd. Shanghai Airbags Owned
Autoliv Shenda (Tai Cang) Automotive Safety Systems Co.,
Ltd.
Shanghai Seatbelt webbing Owned
Autoliv (Jiangsu) Automotive Safety Components Co., Ltd. Jintan Propellant, Airbag initiators and
Airbag inflators
Owned
Autoliv (Hefei) Vehicle Safety Systems Co., Ltd. Hefei Steering wheels Leased
Autoliv (China) Automotive Safety Systems Co., Ltd. Nantong Airbag cushions Owned
Mei-An Autoliv Co., Ltd. Taipei Seatbelts and airbags Leased
Estonia
AS Norma Tallinn Seatbelts and belt components Owned
France
Autoliv France SNC Gournay-en-Bray Airbags Owned
Livbag SAS Pont-de-Buis Airbag inflators Owned
N.C.S. Pyrotechnie et Technologies SAS Survilliers Airbag initiators and seatbelt
micro gas generators
Owned
Hungary
Autoliv Kft. Sopronkövesd Seatbelts Owned
India
Autoliv India Private Ltd. Bangalore Seatbelts, airbags Owned
Mysore Seatbelt webbing and Airbag
Cushions
Owned
Badli Airbags and steering wheels Leased
Autoliv Inflators India Private Limited Pune Airbag and Airbag cushions Leased
Chennai Airbag inflators Owned
Indonesia
P.T. Autoliv Indonesia Jakarta Seatbelts, airbags and steering
wheels
Owned
Japan
Autoliv Japan Ltd. Chubu Airbags and steering wheels Owned
Hiroshima Airbags Owned
Tsukuba Airbags, seatbelts and steering
wheels
Owned

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Malaysia
Autoliv-Hirotako Sdn Bhd Kuala Lumpur Seatbelts, airbags and steering
wheels
Owned
Mexico
Autoliv Mexico East S.A. de C.V. Matamoros Steering wheels Owned
Autoliv Mexico S.A. de C.V. Lerma Seatbelts Owned
Autoliv Safety Technology de Mexico S.A. de C.V. Tijuana Seatbelts Leased
Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbag cushions Leased
Autoliv Steering Wheels Mexico S. de R.L. de C.V. Querétaro Airbags Leased
Autoliv Mexico S.A. de C.V. Aguascalientes Steering wheels Owned
Philippines
Autoliv Cebu Safety Manufacturing, Inc. Cebu Steering wheels Owned
Poland
Autoliv Poland Sp. zo.o. Olawa Airbag cushions Owned
Jelcz-Laskowice Airbags Owned
Romania
Autoliv Romania S.R.L. Brasov Seatbelts, seatbelt webbing,
seatbelt components, airbag
inflators, steering wheels
Owned
Lugoj Airbag cushions and airbags Owned
Resita Airbag cushions Owned
Sfantu Georghe Steering wheels Owned
Onesti Steering wheels Leased
Rovinari Seatbelts Owned
South Africa
Autoliv Southern Africa (Pty) Ltd. Krügersdorp Seatbelts and airbags Owned
South Korea
Autoliv Corporation Hwasung Airbags and steering wheels Owned
Spain
Autoliv BKI S.A.U. Valencia Airbags Owned
Sweden
Autoliv Sverige AB Vårgårda Airbag inflators Owned
Thailand
Autoliv Thailand Ltd. Chonburi Seatbelts, Airbags, Airbag
cushions and Steering wheels
Owned
Chonburi Seatbelt and Seatbelt
components
Leased
Tunisia
STE ASW3 Nadour El Fahs Steering wheels Owned &
Leased
STE ASW3 Nadour Nadhour Steering wheels Owned
Turkey
Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve
Ticaret A.S.
Gebze-Kocaeli Seatbelts Owned
Autoliv Cankor Otomotiv Emniyet Sistemleri Sanayi Ve
Ticaret A.S. Gebze-Subesi
Gebze-Kocaeli Airbags, Steering wheels and
Seatbelt components
Leased
USA
Autoliv ASP, Inc. Brigham City Airbag inflators Owned
Ogden Airbags Owned
Ogden Airbags and service parts Leased
Promontory Propellant Owned
Tremonton Airbag initiators and seatbelt
micro gas generators
Owned
Vietnam
Autoliv Vietnam Company Limited Quang Yen Airbag cushions Owned

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AUTOLIV TECHNICAL CENTERS AND CRASH TEST TRACKS
Country/Company Location Product(s) supported
China
Autoliv (Shanghai) Vehicle Safety System Technical
Center Co., Ltd.
Shanghai Inflators and pyrotechnics customer
applications, airbags, steering wheels and
seatbelts customer applications and platform
development with full-scale test laboratory
France
Autoliv France SNC Gournay-en-Bray Airbags and seatbelts customer applications
and platform development with full-scale test
laboratory
Livbag SAS Pont-de-Buis Inflator and pyrotechnic development
Germany
Autoliv B.V. & Co. KG Dachau Customer applications and platform
development, airbags with full-scale test
laboratory
India
Autoliv India Private Ltd. Bangalore Airbags and seatbelts with sled testing
Japan
Autoliv Japan Ltd. Tsukuba Airbags and seatbelts customer applications
and platform development with sled test
laboratory
Mexico
Autoliv Steering Wheels Mexico S. de R.L. de C.V. Queretaro Technical center airbag
Poland
Autoliv Poland Sp. zo.o. Jelcz Airbags applications and platform development
Romania
Autoliv Romania S.R.L. Brasov Seatbelts with sled test laboratory
South Korea
Autoliv Corporation Seoul Airbags and seatbelts customer applications
and platform development with sled test
laboratory
Sweden
Autoliv Development AB Vårgårda Research center
Autoliv Sverige AB Vårgårda Airbags customer applications, inflator and
special safety products development with full-
scale test laboratory
USA
Autoliv ASP, Inc. Auburn Hills Airbags, steering wheels, and seatbelts
customer applications and platform
development with sled test laboratory
Ogden Airbags, inflators and pyrotechnics customer
applications and platform development

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Item 3. Legal Proceedings
In the ordinary course of its business, the Company is subject to legal proceedings brought by or against the Company and its
subsidiaries.
See Note 19, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report for a summary of certain ongoing
legal proceedings. Such information is incorporated into this Part I, Item 3 – “Legal Proceedings”by reference.
Item 4. Mine Safety Disclosures
Not applicable.

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PART II
Item 5. Market for Registrant’sCommon Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Shareholder information
The primary exchange market for Autoliv’ssecurities is the New York Stock Exchange (NYSE) where Autoliv’scommon stock trades
under the symbol “ALV”. Autoliv’sSwedish Depositary Receipts (SDRs) are traded on NASDAQ Stockholm 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”.
Stock Performance Graph
The graph and table below show the cumulative total shareholder return for our common stock since December 31, 2020. The graph
compares our performance to that of the Standard & Poor’s500 Stock Index (S&P 500) and the Dow Jones US Auto Parts Index.
The comparison assumes $100 was invested at the closing price of our common stock on the NYSE on December 31, 2020. Each of
the returns shown assumes that all dividends paid were reinvested.
(USD) 12-31-2020 12-31-2021 12-31-2022 12-31-2023 12-31-2024 12-31-2025
Autoliv, Inc. $ 100.00 $ 114.51 $ 87.71 $ 129.84 $ 113.33 $ 147.54
S&P 500 100.00 128.71 105.40 133.10 166.40 196.16
Dow Jones US Auto Parts Index 100.00 119.82 86.99 85.80 65.38 74.11

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Number of shares
As of December 31, 2025, the number of shares of common stock outstanding, net of treasury shares, was 74.7 million, compared to
77.7 million as of December 31, 2024. The Company repurchased and immediately retired approximately 3.1 million shares during
2025.
During 2025, the weighted average number of shares outstanding (excluding dilution and treasury shares) decreased to 76.6 million
from 80.2 million in 2024. Assuming dilution, the weighted average number of shares outstanding for the full year 2025 decreased to
76.9 million from 80.4 million in 2024.
Granted Restricted Stock Units (RSUs) and Performance Share Units (PSUs) could increase the number of shares outstanding as of
December 31, 2025 by 0.6 million shares in the aggregate. Combined, this would add 0.8% to the number of shares outstanding as of
December 31, 2025.
On December 31, 2025, the Company had 2.6 million treasury shares compared to 2.7 million as of December 31, 2024.
Shareholders
As of February 13, 2026, there were 1,116 holders of record of our common stock. Many stockholders choose to own shares through
brokerage accounts and other intermediaries rather than as holders of record (excluding individual participants in securities positions
listing) so the actual number of stockholders is unknown but significantly higher.
Dividends
Autoliv has a history of paying quarterly cash dividends. Declared dividends are announced in press releases and published on
Autoliv’scorporate website. The Board of Directors revisits dividends on a quarterly basis. There can be no assurance that the Board of
Directors will declare dividends in the future. See Autoliv’scorporate website for additional details regarding historical dividends.
Stock incentive plan
Autoliv employees participate in the Autoliv, Inc. 1997 Stock Incentive Plan, as amended (the “Stock Incentive Plan”) and receive
Autoliv stock-based awards from time to time. Additional information regarding the securities authorized for issuance under the Stock
Incentive Plan is included in Item 12 of this Annual Report.
Autoliv has adopted a Stock Ownership Policy for Executives requiring the Company’sChief Executive Officer (CEO) to accumulate
and hold the number of Autoliv shares having a value of twice his annual base salary. For other executives, the minimum requirement
is, over time, a holding equal to each executive’sannual base salary.
Stock repurchase program
The following table provides information with respect to common stock repurchases by the Company during the three months period
ended December 31, 2025 on NYSE.
New York Stock Exchange (NYSE)
Period
Total Number of
Shares Purchased
(1)
Average Price
Paid per Share
(USD) (2)
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs (3)
Approximate Dollar Value of
Shares That May Yet Be
Purchased Under the Plans or
Programs (USD) (3)
October 1-31, 2025 42,804 $ 116.65 884,933 $ 2,395,006,964
November 1-30, 2025 796,722 $ 119.18 1,681,655 $ 2,300,054,081
December 1-31, 2025 421,199 $ 118.84 2,102,854 $ 2,250,000,205
(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) On June 4, 2025, the Company announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to
repurchase up to $2.5 billion of common shares and operates from July 1, 2025 through December 31, 2029.
Item 6. [RESERVED]

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Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations
IMPORTANT TRENDS
The discussions and analysis in this section are focused on the Company’sresults of operations for the year ended December 31, 2025
compared to the year ended December 31, 2024. Discussions of the Company's results of operations for the year ended December 31,
2024 compared to the year ended December 31, 2023 can be found in Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations in the Company's Form 10-K for the year ended December 31, 2024, which was filed
with the United States Securities and Exchange Commission on February 20, 2025.
Autoliv, Inc. (the “Company”)provides automotive safety systems to the automotive industry with a broad range of product offerings,
primarily passive safety systems. In the year ended December 31, 2025, a number of factors influenced the Company’sresults of
operations, including:
• Geopolitical uncertainties and tariffs
• Cost inflation moderated but remains somewhat elevated, especially for labor
• Growth impacted by LVP, shifting OEM landscape and safety content per vehicle
• Order intake impacted by shifts in technology, customer landscape and geopolitics.
• Strategic and structural initiatives
• Continued focus on operational excellence and quality
2025 2024
YEARS ENDED DEC. 31 (DOLLARS IN MILLIONS, EXCEPT EPS) Reported1) change Reported1) change
Global light vehicle production (in thousands) 90,268 3.9 % 86,895 (1.0) %
Consolidated net sales $ 10,815 4.1 % $ 10,390 (0.8) %
Operating income 1,088 11 % 979 42 %
Operating margin, % 10.1 0.6 pp 9.4 2.8 pp
Net income attributable to controlling interest 735 14 % 646 33 %
Earnings per share - diluted2) 9.55 19 % 8.04 40 %
Net cash provided by operating activities 1,157 9.3 % 1,059 7.8 %
Return on capital employed, % 26.4 1.5 pp 25.0 7.3 pp
1) Reported figures impacted by costs for capacity alignments and antitrust related matters. See section Items affecting comparability and Note 13 to the
Consolidated Financial Statements included herein.
2) Net of treasury shares.
GEOPOLITICAL UNCERTAINTIES AND TARIFFS
2025 saw global LVP increase by around 3.9% (according to S&P Global January 2026). Our sales to customers are based on
production schedule order quantities and delivery dates that are communicated to us by our customers, which we refer to as “call-off”
plans. Despite industry challenges such as chip shortages related to the Nexperia situation and the tariffs imposed in the beginning of
2025, which caused uncertainties regarding costs in the industry, we saw an improvement in call-off volatility in 2025. This improvement
supported our improvement in operating efficiency and productivity, including a reduction in direct workforce. However, customer call-off
volatility increased in the fourth quarter and remained higher than pre-pandemic levels, and low customer demand visibility and
changes to customer call-offs with short notice still had a negative impact on our production efficiency and profitability.
The effects of the new tariffs imposed in 2025 did not have a significant impact on our profitability in 2025, as we achieved customer
compensations for more than 80% of tariff costs. Including the dilutive effect of recovered tariffs, operating margin was negatively
impacted by around 20 bps. While it is our ambition and expectation to continue passing tariff costs on to our customers, there is
significant uncertainty as future recovery levels may vary. Geopolitical developments and the evolving trade environment are likely to
continue creating a challenging and unpredictable operating landscape. Any new, increased or modified tariffs or other trade restrictions
could materially affect our operations, customer relationships or cost recovery ability as well as contribute to the uncertainty of industry
expectations. We continue to closely monitor the tariff policy environment and remain prepared to be agile to adjust our commercial and
operational responses to any such developments.
INFLATION
Cost pressures from labor, in our own operations and related to our suppliers' labor costs, had a negative impact on our profitability in
2025. Most of the inflationary cost pressure was offset by customer price and other compensations. Changes in raw material costs had
a limited impact on our profitability in 2025. The Company expects limited raw material price impact also in 2026. We also expect
continued cost pressure from inflation relating mainly to labor, including increased labor costs for our suppliers, especially in Europe
and the Americas. The Company continues to execute on productivity and cost reduction activities to offset these cost pressures, and
we continue to seek inflation compensation from our customers. The continued uncertainty regarding the effects of tariffs and trade
restrictions may lead to a more adverse inflation environment.

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GROWTH IMPACTED BY LIGHT VEHICLE PRODUCTION, SHIFTING OEM LANDSCAPE AND SAFETY CONTENT PER VEHICLE
The most important driver for Autoliv’ssales is the LVP. In 2025, global LVP grew by 3.9%.
Light Vehicle Production1)
2025 2024 Change 2025 vs 2024
(000´)
units % global
(000´)
units % global
(000´)
units %
Americas 16,964 19% 16,968 20% (5) (0.0)%
North America 13,955 15% 14,021 16% (66) (0.5)%
South America 3,008 3.3% 2,947 3.4% 61 2.1%
Europe 16,860 19% 17,035 20% (175) (1.0)%
Asia 54,065 60% 50,584 58% 3,481 6.9%
China 32,182 36% 29,248 34% 2,934 10.0%
Japan 7,869 8.7% 7,732 8.9% 137 1.8%
South Korea 4,049 4.5% 4,072 4.7% (23) (0.6)%
India 6,027 6.7% 5,614 6.5% 413 7.4%
Other Asia 3,938 4.4% 3,918 4.5% 20 0.5%
Other 2,379 2.6% 2,308 2.7% 71 3.1%
Global Total 90,268 86,895 3,373 3.9%
1) Source: S&P Global, January 2026
The increase in LVP in China of 10% was significantly more than what was expected in the beginning of the year, driven mainly by a
multitude of successful launches of new models by domestic Chinese OEMs and in particular by increased exports, mainly to Asian
markets. The LVP decline of 1.0% in Europe was impacted by affordability issues and technology uncertainties. The LVP decline of
0.5% in North America was impacted by the EV market development, U.S. tariffs and growing consumer uncertainty, Japan increased
by 1.8%, mainly impacted by domestic demand and US exports, supplemented by Japanese OEM production repatriation. LVP in India
increased by 7.4%, driven by reduced sales tax on cars and multiple new model launches.
The different LVP growth rates for different regions in 2025 was dilutive to global safety content per vehicle (CPV), as LVP in several
high CPV regions declined while LVP increased in some lower CPV regions. The highest CPV region is North America, and its share of
global LVP declined by 0.5pp to 15.5%. The second highest CPV region is Europe, and its share of global LVP declined by 1.0pp, to
18.7%. India, a major region with the lowest CPV, which saw its share of LVP increase from 6.5% to 6.7%. CPV in China is below the
global average, and China’s share of global LVP increased from 33.7% to 35.7%. Japan’s share decreased to 8.7% from 8.9%.
Additional dilution to global CPV came from the difference in growth within China, where lower CPV models and segments grew
strongly while higher CPV models and segments growth was limited or negative. LVP growth for Domestic Chinese OEMs with typically
lower CPV was 16% compared to global OEMs with typically higher CPV saw LVP decline by 1.3%. Combined with the regional growth
differences, we estimate this shift in LVP mix contributed negatively to our sales growth by between 2 to 3 pp. The Company estimates
that its global market share was unchanged at around 44% in 2025 compared to 2024.
The strong growth of Chinese OEMs' LVP in both domestic and export markets is a trend the Company expects to continue. It is
therefore instrumental to have a solid position with this customer category. Over the past few years, the Company has taken significant
steps to strengthen its position with Chinese OEMs through investments in manufacturing and R,D&E capacities, as well as by signing
several strategic co-operation agreements with Chinese OEMs. These efforts have supported an improved performance, as shown by a
strong order intake, with 30% of the Company's total order intake value in 2025 coming from Chinese OEMs. Additionally, the
Company's sales to Chinese OEMs grew by 23% in 2025.
Another important market trend is the rapid growth of the automotive market in India. In recent years, India's significance for the
automotive industry has increased substantially. In 2025, LVP in India represented 6.7% of global LVP. As safety content per vehicle
has also grown rapidly over the past few years, India's importance for the Company has risen from around 2% of total sales in 2020 to
5% in 2025. Through timely investments in capacity for both manufacturing and R, D&E, the Company is the clear market leader in
India.
Despite macro-economic uncertainties in parts of the world, we expect light vehicle markets to grow both in the medium and long term,
driven by pent-up end user demand and a growing GDP/capita.
Due to more stringent crash test rating requirements by institutes such as Euro NCAP, increased government regulations and
increasing consumer demand for more safety in emerging markets, the Company sees vehicle manufacturers installing more airbags
and more advanced seatbelt systems in vehicles. This generally takes place when new models are introduced. The safety standards of
vehicles are increasing in China, India, and other growth markets, partially due to new government regulations and crash test rating
programs. This is supporting higher installation rates of airbags and more advanced seatbelts, impacting CPV positively . Commercial
customer recoveries compensating for increased labor costs and tariffs also added to CPV in 2025, partly offset by negative effects
from continued productivity related pricing pressure from vehicle manufacturers. CPV increased in India, South America, South Korea,
Europe and North America, was unchanged in Japan and China and decreased in Other Asia. The changes in regional and model mix
diluted global CPV by 2 to 3pp leading to a global CPV that was unchanged compared to 2024. This contributed to an organic growth
(Non-GAAP measure) of around 3.4% compared to global LVP growth of around 3.9%. The average global safety CPV (airbags,
pedestrian safety, seatbelts, and steering wheels) amounted to around $268 in 2025.
The Company believes that the more stringent crash rating requirements and consumer demand for more safety should enable the
global automotive safety market to grow around 1-2 percentage points per year faster than the global LVP in the medium and long term.
This excludes the impact from cost inflation related price increases.

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The past several years’ high order intake share has supported a strong sales development over time. In the past 5 years, the
Company's organic sales development outpaced global LVP on average by around 4.3 percentage points. During 2025, growth was
positively affected through recent launches of several new models, including Honda Passport, Ford Expedition, Hyundai Palisade, Onvo
L90, Mercedes CLA, Citroen C3 Aircross and Opel Frontera.
The Company estimates that the sales for Electric Vehicles (not including PHEVs) amounted to around $1.7 billion in 2025.
GLOBAL FOOTPRINT WELL ADAPTED TO THE GEOGRAPHIC TREND SHIFT IN AUTOMOTIVE PRODUCTION
The Company's regional sales mix continues to be balanced with 29% of sales in Europe, 32% in the Americas and 20% in Asia,
excluding China in 2025, compared to 28%, 33% and 19%, respectively, in 2024. The Company's sales in the important Chinese
market was 19% of total sales in 2025 compared to 19% in 2024.
The balanced regional sales mix has been achieved through timely investments and strengthening of technical and support capabilities
in growth markets.
ORDER INTAKE IMPACTED BY SHIFTS IN TECHNOLOGY, CUSTOMER LANDSCAPE AND GEOPOLITICS
The Company's order intake in 2025, with high win rates for new platforms with both new and traditional OEMs as well as for both EV
and ICE platforms, supports the Company's already strong base, which includes supplying products to more than 1,400 vehicle models
and around 100 car brands. The order intake in 2025 supports the Company's ability to defend its around 44% sales market share in
the near and medium term. For several years, the automotive industry has faced key trends that impact the industry, notably changes in
technologies as well as geographic growth differences, with the emergence of new automakers being particularly visible in China.
Autoliv has therefore increasingly focused resources on developing new products and strengthening its position with new automakers to
capture the growth opportunities that come with these changes. This includes long-term development agreements with several new
automakers in China in recent years, as well as increased investments in capacity and capabilities in India. The order intake from new
automakers, mainly in China, accounted for around 1/3 of our total order intake in 2025.We won multiple awards tied to industry trends
such as autonomous driving. These include solutions that protect occupants in reclined seating positions, addressing critical safety risks
in next‑generation interiors. We strengthened our Mobility Safety Solutions business by winning new orders for our advanced Pyro
Safety Switch, supporting the growing segment of 1,000 ‑volt electric vehicles. We continued to expand our safety offering in India with
advanced systems such as seat ‑cushion airbags and front ‑center airbags. We licensed our Human Body Model solution to our first
customer. In China, the Company estimates that around 50% of order intake in 2025 was with domestic Chinese OEMs, which supports
our expectation that domestic OEMs in China will continue to increase their share of the Company's sales in China in 2026. New order
intake is defined as the sales value of awards for future business received within that year. The lifetime value is calculated using
detailed assumptions of price and volumes over the years of production and the exchange rates prevailing at the time of receiving the
order.
The lead time from order intake to start of production is typically 1-3 years. During this period the products are engineered into the
vehicle to provide the expected protection for occupants in case of a crash and to meet legal and regulatory requirements, as well as
other requirements from the vehicle manufacturer. This investment in new products is the main factor of RD&E expenses, net.
Additionally, the Company has to build up production capacity, in the form of new lines, to meet future product launches.
In 2025, OEMs sourcing of new business was at a low level for the industry, as OEMs are reconsidering certain future product offerings
due to technological and geopolitical uncertainties, including uncertainties regarding costs for tariffs. The Company's order intake share
for 2025 continued on a high level. Even so, the low level of OEM sourcing activity in 2025 resulted in an order intake in 2025 that was
on the same low level as in 2024. The estimated life-time sales for all orders booked in 2025 is around $7.7 billion, compared to around
$7.4 billion in 2024. As sourcing of several large platforms were pushed into 2026, we expect a rebound of OEM sourcing activity and
Autoliv order intake in 2026.
STRATEGIC AND STRUCTURAL INITIATIVES
The 2025 light vehicle market was impacted by a technological and geopolitical uncertainties, with continued elevated customer call-off
volatility and inflationary pressure on costs for labor. In response, Autoliv management continued to implement strict cost control
measures, as well as execute significant structural cost reduction measures. In June 2023, the Company communicated a cost
reduction framework that included the intent to reduce its indirect headcount by up to 2,000, and to improve direct labor productivity
equivalent to a reduction of up to a 6,000 direct workforce positions. Based on the intended indirect workforce reductions, the Company
estimates that total annual cost reductions will amount to around $130 million when fully implemented, with approximately $50 million in
savings recorded in 2024, increasing to around $100 million in 2025 and the remaining amount expected in 2026 and 2027. At the end
of 2025, around 1,600 of the planned indirect reductions had been completed.
Direct labor efficiency has developed well in both 2024 and 2025, supported by the direct labor workforce reduction program, improved
call-off accuracy and a focused automation effort. It is the Company's estimate that the program's target of 6,000 direct labor workforce
reduction was achieved by the end of 2025.
The provision, net of reversals, for restructuring activities in 2025 amounted to $8 million compared to $18 million in 2024. As of
December 31, 2025, the Company had $82 million reserved in its balance sheet related to restructuring compared to $151 million last
year. For more information, see Note 13, Restructuring, to the Consolidated Financial Statements included herein.
In addition to the structural improvements outlined above, the Company continues to implement the strategic initiatives to improve the
efficiency of its value chain from end to end, not least through the Autoliv Production System and increased digitalization and
automation. The Company has a high pace in the planning and implementation of the strategic initiatives. These initiatives are key
drivers to the Company's targets and building the foundation to continue to create shareholder value.

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IMPROVED EFFICIENCIES THROUGH OPERATIONAL EXCELLENCE
Pricing pressure is an inherent part of the automotive supplier business. Price reductions are generally higher on newer products with
strong volume growth compared to older products, where both the possibilities to re-design the product to reduce costs and market
growth are less. Price reductions can also depend on the business cycle and raw material price development. For the five-year period
2017-2021, the Company estimates the average reduction of product prices on existing programs to have been in the range of around
2-4% annually. In 2022, the pricing environment changed to some extent due to high raw material price and cost increases, which led to
renegotiations with customers regarding commercial terms. These discussions resulted in a net positive price development, gradually
implemented throughout the year. This was also the case in 2023, and for 2024 as well, albeit at a lower level as inflation moderated. In
2025, inflation moderated further, as did customer compensations for excess inflation. Customer recoveries for increased tariff costs
impacted net sales positively in 2025.
A key strategy for Autoliv to be and to remain cost competitive is to reduce labor costs, through continuously implementing productivity
improvement programs, optimizing the Company's production footprint, and instituting restructuring and capacity alignment activities as
well as other actions to address the Company's cost structure.
The Company's productivity improvement target, measured as labor minutes per unit, is to achieve at least 8% savings per year. This is
an increase from previous target of 5% savings per year. The increase reflects mainly increased opportunities related to advances in
digitalization and automation, including machine learning and AI. To meet this target, Autoliv has developed a set of strategies to
reduce costs in manufacturing:
• Autoliv production system (APS) is based on lean manufacturing methodology which aims to continuously increase output
with less resources. APS provides the target conditions and tools to achieve the delivery of goods and services at the right
time, in the right amount, at the required quality and at the lowest cost possible to all the Company's customers.
• Autoliv One Product One Process (1P1P) strategy focuses on product and process standardization and reducing cost and
complexity. The 1P1P strategy, combined with initiatives to reduce costs for components from external suppliers, ensures
that the Company continuously optimizes its supply base footprint, consolidates purchase volumes to fewer suppliers,
improves productivity in the Company's supply chain, standardizes components and redesign its products.
• Strategic Initiatives, including Automation, Digitalization, Machine Learning and AI, Supply Chain Management
Effectiveness and RD&E Effectiveness.
The Company's historical experience is that its continuous improvement strategies have enabled productivity improvements at or above
its historic target of 5%. However, the Company has not achieved its 5% productivity target since the COVID-19 pandemic in 2020, due
to the decline in LVP in 2020 and the high volatility in customer call-offs in 2021, 2022 and 2023, driven by the industry wide supply
chain instability, especially for semiconductors. In 2024, however, the Company achieved its 5% productivity target, as gradual
improvement in customer call-off volatility enabled improved operational efficiency. In 2025, the Company achieved its new target of 8%
labor minutes per unit productivity.
The Company foresees opportunities for further productivity on organic sales growth and increased call-off stability when global supply
chains continue to stabilize further to pre-pandemic levels, but also from increasing use of automation in its assembly for lean
manufacturing processes. Additionally, automated cells typically perform the manufacturing process with reduced variability. This
results in greater control and consistency of product quality.
FOCUS ON QUALITY
The number of vehicle recalls in the automotive industry continues to be at a relatively high level. The Company expects overall recall
numbers to remain high for years to come and, although the Company strives for the highest quality in its processes, it cannot be ruled
out that the Company may also be adversely impacted by a future recall.
Quality has been and always will be the Company's number one priority, and the Company continues to sharpen its focus in this area.
The Company now holds a global market share in passive safety of around 44%, while the Company has been involved in around 3%
of recalls in the industry in the past ten years. This indicates that the Company is delivering on its quality strategy. For more information
see product warranty and recalls in Note 14, Product Related Liabilities, to the Consolidated Financial Statements in this Annual
Report.
CHANGES IN COMPETITIVE AND CUSTOMER LANDSCAPE
The Company has not noted any significant changes in the competitive landscape in 2025. We consider Joyson Safety Systems, a part
of Ningbo Joyson Electronic Corp., and ZF LIFETEC, a part of ZF Friedrichshafen AG, to be global competitors to Autoliv. In addition,
there are several smaller regional and product specific competitors, especially in China.
The customer landscape is gradually changing, with a multitude of new OEMs emerging in recent years. This is especially prominent
within electric vehicles and in China. In China, domestic OEMs have gained significant market shares and as a group now has larger
market share than global OEMs have in China. Autoliv's sales to domestic OEMs in China has grown rapidly. In 2022, this group
accounted for 22% of Autoliv's sales in China, and in 2025 their share of Autoliv sales in China was 44%. The fastest growing OEM in
China in recent years has been BYD, although its growth slowed significantly in 2025. BYD has a uniquely high degree of vertical
integration, with a large proportion of in-house sourcing of products and systems. This includes passive safety systems, which is
supplied by its subsidiary FinDreams Technology. Autoliv supplies components, especially inflators, to FinDreams Technology.

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CAPITAL STRUCTURE
The Company’snet debt stood at $1,566 million on December 31, 2025. This was an increase of $12 million compared to December
31, 2024. Total interest-bearing debt at December 31, 2025 amounted to $2,153 million, an increase of $244 million compared to
December 31, 2024.
Cash flow from operations was $1,157 million in 2025 and $1,059 million in 2024. Capital expenditures, net amounted to $423 million in
2025 and $563 million in 2024. During 2025 and 2024, the Company paid dividends of $238 million and $219 million, respectively.
It is the Company’spolicy to maintain a financial leverage commensurate with a “stronginvestment grade credit rating”.The long-term
target is to have a leverage ratio (see section Non-GAAP Performance Measures) not above  1.5x. At December 31, 2025, the leverage
ratio was 1.1x. The Company monitors its capital structure and the financial markets closely and intends to maintain a high level of
financial flexibility while being shareholder friendly.
As part of the adjustment of the capital structure, the Company has historically repurchased shares of its common stock. During 2025
and 2024, the Company repurchased and retired 3.1 million and 5.1 million shares, respectively. On June 4, 2025, the Company
announced that its Board of Directors approved a new stock repurchase program that authorizes the Company to repurchase up to $2.5
billion of common shares and operates from July 1, 2025 through December 31, 2029.
In 2024, the Company also retired 2 million shares previously held in Treasury stock. As of December 31, 2025, the Company
continues to hold around 2.6 million shares of common stock in treasury.
OUTLOOK FOR 2026
In addition to the assumptions noted below and our business and market update provided herein, the Company's guidance for 2026 is
mainly based on its customer call-offs and the achievement of its targeted cost compensation adjustments with its customers, including
no material changes to tariffs or trade restrictions, as compared to what is in effect as of January 23, 2026, as well as no significant
changes in the macro-economic environment, changes to customer call-off volatility or significant supply chain disruptions.
Full year 2026 Guidance
Organic sales growth Around 0%
Adjusted operating margin1) Around 10.5-11.0%
Operating cash flow2) Around $1.2 billion
Capital expenditures, net, % of sales Less than 5%
1) Excluding effects from capacity alignments, antitrust related matters and other discrete items. 2) Excluding unusual items.
Full year 2026 Assumptions
LVP growth Around 1% negative
Foreign currency impact on net sales Around 1% positive
Tax rate3) Around 28%
3) Excluding unusual tax items.
The forward-looking non-GAAP financial measures above are provided on a non-GAAP basis. Autoliv has not provided a GAAP
reconciliation of these measures because items that impact these measures, such as costs 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 Autoliv is unable to determine the probable significance of the unavailable information.
SIGNIFICANT LEGAL MATTERS
See Item 3. Legal Proceedings and Note 19, Contingent Liabilities, to the Consolidated Financial Statements in this Annual Report.

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RESULTS OF OPERATIONS
Consolidated net sales in 2025 increased by 4.1% compared to 2024. Excluding positive currency translation effects of 0.7%, the
organic sales increased (Non-GAAP measure, see reconciliation table below) by 3.4%  compared to the global LVP increase of 3.9%
(according to S&P Global, Jan 2026).
Sales by Product
Years ended December 31, Components of change in net sales
2025 2024
Reported
change
Currency
effects 1) Organic 3)
Airbags, Steering Wheels and
Other2) $ 7,302 $ 7,023 4.0 % 0.6 % 3.4 %
Seatbelt products and Other2) 3,513 3,367 4.3 % 0.8 % 3.5 %
Total $ 10,815 $ 10,390 4.1 % 0.7 % 3.4 %
1) Effects from currency translations.
2) Including Corporate and Other sales.
Airbags, Steering Wheels and Other
Sales for Airbags, Steering Wheels and Other grew organically (Non-GAAP measure, see reconciliation table above) by 3.4% in 2025.
The largest contributor to the increase was side airbags and inflatable curtains, followed by steering wheels, center airbags and driver
airbags.
Seatbelt Products and Other
Sales for Seatbelt Products and Other grew organically (Non-GAAP measure, see reconciliation table above) by 3.5% in 2025. Sales
growth was mainly driven by Americas and Asia excluding China followed by Europe and China.
Sales by Region
Years ended December 31, Components of change in net sales
2025 2024
Reported
change
Currency
effects 1) Organic 3)
Americas $ 3,480 $ 3,424 1.6 % (1.7)% 3.3 %
Europe 3,116 2,946 5.8 % 4.4 % 1.4 %
China 2,095 2,010 4.2 % 0.2 % 4.0 %
Asia excl. China 2,124 2,010 5.7 % (0.2)% 5.9 %
Total $ 10,815 $ 10,390 4.1 % 0.7 % 3.4 %
1) Effects from currency translations.
Autoliv’sglobal sales increased organically (Non-GAAP measure, see reconciliation table above) by 3.4% in 2025 compared to 2024,
which was around 0.5 percentage points below global LVP growth (according to S&P Global, January 2026). The 0.5pp
underperformance was positively impacted by product launches and tariff compensations. This was more than offset by negative effects
from the regional and model LVP mix development, which we estimate contributed to about 2.5pp underperformance. This was
particularly accentuated in China.
Our organic sales growth (Non-GAAP measure) outperformed LVP growth by 3.4pp in Americas, by 3.3pp in Asia excluding China and
by 2.4pp in Europe, while we underperformed by 6.1pp in China. LVP growth in China in 2025 was driven by domestic OEMs with
typically lower safety content. LVP for global OEMs declined by 1.3% while it increased by 16% for domestic OEMs. Autoliv's sales to
domestic OEMs increased by 23% in 2025 while it decreased by 7.3% to global OEMs in China. We expect continued strong sales
growth in China in 2026, driven by our performance with domestic OEMs.
2025 Organic Growth (Non-GAAP measure)
Americas Europe China Asia excl. China Global
Autoliv 3.3 % 1.4% 4.0 % 5.9% 3.4%
Main growth drivers Stellantis,
Toyota, Ford
Stellantis, BMW,
VW
Chery, Great
Wall, Nio
Suzuki, Toyota,
Hyundai
Stellantis, Suzuki,
Toyota
Main decline drivers EV GOEM,
GM, Hyundai
EV GOEM, JLR,
Hyundai
EV GOEM, VW,
Mercedes
Mitsubishi, Honda,
GM
EV GOEM, JLR,
Lixiang

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Condensed Statement of Income
Years ended December 31,
(Dollars in millions, except per share data) 2025 2024 Change
Net Sales $ 10,815 $ 10,390 4.1 %
Gross profit 2,074 1,927 7.6 %
% of sales 19.2 % 18.5 % 0.6 pp
S, G&A (571) (530) 7.6 %
% of sales (5.3)% (5.1)% (0.2)pp
R, D&E, net (413) (398) 3.8 %
% of sales (3.8)% (3.8)% 0.0 pp
Other income (expense), net (2) (19) (91)%
Operating income 1,088 979 11 %
% of sales 10.1 % 9.4 % 0.6 pp
Adjusted operating income1) 1,114 1,007 11 %
% of sales 10.3 % 9.7 % 0.6 pp
Financial and non-operating items, net (102) (105) (2.5)%
Income before taxes 986 875 13 %
Income taxes (250) (227) 10 %
Tax rate 25.4% 26.0% (0.6)pp
Net income 736 648 14 %
Earnings per share, diluted2) 9.55 8.04 19 %
Adjusted earnings per share, diluted1,2) 9.85 8.32 18 %
1) Non-GAAP Measure. 2) Net of treasury shares.
Gross Profit
In 2025, gross profit increased by $147 million and the gross margin increased by 0.6pp compared to 2024. The drivers behind the
gross profit improvement were mainly improved operational efficiency with lower costs for labor, logistics, premium freight and waste
and scrap. We also had positive effects from the organic sales growth and lower material costs partly offset by negative effects from
recall and warranty costs, un-recovered tariffs and higher depreciation.
Operating Income
Operating income increased in 2025 by $109 million, mainly due to the higher gross profit, as outlined above and the improvement in
Other income (expense), partly offset by higher costs for S,G&A and R,D&E, as outlined below.
Selling, General and Administrative (S,G&A) expenses increased in 2025 by $40 million, mainly due to $20 million in increased
personnel costs driven by wage inflation, $13 million in higher IT costs mainly due to higher license costs, $6 million in negative FX
translation effects. S,G&A costs in relation to sales increased from 5.1% to 5.3%, a level that is considered to be slightly above normal.
Research, Development & Engineering (R,D&E) expenses, net increased in 2025 by $15 million, mainly due to $18 million in lower
engineering income due to timing effects and $7 million in higher personnel costs due to wage inflation partly offset by $5 million from
positive FX translation effects. R,D&E, net, in relation to sales was unchanged at 3.8%. The Company consider a level of around 4% to
be representative for its business scope.
Other income (expense), net was an expense of $2 million in 2025 compared to an expense of $19 million in 2024. Almost all of the $17
million in lower expense was due to lower restructuring costs in 2025 compared to 2024.
Financial and Non-operating Items, net
Financial and non-operating items, net, improved by $3 million in 2025 compared to previous year, mainly due to $5 million in lower
interest expense partly offset by $3 million in lower interest income.
Income Taxes
The tax rate for 2025 was 25.4%, compared to 26.0% in 2024. Discrete tax items, net, had a favorable impact of 3.1pp in 2025
compared to 4.8pp favorable impact in 2024. The reported 25.4% tax rate as well as the underlying tax rate excluding discrete items
was within our expected normal tax rate range of 25-30%.
Net Income and Earnings Per Share
Net income in 2025 increased by $88 million compared to 2024. Earnings per share, diluted increased by $1.52 compared to a year
earlier, where the main drivers were $0.90 from higher operating income and $0.41 from lower number of outstanding shares, diluted,
$0.17 from tax and by $0.03 from lower financial and non-operating items, net. The weighted average number of shares outstanding
assuming dilution in 2025 was 76.9 million compared to 80.4 million in 2024.

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NON-GAAP PERFORMANCE MEASURES
In this annual report, the Company sometimes refers to Non-GAAP measures that the Company and securities analysts use in
measuring Autoliv’s performance.
The Company believes that these measures assist management and investors in analyzing trends in the Company’sbusiness for the
reasons given below. Investors should not consider these Non-GAAP measures as substitutes for, but rather as additions to, financial
reporting measures prepared in accordance with GAAP.
These Non-GAAP measures have been identified, as applicable, in each section of this annual report with tabular presentations
provided below, reconciling them to GAAP.
It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies.
Organic Sales
The Company analyzes its sales trends and performance as changes in “organic sales growth” or “organic sales decline”because the
Company currently generates approximately three quarters of net sales in currencies other than the reporting currency (i.e. U.S. dollars)
and currency rates have proven to be rather volatile. Organic sales present the increase or decrease in the overall U.S. dollar net sales
on a comparable basis, allowing separate discussions of the impact of acquisitions/divestitures and exchange rates.
See tabular reconciliations above, that present changes in “organic sales growth”as reconciled to the change in total GAAP net sales.
Net debt
The Company, 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’soverall 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-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 GAAP measure "Total debt" to Non-GAAP measure “Net debt”
DECEMBER 31 (Dollars in millions) 2025 2024
Short-term debt $ 419 $ 387
Long-term debt 1,734 1,522
Total debt 2,153 1,909
Cash and cash equivalents (604) (330)
Debt issuance cost/Debt-related derivatives, net 17 (24)
Net debt $ 1,566 $ 1,554
Adjusted operating income, adjusted operating margin and adjusted diluted Earnings per share (EPS)
Adjusted operating margin and adjusted diluted EPS are Non-GAAP measures the Company uses to evaluate its business, because
the Company believes it assists investors and analysts in comparing the Company's performance across reporting periods on a
consistent basis by excluding items that are non-operational or non-recurring in nature (such as costs related to capacity alignments,
costs related to antitrust matters and for diluted EPS unusual tax items) and that the Company does not believe are indicative of its core
operating performance and underlying business trends. Adjusted operating margin and adjusted diluted EPS, as shown in the table
below, should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance
with GAAP, including operating margin and diluted EPS.
Reconciliation of GAAP measure "Operating income" to Non-GAAP measure "Adjusted Operating income"
(Dollars in millions) 2025 2024
Operating income (GAAP) $ 1,088 $ 979
Non-GAAP adjustments:
Less: Capacity alignments 23 19
Less: Antitrust related items 3 8
Total non-GAAP adjustments to operating income 26 27
Adjusted Operating income (Non-GAAP) $ 1,114 $ 1,007

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39
Reconciliation of GAAP measure "Operating margin" to Non-GAAP measure "Adjusted Operating margin"
(Percentage) 2025 2024
Operating margin (GAAP) 10.1% 9.4%
Non-GAAP adjustments:
Less: Capacity alignments 0.2% 0.2%
Less: Antitrust related items 0.0% 0.1%
Total non-GAAP adjustments to operating margin 0.2% 0.3%
Adjusted Operating margin (Non-GAAP) 10.3% 9.7%
Reconciliation of GAAP measure "Earnings per share - diluted" to Non-GAAP measure "Adjusted Earnings per share -
diluted"
(Dollars) 2025 2024
Earnings per share - diluted (GAAP) $ 9.55 $ 8.04
Non-GAAP adjustments:
Less: Capacity alignments 0.29 0.24
Less: Antitrust related items 0.04 0.10
Less: Tax on non-GAAP adjustments (0.04) (0.06)
Total non-GAAP adjustments to Earnings per share - diluted 0.30 0.28
Adjusted Earnings per share - diluted (Non-GAAP) $ 9.85 $ 8.32
Weighted average number of shares outstanding - diluted (in millions) 76.9 80.4
Income before income taxes, Net income, Net income attributable to controlling interest, Capital employed
The following tables reconcile Income before income taxes, Net income, Net income attributable to controlling interest, Capital
employed, which are inputs utilized to calculate Return On Capital Employed (“ROCE”),adjusted ROCE, Return On Total Equity
(“ROE”)and adjusted ROE. The Company believes this presentation may be useful to investors and industry analysts who utilize these
adjusted Non-GAAP measures in their ROCE and ROE calculations to exclude certain items for comparison purposes across periods.
Autoliv’smanagement uses the ROCE, adjusted ROCE, ROE and adjusted 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.
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’scapital employed in its business relative to that of its
peers. The Company’smanagement believes that ROE and adjusted ROE are a useful indicators of how well management creates
value for its shareholders through its operating activities and its capital management.
Accordingly, the tables below reconcile from GAAP to the equivalent Non-GAAP measure.
Reconciliation of GAAP measure "Income before income taxes" to Non-GAAP measure "Adjusted Income before income
taxes"
(Dollars in millions) 2025 2024
Income before income taxes (GAAP) $ 986 $ 875
Non-GAAP adjustments:
Less: Capacity alignments 23 19
Less: Antitrust related items 3 8
Total non-GAAP adjustments to Income before income taxes 26 27
Adjusted Income before income taxes (Non-GAAP) $ 1,012 $ 902

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40
Reconciliation of GAAP measure "Net income" to Non-GAAP measure "Adjusted Net income"
(Dollars in millions) 2025 2024
Net income (GAAP) $ 736 $ 648
Non-GAAP adjustments:
Less: Capacity alignments 23 19
Less: Antitrust related items 3 8
Less: Tax on non-GAAP adjustments (3) (5)
Total non-GAAP adjustments to Net income 23 22
Adjusted Net income (Non-GAAP) $ 759 $ 670
Reconciliation of GAAP measure "Net income attributable to controlling interest" to Non-GAAP measure "Adjusted Net
income attributable to controlling interest"
(Dollars in millions) 2025 2024
Net income attributable to controlling interest (GAAP) $ 735 $ 646
Non-GAAP adjustments:
Less: Capacity alignments 23 19
Less: Antitrust related items 3 8
Less: Tax on non-GAAP adjustments (3) (5)
Total non-GAAP adjustments to Net income attributable to controlling interest 23 22
Adjusted Net income attributable to controlling interest (Non-GAAP) $ 758 $ 668
Reconciliation of GAAP measure "Return on Capital Employed" to Non-GAAP measure "Adjusted Return on Capital
Employed"
(Percentage) 2025 2024
Return on capital employed1) (GAAP) 26.4% 25.0%
Non-GAAP adjustments:
Less: Capacity alignments 0.5% 0.4%
Less: Antitrust related items 0.1% 0.2%
Total non-GAAP adjustments to Return on capital employed1) 0.6% 0.6%
Adjusted Return on capital employed1) (Non-GAAP) 27.0% 25.6%
Adjustment on Return on capital employed1) (in millions) $ 26 $ 27
1) 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.
Reconciliation of GAAP measure "Return on Total Equity" to Non-GAAP measure "Adjusted Return on Total Equity"
(Percentage) 2025 2024
Return on total equity1) (GAAP) 30.0% 27.2%
Non-GAAP adjustments:
Less: Capacity alignments 0.8% 0.7%
Less: Antitrust related items 0.1% 0.3%
Less: Tax on non-GAAP adjustments (0.1%) (0.2%)
Total non-GAAP adjustments to Return on total equity1) 0.9% 0.8%
Adjusted Return on total equity1) (Non-GAAP) 30.8% 28.0%
Adjustment on Return on capital employed1) (in millions) $ 23 $ 22
1) 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.

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LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL POSITION
Years ended December 31
(DOLLARS IN MILLIONS) 2025 2024
Net cash provided by operating activities $ 1,157 $ 1,059
Net cash used in investing activities (423) (563)
Net cash used in financing activities (369) (680)
Effect of exchange rate changes on cash and cash equivalents (90) 16
Decrease in cash and cash equivalents 274 (168)
Cash and cash equivalents at beginning of year 330 498
Cash and cash equivalents at end of year $ 604 $ 330
NET CASH PROVIDED BY OPERATING ACTIVITIES
Cash flow from operations, together with available financial resources and credit facilities, is expected to be sufficient to fund the
Company’santicipated working capital requirements, capital expenditures and future dividend payments.
Net cash provided by operating activities was $1,157 million in 2025 compared to $1,059 million in 2024. The increase of $98 million in
2025 was mainly due to $88 million in higher net income. The improvement was also supported by more positive effects compared to in
2024 from non-cash items such as $20 million from depreciation and amortization and $55 million from Other non-cash adjustments,
which mainly constitutes positive effects from deferred income taxes, pension liabilities and other long term liabilities. This was partly
offset by $65 million in less favorable effects from changes in operating working capital compared to 2024.
Receivables, net outstanding in relation to annualized fourth quarter sales was 20% at December 31, 2025, compared to 19% at
December 31, 2024. Factoring agreements did not have any material impact on receivables outstanding for 2025 or 2024.
Inventory, net outstanding in relation to annualized fourth quarter sales was 9% at December 31, 2025, compared to 9% at December
31, 2024.
Payables outstanding in relation to annualized fourth quarter sales was 18% at December 31, 2025 compared to 17% at December 31,
2024.
NET CASH USED IN INVESTING ACTIVITIES
In 2025 and 2024, net cash used in investing activities amounted to $423 million and $563 million, respectively. The Company's
investing activities primarily consist of investments in property, plant and equipment. Net cash generated by operating activities
continued to sufficiently cover capital expenditures for property, plant and equipment.
In relation to net sales, capital expenditures, net (expenditures for property, plant and equipment less proceeds from sale of property,
plant and equipment) was 3.9% compared to 5.4% in previous year. The lower level of capital expenditure, net is mainly related to the
finalizing of several footprint optimization projects in Europe and Americas and less capacity expansion projects, especially in Asia.
The 3.9% level is slightly below what the Company expects for the longer term, which is to on average be below 5% in relation to sales.
Depreciation and amortization totaled $407 million in 2025 compared to $387 million in 2024.
During the years 2025 and 2024, a majority of the Company's investments were for production capacity to support new product
launches, but also for automation projects for improved efficiency.
NET CASH USED IN FINANCING ACTIVITIES
Net cash used in financing activities amounted to $369 million and $680 million for the years 2025 and 2024, respectively. The
decrease of $311 million in cash used in financial activities was mainly the result of $201 million less in repurchased shares in 2025
compared to 2024 and a higher net increase in short-term debt by $137 million in 2025 compared to 2024.
The Company's issuance, net of long-term debt was $210 million in 2025 and $220 million in 2024.
In 2025, the Company paid cash dividends of $238 million. In 2024, the Company paid dividends of $219 million. The Company's
dividend approach has been the same for several years.
The Company repurchased shares to an amount of $351 million and $552 million in 2025 and 2024, respectively. The Company intends
to continue to repurchase shares in accordance with the current authorization until the end of 2029.
INCOME TAXES
The Company has reserves for taxes that may become payable in future periods as a result of tax audits. At any given time, the
Company is undergoing tax audits covering multiple years in several tax jurisdictions. Ultimate outcomes are uncertain but could, in
future periods, have a significant impact on the Company’scash flows. See discussions of income taxes under Significant Accounting
Policies in this section, Note 2, Summary of Significant Accounting Policies, and Note 5, Income Taxes, to the Consolidated Financial
Statements included herein.

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PENSION ARRANGEMENTS
The Company has defined benefit pension plans covering nearly half of the U.S. employees. As of December 31, 2021, the main U.S
defined benefit plan was frozen for further benefits. Many of the Company’s non-U.S. employees are also covered by pension
arrangements.
At December 31, 2025, the Company’snet pension liability (i.e. the actual funded status) for its U.S. and non-U.S. plans was $169
million compared to $153 million at December 31, 2024.
The plans had a total net unamortized actuarial loss before tax of $29 million recorded in Accumulated Other Comprehensive (Loss)
Income in the Consolidated Balance Sheets at December 31, 2025, compared to $36 million at December 31, 2024. The amortization
of the actuarial loss is expected to be $2 million in 2026.
Total pension expense associated with the defined benefit plans was $22 million in 2025 and $34 million in 2024, and is expected to be
$25 million in 2026.
The Company contributed $15 million to its defined benefit plans in 2025 and $29 million in 2024. The Company expects to contribute
$16 million to these plans in 2026 and is currently projecting a yearly funding at approximately the same level in the subsequent years.
For further information about retirement plans see Note 20, Retirement Plans, to the Consolidated Financial Statements included
herein.
EQUITY
During 2025, total equity increased by $297 million to $2,582 million as of December 31, 2025. The change was mainly due to net
income of $736 million and positive currency translation effects of $137 million, offset by share repurchases, including taxes of $355
million and dividends paid of $239 million,
TREASURY ACTIVITES
DEBT AND CREDIT ARRANGEMENTS
The Company's total debt on December 31, 2025 and 2024 was $2,153 million and $1,909 million, respectively. The Company had a
net debt position (see section Non-GAAP Performance Measures) on December 31, 2025 and 2024 of $1,566 million and $1,554
million, respectively.
In July 2024, the Company entered into a $125 million bilateral revolving credit facility (Bilateral RCF) with substantially the same terms
as the revolving credit facility (RCF) with the 11 banks (see below). In May 2022, the Company refinanced its existing RCF of $1,100
million. The facility was syndicated among 11 banks and matures May 2029. The Company pays a commitment fee on the undrawn
amount of 0.10%, representing 35% of the applicable margin, which is 0.275% (given the Company’sratings of "BBB+" from Fitch and
“Baa1” from Moody’s).Borrowings under the facility are unsecured. On December 31, 2025, the Company’sunutilized long-term credit
facilities were $1,225 million, represented by the RCF and the Bilateral RCF. These facilities are not subject to any financial covenants
nor is any other substantial financing of Autoliv.
In October 2025, the Company priced and issued a 5-year green bond for a total of €300 million in the Eurobond market. The bond
carries a coupon of 3.0% and matures in October 2030.
In February 2024, the Company priced and issued a 5.5-year green bond for a total of €500 million in the Eurobond market. The bond
carries a coupon of 3.625% and matures in August 2029.
In March 2023, the Company priced and issued a 5-year green bond for a total of €500 million in the Eurobond market. The bond
carries a coupon of 4.25% and matures in March 2028.
The Company has a €3,000 million Euro Medium Term Note Program in place for being able to issue notes to be traded on the Global
Exchange Market of Euronext Dublin. On December 31, 2025, €1,300 million had been issued under this program.
In 2014, the Company issued and sold long-term debt securities in a U.S. Private Placement pursuant to a Note Purchase and
Guaranty Agreement dated April 23, 2014, by and among Autoliv ASP Inc., the Company and the purchasers listed therein. On
December 31,2025, $470 million remains outstanding from the 2014 issuance, of which $185 is long-term.
On December 31, 2025 Autoliv’slong-term credit rating from Moody’swas Baa1, and from Fitch BBB+. All ratings with stable outlook.
As of February 7, 2025, S&P Global Ratings withdrew the ratings for Autoliv on the Company’srequest. The company aims to maintain
a strong investment grade credit rating.
For additional information about the Company's debt and credit arrangements, see Note 15, Debt and Credit Agreements, to the
Consolidated Financial Statements included herein.
FACTORING
During 2025 and 2024, the Company sold receivables and discounted notes related to selected customers. These factoring
arrangements increase cash while reducing accounts receivable and customer risks. On December 31, 2025, the Company had
received $258 million for sold receivables without recourse and discounted notes with a discount cost of $2 million during the year,
compared to $211 million on December 31, 2024 with a discount cost of $3 million recorded in Other non-operating items, net.

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NUMBER OF SHARES
At December 31, 2025, 74.7 million shares were outstanding (net of 2.6 million treasury shares), a 3.9% decrease from 77.7 million one
year earlier.
The number of shares outstanding is expected to increase by 0.6 million when all RSUs and PSUs vest, see Note 18, Stock Incentive
Plans, to the Consolidated Financial Statements included herein.
During 2025, the Company repurchased and retired approximately 3.1 million shares equal to $351 million. During 2024 the Company
repurchased and retired approximately 5.1 million shares equal to $552 million. In addition, the Company also retired 2,000,000
treasury shares in December 2024. On June 4, 2025, the Company announced that its Board of Directors approved a new stock
repurchase program that authorizes the Company to repurchase up to $2.5 billion of common shares and operates from July 1, 2025
through December 31, 2029.
Contractual Obligations and Commitments
Contractual obligations include debt, sponsored defined benefit plans, lease and purchase obligations that are enforceable and legally
binding on the Company.
For material contractual debt obligations as of December 31, 2025, see Note 15, Debt and Credit Agreements, to the Consolidated
Financial Statements included herein.
Operating lease obligations represent the payment obligations (undiscounted cash flows) under leases classified as operating leases.
Capital lease obligations are not material. See Note 3, Leases, to the Consolidated Financial Statements included herein.
There are no unconditional purchase obligations other than short-term obligations related to inventory, services, tooling, and property,
plant and equipment purchased in the ordinary course of business. Purchase agreements with suppliers entered into in the ordinary
course of business do not generally include fixed quantities. Quantities and delivery dates are established in “call off plans” accessible
electronically for all customers and suppliers involved. Communicated “call off plans”for production material from suppliers are normally
reflected in equivalent commitments from Autoliv customers.
The Company sponsors defined benefit plans that cover a significant portion of the Company's U.S. employees and certain non-U.S.
employees. The pension plans in the U.S. are funded in conformity with the minimum funding requirements of the Pension Protection
Act of 2006. Funding for the Company's pension plans in other countries is based upon plan provisions, actuarial recommendations
and/or statutory requirements. Due to volatility associated with future changes in interest rates and plan asset returns, the Company
cannot predict with reasonable reliability the timing and amounts of future funding requirements. The Company may elect to make
contributions in excess of the minimum funding requirements for the U.S. plans in response to investment performance and changes in
interest rates, or when the Company believes that it is financially advantageous to do so and based on other capital requirements. See
Note 20, Retirement Plans, to the Consolidated Financial Statements included herein.
COMMITMENTS
The Company has entered into a number of unrecognized unconditional purchase agreements relating to Solar Farms in US and China
during 2024, of which none is individually significant for disclosure. Together these agreements have an aggregated termination fee
(discounted) of approximately $51 million as of December 31, 2025. These Solar Farm agreements have a contract period ranging from
20-25 years. The future payments (undiscounted) relating to these unrecognized unconditional purchase agreements are in total $60
million to be paid over the following years: 1-3 years: $6 million; 4-5 years: $4 million and; more than 5 years: $50 million.
During 2025 the Company has entered into a global 5-year Enterprise Subscription Agreement. The subscription fees for the software
licenses will be paid annually in advance. The future payments (undiscounted) relating to this unrecognized software subscription
agreement are in total approximately $42 million to be paid over the following years: Less than 1 year: $12 million; 2-3 years: $25
million; 4-5 years: $5 million.
Additionally, the Company has entered into a number of software license agreements, mainly during 2025, of which none is individually
significant for disclosure. The future payments (undiscounted) for these unrecognized software license agreements are in total $26
million to be paid as follows: Less than 1 year: $8 million; 2-3 years: $12 million and 4-5 years: $6 million.
Risks and Risk Management
The Company is exposed to several categories of risks. They can broadly be categorized as operational risks, strategic risks and
financial risks. Some of the major risks in each category are described below. There are also other risks that could have a material
effect on the Company’sresults and financial position, and the description below is not complete but should be read in conjunction with
the discussion of risks described in Item 1A above, which contains a description of the Company's material risks.
As described below, the Company has taken several mitigating actions, applied numerous strategies, adopted policies, and introduced
control and reporting systems to reduce and mitigate these risks. In addition, the Company from time to time identifies and evaluates
emerging or changing risks to the Company in order to ensure that identified risks and related risk management are updated in this fast-
moving environment.

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Operational Risks
LIGHT VEHICLE PRODUCTION
Around 35% of Autoliv’scosts are fixed; therefore, short-term earnings are dependent on sales volumes and highly dependent on
capacity utilization in the Company’s plants.
Global LVP is an indicator of the Company’ssales development. Ultimately, however, sales are determined by the production levels for
the individual vehicle models for which Autoliv is a supplier (see Dependence on Customers). The Company’ssales are split over
several hundred contracts covering more than 1,300 vehicle models. This moderates the effect of changes in vehicle demand of
individual countries and regions as well as production issues. The risk of fluctuating sales has also been mitigated by Autoliv’s rapid
expansion in Asia and other growth markets, which has reduced the Company’sformer high dependence on sales in Europe to a
diversified mix with Europe, the Americas and Asia, each accounting for approximately 29%, 32% and 39%, respectively, of the
Company's 2025 total sales.
It is the Company’sstrategy to reduce the risks associated with fluctuating LVP by using temporary personnel in direct production,
when appropriate. During 2025 and 2024, the level of temporary personnel in relation to total personnel in direct production increased
to 12% from 11%. To reduce the potential impact of unusual fluctuations in the production of vehicle models supplied by the Company
such as during the financial crisis in 2008-2009 and the COVID-19 pandemic in 2020-2021 – it is also necessary for the Company to be
prepared to quickly adapt the level of permanent employees as well as fixed cost production capacity.
PRICING PRESSURE
Pricing pressure from customers is an inherent part of the automotive components business. The historical extent of price reductions
varies from year to year and takes the form of one time give backs, reductions in direct sales prices and/or discounted reimbursements
for engineering work.
In response, Autoliv is continuously engaged in efforts to reduce costs and to provide customers added value by developing new
products. Generally, the speed by which these cost-reduction programs generate results will, to a large extent, determine the future
profitability of the Company. The various cost-reduction programs are, to a considerable extent, interrelated. This interrelationship
makes it difficult to isolate the impact of costs on any single program; therefore, the Company monitors key measures such as costs in
relation to sales and productivity.
In 2025, due to cost pressures from labor and other items the Company engaged in extensive negotiations with its customers regarding
compensations.
COMPONENT COSTS AND RAW MATERIAL PRICES
The cost of direct materials was approximately 54% of sales in 2025 (55% in 2024).
The main raw materials being used as input material for the Company's operations are steel, textiles, plastic and non-ferrous metals.
The Company still sees effects coming from import tariffs and trade barriers across borders. These barriers are impacting the raw
material market and creating pricing and availability uncertainties. There is also  volatility in the sea freight rates driven by geopolitical
events.
In 2025, raw material inflation was limited. Cost inflation remained significant and related primarily to labor. The Company took actions,
including pricing discussions with customers and suppliers, competitive sourcing and exploring alternative materials.
LEGAL
The Company is involved from time to time in regulatory, commercial, and contractual legal proceedings that may be significant, and
the Company’sbusiness may suffer as a result of adverse outcomes of current or future legal proceedings. These claims may include,
without limitation, commercial or contractual disputes, including disputes with the Company’ssuppliers and customers, intellectual
property matters, alleged violations of laws, rules or regulations, governmental investigations, personal injury claims, product liability
claims, environmental issues, tax and customs matters, and employment matters.
A substantial legal liability or adverse regulatory outcome and the substantial cost to defend the litigation or regulatory proceedings may
have an adverse effect on the Company’sbusiness, operating results, financial condition, cash flows and reputation.
No assurances can be given that such proceedings and claims will not have a material adverse impact on the Company’s profitability
and consolidated financial position, or that reserves or insurance will mitigate such impact. See Note 19, Contingent Liabilities, to the
Consolidated Financial Statements included herein and Item 3 – Legal Proceedings.

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PRODUCT WARRANTY AND RECALLS
If our products are alleged to fail to perform as expected or are defective, the Company may be exposed to various claims for damages
and compensation. Such claims may result in costs and other losses to the Company even where the relevant product is eventually
found to have functioned properly. If a product (actually or allegedly) fails to perform as expected or is defective, we may face warranty
and recall claims. If such actual or alleged failure or defect results, or is alleged to result, in bodily injury and/or property damage, we
may also face product liability and other claims. The Company may experience material warranty, recall, product or other liability claims
or losses in the future, and the Company may incur significant cost 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. Government safety regulators also have policies and practices with respect to recalls.
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. In
addition, with global platforms and procedures, vehicle manufacturers are increasingly evaluating our quality performance on a global
basis. Any one or more quality, warranty or other recall issue(s), including the ones affecting few units and/or having a small financial
impact, may cause a vehicle manufacturer to implement measures which may have a severe impact on the Company’s operations,
such as a temporary or prolonged suspension of new orders or the Company’sability to bid for new business.
In addition, over time, there is a risk that the number of vehicles affected by a failure or defect will increase significantly (as would the
Company’scosts), since our products often use global designs and are increasingly based on or utilize the same or similar parts,
components, or solutions.
Although quality has always been a central focus in the automotive industry, especially for safety products, our customers and
regulators have become increasingly attentive to quality with even less tolerance for any deviations, which has resulted in an increase
in the number of automotive recalls. This trend is likely to continue as automobile manufacturers introduce even stricter quality
requirements and regulating agencies and other authorities increase the level of scrutiny given to vehicle safety issues. A warranty
recall or a product liability claim brought against the Company in excess of the Company’sinsurance may have a material adverse
effect on its business and/or financial results. Vehicle manufacturers are also increasingly requiring their external 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 defective products
under new vehicle warranties when the product supplied did not perform as represented. Additionally, a customer may not allow us to
bid for expiring or new business until certain remedial steps have been taken. Accordingly, the future costs of warranty claims by the
Company’scustomers may be material.
The Company’s warranty reserves are based upon management’sbest estimates of amounts necessary to settle future and existing
claims. Management regularly evaluates the appropriateness of these reserves and adjusts them when we believe it is appropriate to
do so. However, the final amounts determined to be due could differ materially from the Company’srecorded estimates. We believe our
established reserves are adequate to cover potential warranty settlements typically seen in our business.
The Company’sstrategy is to follow a stringent procedure when developing new products and technologies and to apply a proactive
“zero-defect”quality policy (see section Quality Management). In addition, the Company maintains a program of insurance, which
includes 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. However, such insurance may
not be sufficient to cover every possible claim that can arise in the Company’sbusinesses, now or in the future, or may not always be
available should the Company, now or in the future, wish to extend, renew, increase or otherwise adjust such insurance. In recent
years, the cost of recall and product liability insurance as well as the Company’slevel of self-insurance and deductibles has increased.
Management’sdecision regarding what insurance to procure is also impacted by the cost for such insurance. As a result, the Company
may face material losses in excess of the insurance coverage procured. A substantial recall or liability in excess of coverage levels
could therefore have a material adverse effect on the Company.
ENVIRONMENTAL
Most of the Company’smanufacturing processes consist of the assembly of components. As a result, the environmental impact from
the Company’s plants is generally modest. While the Company’s businesses from time to time are subject to environmental
investigations, there are no material environmental-related cases pending against the Company. Therefore, Autoliv does not incur (or
expect to incur) any material costs or capital expenditures associated with maintaining facilities compliant with U.S. or non-U.S.
environmental requirements. To reduce environmental risk, the Company has implemented an environmental management system in
all plants globally and has adopted an environmental policy (see corporate website www.autoliv.com).
Autoliv is subject to a number of environmental and occupational health and safety laws and regulations. Such requirements are
complex and are generally becoming more stringent over time. There can be no assurance that these requirements will not change in
the future, or that the Company will at all times be in compliance with all such requirements and regulations, despite its intention to be.
The Company may also find itself subject, possibly due to changes in legislation or other regulation, to environmental liabilities based
on the activities of its predecessor entities or of businesses acquired. Such liability could be based on activities which are not related to
the Company’scurrent activities.

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TRADE AND TARIFFS
Autoliv is subject to various international trade regulations and regimes and changes in these regimes could lead to increased
compliance costs and costs of raw materials and other components. In addition, political conditions leading to trade conflicts and the
imposition of tariffs or other trade barriers between countries in which the Company does business could increase its costs of doing
business. The effects of the new tariffs imposed in 2025 did not have a material impact on our profitability in 2025, as we achieved
customer compensations for more than 80% of tariff costs. Including the dilutive effect of recovered tariffs, operating margin was
negatively impacted by around 20 basis points in 2025.
Strategic Risks
REGULATIONS
In addition to vehicle production, the Company’smarket is driven by the safety CPV, which is affected by new regulations and new
vehicle rating programs, in addition to consumer demand for new safety technologies.
The most important regulations are the seatbelt installation laws that exist in all vehicle-producing countries. Many countries also have
strict enforcement laws on the wearing of seatbelts. Another significant vehicle safety regulation is the U.S. federal law that, since 1997,
requires frontal airbags for both the driver and the front-seat passenger in all new vehicles sold in the U.S. In 2007, the U.S. adopted
new regulations for head impact and enhanced thorax protection in side impact crashes, which now have been fully phased-in.
The United States upgraded its vehicle rating program, US NCAP, in 2011 and again in 2024. In December 2024, NHTSA issued the
Final Notice for the U.S. NCAP, outlining mid‑ and long‑term updates across the VRU Safety Program, Crash Avoidance Program, and
Crashworthiness Program, including the adoption of advanced ATDs such as the THOR ‑05F. The U.S. Department of Transportation
also signaled regulatory modernization efforts, including potential use of negotiated rulemaking, and emphasized priorities such as
transparency, vehicle affordability, and improved female occupant protection.
Europe upgraded the Euro NCAP rating system during 2018, and is updating its rating protocol for cars in 2026, and then plans further
enhancements on a three-year rolling schedule. Euro NCAP established a rating program for heavy goods vehicles in 2024, which will
add assessment of occupant protection in a 2030-timeframe.
China introduced a vehicle rating program in 2006, and together with the C-IASI, a rating program established in 2017 by CAERI, they
drive the Chinese vehicle safety market and are beginning to influence developments in other regions. The next major upgrades to
China NCAP will be phased in from 2027 through 2030. Both Euro NCAP and China NCAP are considering the use of virtual crash
testing with virtual human body models as a new method to evaluate the robust safety performance of passenger vehicles, taking into
account a wider number of load cases and variations in occupant weight, sex and age.
Japan and South Korea are continuously upgrading their vehicle rating programs, JNCAP and KNCAP, respectively. Latin America
introduced a basic rating program in 2010 followed by ASEAN NCAP in Southeast Asia in 2011. Global NCAP advocates for vehicle
standards, and its programs are addressing less regulated markets in Latin America, Africa, India, and South east Asia to promote
government and industry action. Several newly industrialized countries, such as Malaysia and Thailand, are increasingly adopting the
UN Regulations regarding vehicle safety under the UN 1958 agreement, and Malaysia started the world's first motorcycle safety rating
program in 2021. India has required frontal airbags for the driver since July 2019, and passenger airbags since 2021 for all new
passenger vehicles. In addition, India started its Bharat NCAP in October 2023 and is working on an upgrade for the next four-year
cycle with implementation in October 2027.
Vehicles with automated driving systems are expected to provide additional opportunities through integration of protective safety
systems with advanced driver assistance system  technologies, as well as new opportunities and challenges related to its impact on
vehicle interior layouts, steer-by-wire steering systems, and seating configurations. These developments are expected to be subject to
legal requirements and addressed in safety rating assessments. 
There are also other plans for improved automotive safety through new or revised regulations, both in the countries mentioned above
and in others regions, which could affect the Company’s market.However, there can be no assurance that changes in regulations will
not adversely affect the demand for the Company’sproducts or, at least, result in a slower increase in the demand for them.

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DEPENDENCE ON CUSTOMERS
As a result of this highly consolidated market, the Company is dependent on a relatively small number of customers with strong
purchasing power. In 2025, the Company's five largest customers accounted for around 40% of global LVP and the ten largest
accounted for around 56% of global LVP. In 2025, the Company’sfive largest customers accounted for around 44% of  consolidated
sales and the ten largest customers accounted for around 70% of consolidated sales. The Company's largest customer contract
accounted for around 2% of consolidated sales in 2025.
Customer % of Autoliv sales % of Global LVP1)
Stellantis 9.8% 5.8%
Toyota 9.6% 12.3%
VW 9.0% 9.6%
Honda 8.3% 3.8%
Hyundai 7.0% 8.1%
Ford 6.8% 3.8%
Nissan 5.3% 3.4%
General Motors 5.2% 4.4%
Mercedes Benz 5.0% 2.4%
BMW 4.0% 2.7%
1) Source: S&P Global January 2026
Although business with every major customer is split into at least several contracts (usually one contract per vehicle platform) and
although the customer base has become more balanced and diversified as a result of the Company's significant expansion in China
and other rapidly-growing markets, the loss of all business from a major customer (whether by a cancellation of existing contracts or not
awarding Autoliv new business), the consolidation of one or more major customers or a bankruptcy of a major customer could have a
material adverse effect on the Company. In addition, a quality issue, shortcomings in the Company's service to a customer or
uncompetitive prices or products could result in the customer not awarding the Company new business, which will gradually have a
negative impact on the Company's sales when current contracts start to expire.
See also Note 21, Segment Information, to the Consolidated Financial Statements included herein.
CUSTOMER PAYMENT RISK
Another risk related to the Company's customers is the risk that one or more of its customers will be unable to pay their invoices that
become due. The Company seeks to limit this customer payment risk by invoicing its major customers through their local subsidiaries in
each country, even for global contracts. By invoicing this way, the Company attempts to avoid having the receivables with a
multinational customer group exposed to the risk that a bankruptcy or similar event in one country would put all receivables with such
customer group at risk. In each country, the Company also monitors invoices becoming overdue.
Even so, if a major customer is unable to fulfill its payment obligations, it is likely that the Company would be forced to record a
substantial loss on such receivables.
DEPENDENCE ON SUPPLIERS
The Company relies on internal and/or external suppliers in order to meet its delivery commitments to the customers. In some cases,
suppliers are dictated by the customers. The Company's supply chain organization continually reviews sourcing risks and actively works
on mitigating related supply chain risks.
The Company’sambition is to maintain an optimal number of suppliers in all significant component technologies.
NEW COMPETITION
Increased competition may result in price reductions, reduced margins and the Company's inability to gain or hold market share. OEMs
rigorously evaluate suppliers on the basis of product quality, price, reliability and delivery as well as engineering capabilities, technical
expertise, product innovation, financial viability, application of lean principles, operational flexibility, customer service, and overall
management. To maintain the Company's competitiveness and position as a market leader, it is important to focus on all these aspects
of supplier evaluation and selection.
Although the market for occupant restraint systems has undergone a significant consolidation during the past ten years, the passive
safety market remains very competitive. It cannot be excluded that additional competitors, both global and local, will seek to enter the
market or grow beyond their current Keiretsu group or traditional customer base. Particularly in China, South Korea, and Japan there
are numerous domestic competitors often supplying just one OEM group.

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PATENTS AND PROPRIETARY TECHNOLOGY
The Company’s strategy is to protect its innovations with patents, and to vigorously protect and defend its patents, trademarks, and
know-how against infringement and unauthorized use. At the end of 2025, the Company held more than 6,600 patents and patents
applications. These patents expire on various dates during the period from 2026 to 2045. The expiration of any single patent is not
expected to have a material adverse effect on the Company’sfinancial results.
Although the Company believes that its products and technology do not infringe upon the proprietary rights of others, there can be no
assurance that third parties will not assert infringement claims against the Company in the future. Also, there can be no assurance that
any patent now owned by the Company will afford protection against competitors that develop similar technology. As the Company
continues to expand its products and expand into new businesses, it will increase its exposure to intellectual property claims.
Financial Risks
The Company is exposed to financial risks through its operations. To reduce the financial risks and to take advantage of economies of
scale, the Company has a central treasury department supporting operations and management. The treasury department handles
external financial transactions and functions as the Company’sin-house bank for its subsidiaries.
The Board of Directors monitors compliance with the financial risk policy on an on-going basis. For information about specific financial
risks, see Item 7A – Quantitative and Qualitative Disclosures about Market Risk.
Significant Accounting Policies and Critical Accounting Estimates
NEW ACCOUNTING STANDARDS
The Company has considered all applicable recently issued accounting standards. The Company has summarized in Note 2, Summary
of Significant Accounting Policies, to the Consolidated Financial Statements each of the recently issued accounting standards and
stated the impact or whether management is continuing to assess the impact.
CRITICAL ACCOUNTING ESTIMATES
The Company’ssignificant accounting policies are disclosed in Note 2, Summary of Significant Accounting Policies, to the Consolidated
Financial Statements included herein. The application of accounting policies necessarily requires judgments and the use of estimates
by a Company’smanagement. Actual results could differ from these estimates. By their nature, these judgments are subject to an
inherent degree of uncertainty. These judgments are based on the Company's historical experience, terms of existing contracts, and
management’sevaluation of trends in the industry, information provided by the Company's customers and information available from
other outside sources, as appropriate. The Company considers an accounting estimate to be critical if:
• It requires management to make assumptions about matters that were uncertain at the time of the estimate, and
• Changes in the estimate or different estimates that could have been selected would have had a material impact on the
Company's financial condition or results of operations. The accounting estimates that require management’s most
significant judgments include the estimation of variable considerations, estimation of pension benefit obligations based on
actuarial assumptions, estimation of accruals for warranty and recalls, uncertain tax positions, valuation allowances and
legal proceedings.
The Company has summarized its critical accounting policies requiring judgment below. These might change over time based on the
current facts and circumstances.
REVENUE RECOGNITION
In accordance with ASC 606, Revenue from Contracts with Customers , revenue is measured based on consideration specified in a
contract with a customer, adjusted for any variable consideration (i.e., price concessions) and estimated at contract inception. The
Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. The
estimated amount of variable consideration that will be received or paid by the Company is based on historical experience and trends,
management's understanding of the status of negotiations with customers and including pricing strategies. Negotiations with customers
is an ongoing process and the recognition of variable considerations is impacted by the outcome and timing of these negations.
Estimating variable consideration to be received or paid related to price concessions requires significant judgments by management
that affect the amount of revenue recorded in the financial statements due to the unique facts and circumstances in each of the
customer agreements and the on-going commercial negotiations with the customers. For the year-end 2025 the Company recognized
an accrual amounting to $242 million net for variable considerations to be received or paid for variable considerations versus $185
million the year before.
In addition, from time to time, the Company may make payments to customers in connection with ongoing and future business. These
payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments
unless the payment concession can be clearly linked to the future business award. If the payments are capitalized, the amounts are
amortized to revenue as the related goods are transferred. In the year-end 2025 and 2024 respectively the capitalized amount has
been insignificant.

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CONTINGENT LIABILITIES
Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of
matters that arise in the ordinary course of its business activities with respect to commercial, product liability or other matters.
The Company diligently defends itself in such matters and, in addition, carries insurance coverage to the extent reasonably available
against insurable risks.
The Company records liabilities for claims, lawsuits and proceedings when they are probable and it is possible to reasonably estimate
the cost of such liabilities. Legal costs expected to be incurred in connection with a loss contingency are expensed as such costs are
incurred.
A loss contingency is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred
and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued management evaluates,
among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount
of loss. Changes in these factors could materially impact the Company's consolidated financial statements.
The Company continuously assesses the relevant facts and circumstances for on-going litigation matters in its determination of whether
it is probable that an asset has been impaired or a liability has been incurred. The Company also considers its historical experience of
similar matters using significant judgement to make its estimates. For the years ended December 31, 2025 and 2024 management's
estimation process has been consistent and there have not been any material changes to the contingent liabilities recorded during
2025.
For further information regarding the significant on-going claims and lawsuits the Company is involved in, see Note 19 Contingent
Liabilities, to the Consolidated Financial Statements.
RECALL PROVISIONS AND WARRANTY OBLIGATIONS
The Company records liabilities for product recalls when probable claims are identified and when it is possible to reasonably estimate
costs. Recall costs are costs incurred when the customer decides to formally recall a product due to a known or suspected safety
concern. Product recall costs are estimated based on the expected cost of replacing the product and the customers' cost of carrying out
the recall, which is affected by the number of vehicles subject to recall and the cost of labor and materials to remove and replace the
defective product. 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’sinsurance policies generally include coverage of the costs of a
recall, although costs related to replacement parts are generally not covered. Actual costs incurred could differ from the amounts
estimated, requiring adjustments to these reserves in future periods. It is possible that changes in our assumptions or future product
recall issues could materially affect our financial position, results of operations or cash flows.
Estimating warranty obligations requires the Company to forecast the resolution of existing claims and expected future claims on
products sold. The Company bases the estimate on historical trends of units sold and payment amounts, combined with our current
understanding of the status of existing claims and discussions with our customers. These estimates are re-evaluated on an ongoing
basis. Actual warranty obligations could differ from the amounts estimated requiring adjustments to existing reserves in future periods.
Due to the uncertainty and potential volatility of the factors contributing to developing these estimates, changes in our assumptions
could materially affect our results of operations.
The provision recorded for product liabilities for the years ended December 31, 2025 and 2024 were  $87 million and $65 million
respectively. The Company continuously assesses the relevant facts and circumstances for on-going product recall matters and
considers its historical experience of similar matters using significant judgement to make its estimates, which are generally supported
by external counsel expertise. For the years ended December 31, 2025 and 2024 respectively, management’sestimation process has
been consistent and the ultimate outcome for settled product recall matters during the years ended December 31, 2025 have been in
line with estimates and for December 31, 2024 were favorable compared to Management’sestimate. The reversal of the reserve in
2024 was related to certain recall issues that were settled with a favorable outcome.
For further information, see Note 14 Product Related Liabilities and  Note 19 Contingent Liabilities, to the Consolidated Financial
Statements.
DEFINED BENEFIT PENSION PLANS
The Company has defined benefit pension plans in thirteen countries. The most significant plans exist in the U.S. These U.S. plans
represent approximately 46% of the Company’stotal pension benefit obligation. See Note 20 Retirement Plans to the Consolidated
Financial Statements.
The Company, in consultation with its actuarial advisors, determines certain key assumptions to be used in calculating the projected
benefit obligation and annual pension expense. For the U.S. plans, the assumptions used for calculating the 2025 pension expense
were a discount rate of 5.60% and an expected long-term rate of return on plan assets of 5.61%.
The assumptions used in calculating the U.S. benefit obligations disclosed, as of December 31, 2025 were a discount rate of 5.22%.
The discount rate for the U.S. plans has been set based on the rates of return of high-quality fixed-income investments currently
available at the measurement date and are expected to be available during the period the benefits will be paid. The expected rate of
long-term return on plan assets are determined based on several factors and must consider long-term expectations and reflect the
financial environment in the respective local markets. At December 31, 2025, 27% of the U.S. plan assets were invested in equities,
which is close to the target of 32%.

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The table below illustrates the sensitivity of the U.S. net periodic benefit cost and projected U.S. benefit obligation to a 1pp change in
the discount rate and decrease in return on plan assets for the U.S. plans (in millions). The use of actuarial assumptions is an area of
management’s estimate.
Assumption
(in millions) Change
2025 net
periodic
benefit
cost increase
(decrease)
2025 projected
benefit
obligation
increase
(decrease)
Discount rate 1pp increase $ 1 $ (14)
Discount rate 1pp decrease (1) 16
Return on plan assets 1pp decrease 2 n/a
INCOME TAXES
Significant judgment is required in determining the worldwide provision for income taxes. In the ordinary course of a global business,
there are many transactions for which the ultimate tax outcome is uncertain. Many of these uncertainties arise because of intercompany
transactions. The measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws. Deferred
tax assets are reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is recognized if,
based on the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be
realized. Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration of all facts
and circumstances, including key factors such as projected future profitability including tax planning strategies, interpretation of
applicable tax laws and on-going or anticipated tax audits. Deferred net tax assets amounted to $446 million for the year 2025 including
a valuation allowance of $109 million. For 2024, the deferred net tax assets amounted to $394 million including a valuation allowance of
$126 million.
The Company evaluates its uncertain tax positions based on enacted tax laws and consideration of all facts and circumstances,
including key factors such as interpretation of applicable tax laws, on-going tax audits or anticipated tax controversies. The
unrecognized tax benefits amounted to $36 million and $35 million respectively for the year 2025 and 2024.
See also the discussion of reserves for uncertain tax positions, and the determination of valuation allowances on the Company's
deferred tax assets in Note 5, Income Taxes, to the Consolidated Financial Statements.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
The Company is exposed to several markets risks in the ordinary course of business including risks related to currencies, interest rates,
financing, capital structure, credit ratings and impairment. See also Note 2, Summary of Significant Accounting Policies, to the
Consolidated Financial Statements included with this Annual Report for information about how these risks are quantified.
CURRENCY RISKS
1. Transaction Exposure and Revaluation effects
Transaction exposure arises because the cost of a product originates in one currency and the product is sold in another currency.
Revaluation effects come from valuation of assets and liabilities denominated in other currencies than the reporting currency of each
unit.
The Company's net transaction exposure in 2025 was approximately $2.9 billion. The four largest net exposures are U.S. dollars (sell)
against the Mexican Peso, Romanian Lei (buy) against the Euro, U.S. dollars (buy) against Korean Won and Thai Baht (buy) against
Japanese Yen. Together these currencies accounted for approximately 43% of the Company’snet currency transaction exposure.
Since the Company can only effectively hedge these currency flows in the short term, periodic hedging would only reduce the impact of
fluctuations temporarily. Over time, periodic hedging would postpone but not reduce the impact of fluctuations. In addition, the net
exposure is limited to only around one quarter of net sales and is made up of around 45 different currency pairs with exposures of more
than $1 million each. The Company generally does not hedge these flows.
2. Translation Exposure in the Income Statement and Balance Sheet
Another effect of exchange rate fluctuations arises when the income statements of non-U.S. subsidiaries are translated into U.S.
dollars. Outside the U.S., the Company’smost significant currency is the Euro. The Company estimates that 27% of its consolidated net
sales will be denominated in Euro or other European currencies during 2026, while 16% of its consolidated net sales are estimated to
be denominated in U.S. dollars.
The Company estimates that a 1% increase in the value of the U.S. dollar versus European currencies will decrease reported U.S.
dollar annual net sales in 2026 by $30 million, while operating income for 2026 will decline by $3 million, assuming reported corporate
average margin.
The Company’spolicy is not to hedge this type of translation exposure.
A translation exposure also arises when the balance sheets of non-U.S. subsidiaries are translated into U.S. dollars. The policy of the
Company is to finance major subsidiaries in the country’slocal currency and to minimize the amounts held by subsidiaries in foreign
currency accounts.
Consequently, changes in currency rates relating to funding and foreign currency accounts normally have a small impact on the
Company’sincome. In 2025 and 2024, the impact from the Company’scurrency exposure were not material.
INTEREST RATE RISK
Interest rate risk refers to the risk that interest rate changes will affect the Company’sborrowing costs. The Company's interest rate risk
policy states that the average interest rate fixing period should be minimum 1 year and maximum 5 years.
On December 31, 2025, the average interest rate fixing period for the Company’soutstanding debt was 2.9 years, and on December
31, 2024, the average interest rate fixing period for the Company’soutstanding debt was 2.8 years.
Given the Company’scurrent capital structure, we estimate that a one-percentage point interest rate increase would increase net
interest income by approximately $4.7 million on an annual basis. This is based on the capital structure at the end of 2025 when the
gross fixed-rate debt was $1,734 million while the Company had a net debt position of $1,566 million (see section Non-GAAP
Performance Measures). Thus, a change in the interest rate environment would not have a notable impact on the Company’s interest
expense. On December 31, 2025, the Company had $604 million in cash and cash equivalents of which the majority was subject to a
floating interest rate.
Fixed interest rate debt may be achieved both by issuing fixed rate notes and through interest rate swaps. The most notable debt
carrying fixed interest rates are the €500 million bond issued in 2023, the €500 million bond issued in 2024, the €300 million bond
issued in 2025 and the U.S. private placement notes totaling $470 million. See Note 15, Debt and Credit Agreements, to the
Consolidated Financial Statements.

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FINANCING RISK
Financing risk refers to the risk that it will be difficult and/or expensive to finance new or existing debt to meet the financing needs of the
Autoliv Group.
The management of the financing risk ensures access to funding in a cost-efficient way by diversification of funding sources and debt
maturities.
Autoliv has diversified its long-term funding sources by issuing notes in the USPP and Eurobond markets, and by signing long-term
credit agreements with 12 banks.
The Company has a Euro Medium Term Note Program in place for being able to issue notes to be listed at Euronext Dublin. The
Company has established programs for short-term issuance of commercial papers in the Swedish and US markets and short-term
credit agreements, e.g. bank overdrafts and money market loans.
To ensure diversification of debt maturities no more than 20% of the Autoliv Group’stotal debt may mature the next 12 months, unless
such maturities (in excess of 20%) are covered by unutilized committed credit facilities with maturity in excess of 12 months. On
December 31, 2025, 19% corresponding to $419 million of the Autoliv Group’stotal debt had maturity less than 12 months. This amount
was fully covered by unutilized committed credit facilities with maturity in excess of 12 months.
CAPITAL STRUCTURE AND CREDIT RATING
The overall objective relating to Autoliv’starget capital structure and credit rating is to provide the Company with sufficient flexibility to
manage the inherent risks and cyclicality in Autoliv’sbusiness and allow the Company to realize strategic opportunities and fund growth
initiatives while creating shareholder value.
Autoliv is committed to maintain a “strong investment grade credit rating." As of December 31, 2025, the Company had a long-term
credit rating from Moody’sof Baa1 and from Fitch of BBB+. As of February 7, 2025, S&P Global Ratings withdrew the ratings for Autoliv
on the company’s request.
The amount of interest-bearing debt impacts future financial flexibility as well as the credit rating. Management uses the non-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. It is Autoliv’starget to operate with a leverage ratio (sum of net debt plus pension liabilities divided by EBITDA) of 1.5x or
below. On December 31, 2025, the leverage ratio (Non-GAAP measure, see calculation table below) was 1.1x. For details and
calculation of leverage ratio, refer to the table below.
CALCULATION OF NON-GAAP MEASURE LEVERAGE RATIO
December 31,
2025 2024
Net debt1) $ 1,566 $ 1,554
Pension liabilities 169 153
Debt per the Policy 1,736 1,708
Net income2) 736 648
Income taxes2) 250 227
Interest expense, net2,3) 93 95
Other non-operating items, net2) 15 16
Income from equity method investments2) (6) (7)
Depreciation and amortization of intangibles2) 407 387
Capacity alignments costs2) 23 19
Antitrust related matters2) 3 8
Other items2) — —
EBITDA per the Policy (Adjusted EBITDA) $ 1,521 $ 1,394
Leverage ratio 1.1 1.2
1) Net debt is short- and long-term debt and debt-related derivatives less cash and cash equivalents (non-GAAP measure).
2) Latest 12 months.
3) Interest expense, net is interest expense including cost for extinguishment of debt, if any, less interest income.

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53
CREDIT RISK IN FINANCIAL MARKETS
Credit risk refers to the risk of a financial counterparty being unable to fulfill an agreed-upon obligation.
In the Company’sfinancial operations, credit risk arises when cash is deposited with banks and when entering into forward exchange
agreements, swap contracts or other financial instruments.
The policy of the Company is to work with banks that have a high credit rating and that participate in Autoliv’s financing.
To further reduce credit risk, deposits and financial instruments can only be entered into with core banks up to a calculated risk amount
of $250 million per bank for banks rated A- or above and up to $50 million for banks rated BBB+. In addition, deposits can be made in
U.S. and Swedish government short-term notes and certain AAA rated money market funds, as approved by the Company’sBoard of
Directors. On December 31, 2025, the Company held $267 million in AAA rated money market funds.
IMPAIRMENT RISK
Impairment risk refers to the risk that the Company will write down a material amount of its goodwill of close to $1.4 billion as of
December 31, 2025. This risk is assessed at least annually in the fourth quarter each year when the Company performs its impairment
testing.
It has been concluded that presently the Company's goodwill is not “at risk”.However, there can be no assurance that goodwill will not
be impaired due to future significant declines in LVP, due to the Company's technologies or products becoming obsolete or for any
other reason. The Company could also acquire companies where goodwill could turn out to be less resilient to deteriorations in external
conditions.
See also discussion under Goodwill and Intangible Assets in Note 2, Summary of Significant Accounting Policies, and Note 10,
Goodwill and Intangible Assets, to the Consolidated Financial Statements included herein.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets of Autoliv as of December 31, 2025 and 2024 and the Consolidated Statements of Income,
Comprehensive Income, Cash Flows and Total Equity for each of the three years in the period ended December 31, 2025, the Notes to
the Consolidated Financial Statements, and the Reports of the Independent Registered Public Accounting Firm are included below.
All of the schedules specified under Regulation S-X to be provided by Autoliv have been omitted either because they are not applicable,
are not required or the information required is included in the financial statements or notes thereto.

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54
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Autoliv, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Autoliv, Inc. (the Company) as of December 31, 2025 and 2024,
the related consolidated statements of income, comprehensive income, total equity and cash flows for each of the three years in the
period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December
31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31,
2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our
report dated February 19, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the
Company’sfinancial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to
the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical
audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Revenue recognition
Description of the
Matter
As discussed in Note 2 and 12 to the consolidated financial statements, the Company measures revenue based
on consideration specified in a contract with a customer, adjusted for any variable consideration, including price
concessions. Revenue is recognized based on the agreed-upon price at the time of shipment, and sales
incentives, allowances and certain customer payments are recognized as a reduction to revenue at the time of
the commitment to provide such incentives or make such payments.
Auditing revenue recorded for customer contracts containing variable consideration, that are subject to on-going
commercial negotiations for price concessions, was complex and judgmental due to the difficulty in evaluating
the sufficiency of evidence available to assess the existence of and likely outcome of on-going commercial
negotiations.
How We
Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls
over management’s review of customer contracts containing variable consideration. This included testing
controls over management’sprocess to identify and evaluate the accounting of customer contracts that contain
sales incentives, allowances, and customer payments that impact revenue recognition.
Our audit procedures to assess the Company’s identification of and accounting for customer contracts
containing variable consideration that are subject to on-going commercial negotiations for price concessions,
included, among others, interviewing and obtaining written representations from executives within the Company,
responsible for such negotiations with customers, regarding the accuracy and completeness of the Company’s
accounting for price concessions  and testing a sample of payments and credit memos issued to customers for
agreed price concessions. Our procedures also included inspecting a sample of customer contracts, and other
related supporting documentation, evaluating the terms therein and assessing the appropriateness of the
accounting treatment applied by management, considering the status of the on-going commercial negotiations.

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55
Product recall liabilities
Description of the
Matter
As discussed in Notes 2, 12, 14 and 19 to the consolidated financial statements, the Company is exposed to
product liability claims in the event its 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 records liabilities for
product recalls when probable claims are identified and when it is possible to reasonably estimate costs.
Provisions for product recalls are estimated based on the expected cost of replacing the product and the
customer’scost of carrying out the recall, which is affected by the number of vehicles subject to recall and the
cost of labor and materials to remove and replace the defective product.‌
Auditing product recall liabilities was complex due to the uncertainty inherent in identifying product recalls, as
well as the assumptions and estimates management uses to calculate the provisions for product recalls. These
significant assumptions and estimates include the nature, likelihood, timing, and anticipated cost of known and
potential claims.‌
How We
Addressed the
Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls
over the Company’sproduct recall liabilities process. This included testing controls over management’sprocess
to search for product recalls and determine the assumptions and estimates used to record product recall
liabilities.
To audit product recall liabilities, our procedures included, among others, obtaining and reviewing source
documentation, used by the Company to estimate the liability and assessing the reasonableness of assumptions
used, by performing independent calculations and sensitivity analyses to determine the existence of contrary
evidence. We evaluated the Company’s ability to estimate the product recall liabilities by performing
retrospective reviews of management’sestimates and comparing actual results to previous estimates made by
management. We also obtained letters from the Company’s internal and external legal counsel addressing
material claims against the Company, if any, and examined relevant third-party automotive safety regulatory
information to identify potential unrecorded product recall liabilities.‌
/s/ Ernst & Young AB
We have served as the Company's auditor since 1984.
Stockholm, Sweden
February 19, 2026

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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Autoliv, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Autoliv, Inc.’sinternal control over financial reporting as of December 31, 2025, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, Autoliv, Inc. (the Company) maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),
the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income,
comprehensive income, total equity and cash flows for each of the three years in the period ended December 31, 2025, and the related
notes and our report dated February 19, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’smanagement is responsible for maintaining effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting included in the accompanying Management’sReport on Internal Control
over Financial Reporting. Our responsibility is to express an opinion on the Company’sinternal control over financial reporting based on
our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’sinternal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’sassets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young AB
Stockholm, Sweden
February 19, 2026

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Consolidated Statements of Income
Years ended December 31,
(DOLLARS AND SHARES IN MILLIONS, EXCEPT PER SHARE DATA) 2025 2024 2023
Net sales Note 21 $ 10,815 $ 10,390 $ 10,475
Cost of sales1) (8,741) (8,463) (8,654)
Gross profit 2,074 1,927 1,822
Selling, general and administrative expenses (571) (530) (500)
Research, development and engineering expenses, net Note 2 (413) (398) (425)
Other income (expense), net2) Notes 13, 19 (2) (19) (207)
Operating income 1,088 979 690
Income from equity method investment Note 8 6 7 5
Interest income 10 13 13
Interest expense Note 15 (103) (108) (93)
Other non-operating items, net (15) (16) (3)
Income before income taxes 986 875 612
Income tax expense Note 5 (250) (227) (123)
Net income3) 736 648 489
Less: Net income attributable to non-controlling interest 1 1 1
Net income attributable to controlling interest $ 735 $ 646 $ 488
Earnings per share - basic $ 9.59 $ 8.06 $ 5.74
Earnings per share - diluted $ 9.55 $ 8.04 $ 5.72
Weighted average number of shares outstanding, net of
treasury shares (in millions) 76.6 80.2 85.0
Weighted average number of shares outstanding, assuming
dilution and net of treasury shares (in millions) 76.9 80.4 85.2
Cash dividend per share - declared $ 3.12 $ 2.74 $ 2.66
Cash dividend per share - paid $ 3.12 $ 2.74 $ 2.66
1) Including a gain on sale of property in China of $6 million and a supplier compensation of $13 million in 2025.
2) Including a cumulative translation gain of $11 million related to the sale of the Russian entity in 2025 and a cumulative translation loss of $12 million in
relation to the liquidation of the entities in Netherlands and Italy in 2025.
3) The aggregate transaction gain (loss) included in net income for the 2025, 2024 and 2023 was a loss of $27 million, a gain of $1 million and a loss of
$30 million, respectively.
See Notes to the Consolidated Financial Statements.

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Consolidated Statements of Comprehensive Income
Years ended December 31,
(DOLLARS IN MILLIONS) 2025 2024 2023
Net income $ 736 $ 648 $ 489
Other comprehensive income (loss)before tax:
Change in cumulative translation adjustments1) 137 (161) 20
Net change in unrealized components of defined benefit plans 7 (4) 7
Other comprehensive income (loss), before tax 144 (165) 27
Tax effect allocated to other comprehensive income (loss) (2) 1 (1)
Other comprehensive income (loss), net of tax 142 (164) 25
Comprehensive income 878 484 514
Less: Comprehensive income attributable to non-controlling interest 2 1 1
Comprehensive income attributable to controlling interest $ 876 $ 483 $ 513
1) See Note 16 for further details.
See Notes to the Consolidated Financial Statements.

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Consolidated Balance Sheets
At December 31,
(DOLLARS AND SHARES IN MILLIONS) 2025 2024
Assets
Cash and cash equivalents $ 604 $ 330
Receivables, net Note 6 2,236 1,993
Inventories, net Note 7 992 921
Income tax receivable 24 38
Prepaid expenses and accrued income 212 167
Other current assets Note 14 34 34
Total current assets 4,101 3,483
Property, plant and equipment, net Note 9 2,417 2,239
Operating lease right-of-use assets Note 3 171 158
Goodwill and intangible assets, net Note 10 1,386 1,375
Other non-current assets Note 8, 14, 19 568 548
Total non-current assets 4,542 4,320
Total assets 8,644 7,804
Liabilities and equity
Short-term debt Note 15 419 387
Accounts payable Note 11 2,007 1,799
Accrued liabilities Notes 12, 13, 14 1,050 1,056
Income tax payable 133 120
Operating lease liabilities, current Note 3 43 41
Other current liabilities 271 231
Total current liabilities 3,923 3,633
Long-term debt Note 15 1,734 1,522
Pension liability Note 20 169 153
Operating lease liabilities, non-current Note 3 122 118
Other non-current liabilities 113 92
Total non-current liabilities 2,138 1,885
Commitments and contingencies Note 19
Common stock1) 77 80
Additional paid-in capital 850 910
Retained earnings 2,308 2,105
Accumulated other comprehensive loss Note 16 (518) (659)
Treasury stock (2.6 and 2.7 million shares, respectively) (146) (160)
Total controlling interest’sequity 2,572 2,276
Non-controlling interest 10 10
Total equity 2,582 2,285
Total liabilities and equity $ 8,644 $ 7,804
1) Number of shares: 350 million authorized for both years, 77.3 and 80.4 million issued, and 74.7 and 77.7 million outstanding, net of treasury shares,
for 2025 and 2024, respectively.
See Notes to the Consolidated Financial Statements.

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Consolidated Statements of Cash Flows
Years ended December 31,
(DOLLARS IN MILLIONS) 2025 2024 2023
Operating activities
Net income $ 736 $ 648 $ 489
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization 407 387 378
Gain on divestiture of property (6) (4) —
Deferred income taxes (13) (30) (109)
Undistributed earnings from equity method investments, net of dividends 0 (1) (1)
Other, net 44 7 (10)
Net change in operating assets and liabilities:
Receivables, gross (98) 47 (221)
Other operating assets (26) 67 7
Inventories, gross (8) 28 (22)
Accounts payable1) 119 (83) 255
Accrued expenses (30) (12) 172
Income taxes 30 6 43
Net cash provided by operating activities 1,157 1,059 982
Investing activities
Expenditures for property, plant and equipment1) (441) (579) (573)
Proceeds from sale of property, plant and equipment 18 17 4
Net cash used in investing activities (423) (563) (569)
Financing activities
Net  increase (decrease) in other short-term debt 11 (126) 61
Proceeds from long-term debt 521 526 559
Repayment of long-term debt (311) (306) (533)
Dividends paid (238) (219) (225)
Stock repurchases (351) (552) (352)
Common stock options exercised 0 1 1
Dividends paid to non-controlling interest (1) (5) (1)
Net cash used in financing activities (369) (680) (490)
Effect of exchange rate changes on cash and cash equivalents (90) 16 (20)
Increase (decrease) in cash and cash equivalents 274 (168) (96)
Cash and cash equivalents at beginning of year 330 498 594
Cash and cash equivalents at end of year 604 $ 330 $ 498
1) See Note 17 for further details
See Notes to the Consolidated Financial Statements.

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Consolidated Statements of Total Equity
Accumulated
Additional other com- Total parent Non-
(DOLLARS AND SHARES Number of Common paid in Retained prehensive Treasury shareholders’ controlling Total
IN MILLIONS) shares stock capital earnings
(loss) income
1) stock equity interest equity
Balance at December 31, 2022 91 $ 91 $ 1,113 $ 2,310 $ (522) $ (379) $ 2,613 $ 13 $ 2,626
Comprehensive Income:
Net income 488 488 1 489
Foreign currency translation 20 20 (0) 20
Pension liability 6 6 6
Total Comprehensive Income 513 1 514
Retired and repurchased shares (4) (4) (70) (282) (356) (356)
Stock-based compensation 11 11 11
Cash dividends declared (225) (225) (225)
Dividends paid to non-controlling
interest on subsidiary shares (1) (1)
Balance at December 31, 2023 88 $ 88 $ 1,044 $ 2,289 $ (496) $ (368) $ 2,557 $ 13 $ 2,570
Comprehensive Income:
Net income 646 646 1 648
Foreign currency translation (161) (161) (0) (161)
Pension liability (3) (3) (3)
Total Comprehensive Income 483 1 484
Retired and repurchased shares (7) (7) (134) (612) 194 (558) (558)
Stock-based compensation 13 13 13
Cash dividends declared (219) (219) (219)
Dividends paid to non-controlling
interest on subsidiary shares (5) (5)
Balance at December 31, 2024 80 $ 80 $ 910 $ 2,105 $ (659) $ (160) $ 2,276 $ 10 $ 2,285
Comprehensive Income:
Net income 735 735 1 736
Foreign currency translation 137 137 0 137
Pension liability 5 5 5
Total Comprehensive Income 876 2 878
Retired and repurchased shares (3) (3) (60) (292) (355) (355)
Stock-based compensation 15 15 15
Cash dividends declared (238) (238) (238)
Dividends paid to non-controlling
interest on subsidiary shares (1) (1)
Other (1) (1) (1)
Balance at December 31, 2025 77 $ 77 $ 850 $ 2,308 $ (518) $ (146) $ 2,572 $ 10 $ 2,582
1) See Note 16 for further details – includes tax effects where applicable.
See Notes to the Consolidated Financial Statements.

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Notes to the Consolidated Financial Statements
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
1. Basis of Presentation
NATURE OF OPERATIONS
Through its operating subsidiaries, the Company is a leading developer, manufacturer and supplier of passive safety systems to the
automotive industry with a broad range of product offerings.
Passive safety systems are primarily meant to improve safety for occupants in a vehicle. Passive safety systems include modules and
components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels and inflator
technologies.
The Company also develops and manufactures mobility safety solutions such as pedestrian protection, battery cut-off switches,
connected safety services, and safety solutions for riders of powered two-wheelers.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements have been prepared in accordance with United States (U.S.) Generally Accepted Accounting
Principles (GAAP) and include Autoliv, Inc. and all companies over which Autoliv, Inc. directly or indirectly exercises control, which as a
general rule means that the Company owns more than 50% of the voting rights.
Consolidation is also required when the Company has both the power to direct the activities of a variable interest entity (VIE) and the
obligation to absorb losses or the right to receive benefits from the VIE that could be significant to the VIE.
All intercompany accounts and transactions within the Company have been eliminated from the consolidated financial statements.
Investments in affiliated companies in which the Company exercises significant influence over the operations and financial policies, but
does not control, are reported using the equity method of accounting. Generally, the Company owns between 20-50% of such
investments.
SEGMENT REPORTING
In accordance with ASC 280, Segment Reporting, the operating segments are determined based on the information provided to the
Chief Operating Decision Maker (CODM) on a regular basis and used for the purpose of assessing performance and allocating
resources within the Company. The CEO is deemed to be the CODM of Autoliv since he is the person who makes all major decisions
on how to allocate the resources and assess the performance of the Company for both strategic and operational initiatives.
ASC 280 indicates that a component is an operating segment if it meets the following criteria:
• It engages in business activities from which it may earn revenues and incur expenses.
• Its operating results are regularly reviewed by the CODM to make decisions about resources to be allocated to the
segment and assess its performance.
• Its discrete financial information is available.
The Company as a whole has met the definition of an operating segment as it engages in business activities from which it may earn
revenues and incur expenses, and its consolidated operating results are regularly reviewed by the CEO/CODM to allocate resources
and assess performance. Additionally, as Autoliv supplies customers on a global basis it also manages the business on a global basis.
Therefore, based on the above analysis, the Company has concluded that the Company is the single operating and reportable segment
under ASC 280, Segment Reporting. For more information on the Company's segment, see Note 21.
RECLASSIFICATIONS AND ROUNDINGS
Certain prior-year amounts have been reclassified to conform to current year presentation.
Certain amounts in the consolidated financial statements and associated notes may not reconcile due to rounding. All percentages
have been calculated using unrounded amounts.

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2. Summary of Significant Accounting Policies
USE OF ESTIMATES
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the
consolidated financial statements, and the reported amounts of net sales and expenses during the reporting period. The accounting
estimates that require management’smost significant judgments include the estimation of variable consideration for the Company's
contracts with customers, assessment of recoverability of goodwill and intangible assets, estimation of pension benefit obligations
based on actuarial assumptions, estimation of accruals for warranty and recalls, restructuring charges, uncertain tax positions, valuation
allowances and legal proceedings. Actual results could differ from those estimates.
REVENUE RECOGNITION
In accordance with ASC 606, Revenue from Contracts with Customers , revenue is measured based on consideration specified in a
contract with a customer, adjusted for any variable consideration (i.e., price concessions) and estimated at contract inception. The
estimated amount of variable consideration that will be received or paid by the Company is based on historical experience and trends,
management's understanding of the status of negotiations with customers and anticipated future pricing strategies. The Company
recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is
recorded to the agreed-upon price at the time of shipment, and sales incentives, allowances and certain payments to customers are
recognized as a reduction to revenue at the time of the commitment to provide such incentives or make these payments are made by
the Company.
In addition, from time to time, the Company may make payments to or receive additional consideration from customers in connection
with ongoing and future business. These payments to or cash receipts from customers are generally recognized to revenue at the time
of the commitment unless the payments to customers can be clearly linked to the future business. If the payments to customers are
capitalized, the amounts are amortized to revenue as the related goods are transferred to a customer. Capitalized payments from
customers are included in prepaid expenses and accrued income  in the Consolidated Balance Sheets.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction
and collected by the Company from a customer, are excluded from revenue.
The Company records compensation for Tariff expenses from customers as sales.
Shipping and handling costs associated with outbound freight before control of a product has transferred to a customer are accounted
for as a fulfillment cost and are included in cost of sales.
Nature of goods and services
The Company generates revenue from the sale of parts, which includes airbag, including steering wheels, and seatbelt products and
components, to original equipment manufacturers (“OEMs”).
The Company accounts for individual products separately if they are distinct (i.e., if a product is separately identifiable from other items
and if a customer can benefit from it on its own or with other resources that are readily available to the customer). The consideration for
each of the products, including any price concessions, is based on their stand-alone selling prices. The stand-alone selling prices are
determined based on the cost-plus margin approach.
The Company recognizes revenue for parts primarily at a point in time. For parts with revenue recognized at a point in time, the
Company generally recognizes revenue upon shipment to the customers and transfer of title and risk of loss under standard
commercial terms (typically Free On Board shipping point).
There are certain contracts where the criteria to recognize revenue over time have been met (e.g., there is no alternative use to the
Company and the Company has an enforceable right to payment). In such cases, at period end, the Company recognizes revenue and
a related asset and associated cost of goods sold and reduction in inventory. However, the financial impact of these contracts is
immaterial considering the very short production cycles and limited inventory days on hand. The contract asset balances with
customers, included in other current assets, amounted to $20 million as of December 31, 2025 and 2024.
The amount of revenue recognized is based on the purchase order price and adjusted for variable consideration (i.e., price
concessions). Customers typically pay for the parts based on customary business practices.

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RESEARCH, DEVELOPMENT AND ENGINEERING, NET (R,D & E)
Research and development and most engineering expenses are expensed as incurred. These expenses are reported net of expense
reimbursements from contracts to perform engineering design and product development fulfillment activities related to the production of
parts. For the years 2025, 2024 and 2023 total reimbursements from customers were $202 million, $213 million and $192 million,
respectively.
Certain engineering expenses related to long-term supply arrangements are capitalized when defined criteria in accordance with ASC
340-10, such as the existence of a contractual guarantee for reimbursement, are met.
Tooling is generally agreed upon as a separate contract or a separate component of an engineering contract, as a pre-production
project. Capitalization of tooling costs is made only when the specific criteria for capitalization of customer funded tooling in accordance
with ASC 340-10 is met. As of December 31, 2025 and 2024 the Company's capitalized costs for customer owned tooling reported as
prepaid expenses in the Consolidated Balance Sheets amounted to $94 million and $74 million, respectively. Tools owned by the
Company that fulfills the criteria for capitalization is reported as Property, Plant & Equipment (P,P&E). Depreciation on the Company’s
owned tooling is recognized in the Consolidated Statements of Income within Cost of sales.
STOCK-BASED COMPENSATION
The compensation costs for all of the Company’sstock-based compensation awards are determined based on the fair value method as
defined in ASC 718, Compensation –Stock Compensation . The Company records the compensation expense for awards under the
Stock Incentive Plan, including Restricted Stock Units (RSUs) and Performance Shares (PSUs) over the respective vesting period. For
further details, see Note 18.
INCOME TAXES
Current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current year. In
certain circumstances, payments or refunds may extend beyond twelve months, in such cases amounts would be classified as non-
current taxes payable or receivable. The Company accounts for Global Intangible Low-Taxed Income (GILIT) as a current period
expense when incurred. Therefore the Company has not recorded deferred taxes for basis differences expected to reverse in future
periods.  Deferred tax liabilities or assets are recognized for the estimated future tax effects attributable to temporary differences and
carryforwards that result from events that have been recognized in either the financial statements or the tax returns, but not both. The
measurement of current and deferred tax liabilities and assets is based on provisions of enacted tax laws. Deferred tax assets are
reduced by the amount of any tax benefits that are not expected to be realized. A valuation allowance is recognized if, based on the
weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized.
Evaluation of the realizability of deferred tax assets is subject to significant judgment requiring careful consideration of all facts and
circumstances. The Company classifies deferred tax assets and liabilities as non-current in the Consolidated Balance Sheet. Tax
assets and liabilities are not offset unless attributable to the same tax jurisdiction and netting is possible according to law and, as it
relates to payables and receivables, expected to take place in the same period.
Tax benefits associated with tax positions taken in the Company’sincome tax returns are initially recognized when it is more likely than
not that those tax positions will be sustained upon examination by the relevant taxing authorities. The Company’sevaluation of its tax
benefits is based on the probability of the tax position being upheld if challenged by the taxing authorities (including through negotiation,
appeals, settlement and litigation). Whenever a tax position does not meet the initial recognition criteria, the tax benefit is subsequently
recognized if there is a substantive change in the facts and circumstances that cause a change in judgment concerning the
sustainability of the tax position upon examination by the relevant taxing authorities. In cases where tax benefits meet the initial
recognition criterion, the Company continues, in subsequent periods, to assess its ability to sustain those positions. A previously
recognized tax benefit is derecognized when it is no longer more likely than not that the tax position would be sustained upon
examination. Liabilities for unrecognized tax benefits are classified as non-current unless the payment of the liability is expected to be
made within the next 12 months. For further details, see Note 5.
EARNINGS PER SHARE
The Company calculates basic earnings per share (EPS) by dividing net income attributable to controlling interest by the weighted-
average number of shares of common stock outstanding for the period (net of treasury shares). The Company’sunvested RSUs and
PSUs, of which some include the right to receive non-forfeitable dividend equivalents, are considered participating securities. The
diluted EPS reflects the potential dilution that could occur if common stock was issued for awards under the Stock Incentive Plan and is
calculated using the treasury stock method. The treasury stock method assumes that the Company uses the proceeds from the
exercise of stock option awards to repurchase ordinary shares at the average market price during the period. For unvested restricted
stock, assumed proceeds under the treasury stock method will include unamortized compensation cost and windfall tax benefits or
shortfalls. For further details, see Notes 18 and 22.
CASH EQUIVALENTS
The Company considers all highly liquid investment instruments purchased with a maturity of three months or less to be cash
equivalents.

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