Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of October ~~22, 2019,~~15, 2020, there were ~~87,234,327~~87,337,501 shares of common stock of Autoliv, Inc., par value $1.00 per share, outstanding.

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

In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” ~~��may,~~“may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words.

Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general economic conditions; the impacts of the coronavirus (COVID-19) pandemic on the Company’s financial condition, business operations, operating costs, liquidity and competition; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignment: restructuring and cost reduction and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; component shortages; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto (including the resolution of the Toyota Recall); higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; dependence on and relationships with customers and suppliers; and other risks and uncertainties identified in Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the SEC on February 21, ~~2019.~~2020.

For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.

INDEX	INDEX		INDEX

PART I - FINANCIAL INFORMATION	PART I - FINANCIAL INFORMATION		PART I - FINANCIAL INFORMATION	4

ITEM 1. FINANCIAL STATEMENTS	ITEM 1. FINANCIAL STATEMENTS		ITEM 1. FINANCIAL STATEMENTS	4

1.	Basis of Presentation	10	Basis of Presentation	9
2.	New Accounting Standards	11	New Accounting Standards	9
3.	Discontinued Operations	12	Fair Value Measurements	10
4.	Leases	13	Income Taxes	12
5.	Revenue	14	Inventories	12
6.	Fair Value Measurements	15	Restructuring	12
7.	Income Taxes	17	Product-Related Liabilities	13
8.	Inventories	17	Retirement Plans	13
9.	Restructuring	17	Contingent Liabilities	14
10.	Product-Related Liabilities	18	Stock Incentive Plan	15
11.	Retirement Plans	18	Earnings Per Share	15
12.	Contingent Liabilities	19	Related Party Transactions	16
13.	Stock Incentive Plan	21	Revenue Disaggregation	17
14.	Earnings Per Share	21	Subsequent Events	17
15.	Related Party Transactions	22
16.	Subsequent Events	22

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	35	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30

ITEM 4. CONTROLS AND PROCEDURES	ITEM 4. CONTROLS AND PROCEDURES	35	ITEM 4. CONTROLS AND PROCEDURES	30

PART II - OTHER INFORMATION	PART II - OTHER INFORMATION	36	PART II - OTHER INFORMATION	31

ITEM 1. LEGAL PROCEEDINGS	ITEM 1. LEGAL PROCEEDINGS	36	ITEM 1. LEGAL PROCEEDINGS	31

ITEM 1A. RISK FACTORS	ITEM 1A. RISK FACTORS	36	ITEM 1A. RISK FACTORS	31

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	36	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33

ITEM 3. DEFAULTS UPON SENIOR SECURITIES	ITEM 3. DEFAULTS UPON SENIOR SECURITIES	36	ITEM 3. DEFAULTS UPON SENIOR SECURITIES	33

ITEM 4. MINE SAFETY DISCLOSURES	ITEM 4. MINE SAFETY DISCLOSURES	36	ITEM 4. MINE SAFETY DISCLOSURES	33

ITEM 5. OTHER INFORMATION	ITEM 5. OTHER INFORMATION	36	ITEM 5. OTHER INFORMATION	33

ITEM 6. EXHIBITS	ITEM 6. EXHIBITS	37	ITEM 6. EXHIBITS	34

Three months ended

Nine months ended

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

Net sales

$
2,027.7

$
2,033.0

$
6,356.4

$
6,485.4

Cost of sales

(1,648.6
)

(1,646.9
)

(5,198.8
)

(5,199.3
)
Gross profit

379.1

386.1

1,157.6

1,286.1

Selling, general and administrative expenses

(97.7
)

(90.0
)

(300.2
)

(290.9
)
Research, development and engineering expenses, net

(99.1
)

(101.9
)

(323.5
)

(327.9
)
Amortization of intangibles

(2.9
)

(2.8
)

(8.6
)

(8.5
)
Other income (expense), net

(25.6
)

1.1

(28.8
)

6.2

Operating income

153.8

192.5

496.5

665.0

Income from equity method investments

0.4

0.2

1.6

2.8

Interest income

0.7

1.3

2.7

4.1

Interest expense

(17.1
)

(18.9
)

(52.6
)

(46.2
)
Other non-operating items, net

(3.4
)

(3.8
)

(9.4
)

(15.4
)
Income from continuing operations before income taxes

134.4

171.3

438.8

610.3

Income tax expense

(48.4
)

(53.3
)

(131.9
)

(140.0
)
Net income from continuing operations

86.0

118.0

306.9

470.3

Loss from discontinued operations, net of income taxes (Note 3)

—

—

—

(195.8
)
Net income

86.0

118.0

306.9

274.5

Less: Net income from continuing operations attributable to non-
   controlling interest

0.6

0.5

1.0

1.4

Less: Net loss from discontinued operations attributable to non-
   controlling interest

—

—

—

(8.3
)
Net income attributable to controlling interest

$
85.4

$
117.5

$
305.9

$
281.4

Amounts attributable to controlling interest:

Net Income from continuing operations

$
85.4

$
117.5

$
305.9

$
468.9

Net Loss from discontinued operations (Note 3)

—

—

—

(187.5
)
Net income attributable to controlling interest

$
85.4

$
117.5

$
305.9

$
281.4

Earnings per share continuing operations – basic ¹⁾

$
0.98

$
1.35

$
3.51

$
5.38

Loss per share discontinued operations – basic ¹⁾

—

—

—

(2.15
)
Basic earnings per share

$
0.98

$
1.35

$
3.51

$
3.23

Earnings per share continuing operations – diluted ¹⁾

$
0.98

$
1.34

$
3.50

$
5.37

Loss per share discontinued operations – diluted ¹⁾

—

—

—

(2.15
)
Diluted earnings per share

$
0.98

$
1.34

$
3.50

$
3.22

Weighted average number of shares outstanding, net of
   treasury shares (in millions)

87.2

87.1

87.2

87.1

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

87.3

87.4

87.4

87.3

Cash dividend per share – declared

$
0.62

$
0.62

$
1.86

$
1.86

Cash dividend per share – paid

$
0.62

$
0.62

$
1.86

$
1.84

	Three months ended September 30						Nine months ended September 30
	2020			2019			2020			2019
Net sales	$	2,037.2		$	2,027.7		$	4,930.6		$	6,356.4
Cost of sales		(1,637.5	)		(1,648.6	)		(4,185.5	)		(5,198.8	)
Gross profit		399.7			379.1			745.1			1,157.6
Selling, general and administrative expenses		(91.7	)		(97.7	)		(283.7	)		(300.2	)
Research, development and engineering expenses, net		(101.6	)		(99.1	)		(292.2	)		(323.5	)
Amortization of intangibles		(2.4	)		(2.9	)		(7.5	)		(8.6	)
Other income (expense), net		(29.5	)		(25.6	)		(86.4	)		(28.8	)
Operating income		174.5			153.8			75.3			496.5
Income from equity method investment		0.7			0.4			1.0			1.6
Interest income		1.1			0.7			3.7			2.7
Interest expense		(21.2	)		(17.1	)		(53.3	)		(52.6	)
Other non-operating items, net		(6.6	)		(3.4	)		(13.4	)		(9.4	)
Income before income taxes		148.5			134.4			13.3			438.8
Income tax expense		(49.7	)		(48.4	)		(13.9	)		(131.9	)
Net income (loss)		98.8			86.0			(0.6	)		306.9
Less: Net income attributable to non-controlling interest		0.5			0.6			1.0			1.0
Net income (loss) attributable to controlling interest	$	98.3		$	85.4		$	(1.6	)	$	305.9

Net earnings (loss) per share – basic ¹⁾	$	1.13		$	0.98		$	(0.02	)	$	3.51
Net earnings (loss) per share – diluted ¹⁾	$	1.12		$	0.98		$	(0.02	)	$	3.50

Weighted average number of shares outstanding, net of treasury shares (in millions)		87.3			87.2			87.3			87.2
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions)		87.5			87.3			87.3			87.4

Cash dividend per share – declared ²⁾	$	—		$	0.62		$	0.62		$	1.86
Cash dividend per share – paid	$	—		$	0.62		$	0.62		$	1.86

See Notes to the unaudited ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

Three months ended

Nine months ended

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

Net income

$
86.0

$
118.0

$
306.9

$
274.5

Other comprehensive loss before tax:

Change in cumulative translation adjustments

(71.6
)

(30.0
)

(44.7
)

(134.8
)
Net change in cash flow hedges

—

—

—

1.1

Net change in unrealized components of defined benefit plans

0.0

0.5

0.1

8.0

Other comprehensive loss, before tax

(71.6
)

(29.5
)

(44.6
)

(125.7
)
Tax effect allocated to other comprehensive loss

0.0

(0.1
)

0.0

(1.9
)
Other comprehensive  loss, net of tax

(71.6
)

(29.6
)

(44.6
)

(127.6
)
Comprehensive income

14.4

88.4

262.3

146.9

Less: Comprehensive income (loss) attributable to
   non-controlling interest

0.1

(0.6
)

0.6

(7.6
)
Comprehensive income attributable to controlling
   interest

$
14.3

$
89.0

$
261.7

$
154.5

	Three months ended September 30						Nine months ended September 30
	2020			2019			2020			2019
Net income (loss)	$	98.8		$	86.0		$	(0.6	)	$	306.9
Other comprehensive income (loss) before tax:
Change in cumulative translation adjustments		56.1			(71.6	)		(19.1	)		(44.7	)
Net change in unrealized components of defined benefit plans		1.7			0.0			5.7			0.1
Other comprehensive income (loss), before tax		57.8			(71.6	)		(13.4	)		(44.6	)
Tax effect allocated to other comprehensive loss		(0.6	)		0.0			(1.8	)		0.0
Other comprehensive income (loss), net of tax		57.2			(71.6	)		(15.2	)		(44.6	)
Comprehensive income (loss)		156.0			14.4			(15.8	)		262.3
Less: Comprehensive income attributable to non-controlling interest		1.0			0.1			1.3			0.6
Comprehensive income (loss) attributable to controlling interest	$	155.0		$	14.3		$	(17.1	)	$	261.7

See Notes to the unaudited ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

	As of						As of
	September 30, 2019			December 31, 2018			September 30, 2020			December 31, 2019
Assets
Cash and cash equivalents	$	334.4		$	615.8		$	1,476.5		$	444.7
Receivables, net		1,653.5			1,652.1			1,615.7			1,626.7
Inventories, net		731.8			757.9			713.8			740.9
Other current assets		185.4			244.6			230.5			189.8
Related party receivables (Note 15)		3.7			15.0
Total current assets		2,908.8			3,285.4			4,036.5			3,002.1
Property, plant and equipment, net		1,747.9			1,690.1			1,779.1			1,815.7
Investments and other non-current assets		371.1			323.5			475.6			386.4
Operating lease right-of-use assets (Note 4)		154.1			—
Operating lease right-of-use assets								137.3			156.8
Goodwill		1,383.3			1,389.9			1,389.6			1,387.9
Intangible assets, net		24.3			32.7			15.3			22.3
Total assets	$	6,589.5		$	6,721.6		$	7,833.4		$	6,771.2

Liabilities and equity
Short-term debt	$	289.9		$	620.7
Short-term debt ¹⁾							$	1,025.5		$	368.1
Accounts payable		890.4			978.3			912.4			950.6
Accrued expenses		839.6			935.4			1,011.0			824.7
Operating lease liabilities - current								35.9			37.8
Other current liabilities		228.3			267.4			236.5			229.0
Related party liabilities (Note 15)		18.9			63.7
Operating lease liabilities - current (Note 4)		37.7			—
Total current liabilities		2,304.8			2,865.5			3,221.3			2,410.2
Long-term debt		1,815.1			1,609.0
Long-term debt ¹⁾								2,007.1			1,726.1
Pension liability		199.9			198.2			239.2			240.2
Operating lease liabilities - non-current								102.0			119.4
Other non-current liabilities		153.4			152.1			150.5			152.9
Operating lease liabilities - non-current (Note 4)		117.0			—
Total non-current liabilities		2,285.4			1,959.3			2,498.8			2,238.6
Common stock		102.8			102.8			102.8			102.8
Additional paid-in capital		1,329.3			1,329.3			1,329.3			1,329.3
Retained earnings		2,182.3			2,041.8			2,282.8			2,283.5
Accumulated other comprehensive loss		(467.4	)		(423.2	)		(464.4	)		(448.9	)
Treasury stock		(1,160.3	)		(1,167.0	)		(1,150.7	)		(1,157.5	)
Total controlling interest		1,986.7			1,883.7
Total controlling interest's equity								2,099.8			2,109.2
Non-controlling interest		12.6			13.1			13.5			13.2
Total equity		1,999.3			1,896.8			2,113.3			2,122.4
Total liabilities and equity	$	6,589.5		$	6,721.6		$	7,833.4		$	6,771.2

	Nine months ended						Nine months ended September 30
	September 30, 2019			September 30, 2018			2020			2019
Operating activities
Net income from continuing operations	$	306.9		$	470.3
Net loss from discontinued operations		—			(195.8	)
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(0.6	)	$	306.9
Adjustments, non-cash items, to reconcile net (loss) income to cash provided by operating activities:
Depreciation and amortization		260.1			308.4			268.1			260.1
Separation costs		—			11.5
Other, net		2.2			19.7
Net change in:
Deferred income taxes								(82.4	)		2.4
Other non-cash items, net								(1.0	)		0.8
Increase (decrease) in operating capital:
EC antitrust payment		(203.0	)		—			—			(203.0	)
Net change in operating assets and liabilities		(37.8	)		(312.9	)		163.2			(37.8	)
Other, net								32.7			(1.0	)
Net cash provided by operating activities		328.4			301.2			380.0			328.4

Investing activities
Expenditures for property, plant and equipment		(360.0	)		(425.2	)		(231.5	)		(360.0	)
Proceeds from sale of property, plant and equipment		1.9			3.8			3.0			1.9
Acquisitions of businesses and interest in/additional contributions to affiliates, net of cash acquired		—			(72.9	)
Net cash used in investing activities		(358.1	)		(494.3	)		(228.5	)		(358.1	)

Financing activities
Net (decrease) increase in short-term debt		(309.4	)		374.9
Issuance of long-term debt, net of discount		243.5			582.2
Net decrease in short-term debt ¹⁾								(197.7	)		(309.4	)
Increase of long-term debt ¹⁾								1,720.1			243.5
Repayment of long-term debt								(629.5	)		—
Debt issuance cost		(0.3	)		(2.6	)		—			(0.3	)
Dividends paid		(162.7	)		(160.7	)		(54.1	)		(162.7	)
Dividends paid to non-controlling interest		(1.1	)		(2.0	)		(1.0	)		(1.1	)
Common stock options exercised		0.3			8.2			0.2			0.3
Capital distribution to Veoneer		—			(971.8	)
Net cash used in financing activities		(229.7	)		(171.8	)
Net cash provided by (used in) financing activities								838.0			(229.7	)
Effect of exchange rate changes on cash and cash equivalents		(22.0	)		(60.9	)		42.3			(22.0	)
Decrease in cash and cash equivalents		(281.4	)		(425.8	)
Increase (decrease) in cash and cash equivalents								1,031.8			(281.4	)
Cash and cash equivalents at beginning of period		615.8			959.5			444.7			615.8
Cash and cash equivalents at end of period	$	334.4		$	533.7		$	1,476.5		$	334.4

	Shares outstanding		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total parent shareholders' equity			Non- controlling interest			Total equity			Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total controlling interest's equity			Non- controlling interest			Total equity
Balances at December 31, 2018	87.1		$	102.8	$	1,329.3	$	2,041.8		$	(423.2	)	$	(1,167.0	)	$	1,883.7		$	13.1		$	1,896.8
Balances at December 31, 2019																									$	102.8	$	1,329.3	$	2,283.5		$	(448.9	)	$	(1,157.5	)	$	2,109.2		$	13.2		$	2,122.4
Comprehensive Income (loss):
Net income																														74.8			—						74.8			0.1			74.9
Foreign currency translation adjustment																														—			(101.6	)					(101.6	)		(0.2	)		(101.8	)
Pension liability																														—			0.6						0.6			—			0.6
Total Comprehensive Income (loss)																										—		—	74.8				(101.0	)		—			(26.2	)		(0.1	)		(26.3	)
Stock-based compensation																														—			—			1.6			1.6			—			1.6
Cash dividends declared																														(53.6	)		—						(53.6	)		—			(53.6	)
Balances at March 31, 2020																										102.8		1,329.3		2,304.7			(549.9	)		(1,155.9	)		2,031.0			13.1			2,044.1
Comprehensive Income (loss):
Net loss																														(174.7	)		—						(174.7	)		0.4			(174.3	)
Foreign currency translation adjustment																														—			26.6						26.6			0.0			26.6
Pension liability																														—			2.2						2.2			—			2.2
Total Comprehensive Income (loss)																										—		—		(174.7	)		28.8			—			(145.9	)		0.4			(145.5	)
Stock-based compensation																														—			—			2.2			2.2			—			2.2
Cash dividends declared¹⁾																														54.2			—						54.2			—			54.2
Balances at June 30, 2020																										102.8		1,329.3		2,184.2			(521.1	)		(1,153.7	)		1,941.5			13.5			1,955.0
Comprehensive Income:
Net income								111.4			—						111.4			0.1			111.5							98.3			—						98.3			0.5			98.8
Foreign currency translation adjustment								—			20.5						20.5			0.3			20.8							—			55.6						55.6			0.5			56.1
Pension liability								—			0.1						0.1			—			0.1							—			1.1						1.1						1.1
Total Comprehensive Income		—		—		—	111.4			20.6				—			132.0			0.4			132.4			—		—		98.3			56.7			—			155.0			1.0			156.0
Stock-based compensation		0.1						—			—			1.6			1.6			—			1.6							—			—			3.0			3.0			—			3.0
Dividends paid to non-controlling interest on subsidiary shares																																										(1.0	)		(1.0	)
Cash dividends declared								(54.3	)		—						(54.3	)		—			(54.3	)						0.1									0.1						0.1
Distribution to Veoneer								(2.5	)		—						(2.5	)		—			(2.5	)
Balances at March 31, 2019		87.2		102.8		1,329.3		2,096.4			(402.6	)		(1,165.4	)		1,960.5			13.5			1,974.0
Comprehensive Income:
Net income								109.1			—						109.1			0.3			109.4
Foreign currency translation adjustment								—			6.3						6.3			(0.2	)		6.1
Pension liability								—			0.0						0.0			—			0.0
Total Comprehensive Income		—		—		—		109.1			6.3			—			115.4			0.1			115.5
Stock-based compensation		0.0						—			—			2.6			2.6			—			2.6
Cash dividends declared								(54.2	)		—						(54.2	)		—			(54.2	)
Distribution to Veoneer								(0.2	)		—						(0.2	)		—			(0.2	)
Balances at June 30, 2019		87.2		102.8		1,329.3		2,151.1			(396.3	)		(1,162.8	)		2,024.1			13.6			2,037.7
Comprehensive Income:
Net income								85.4			—						85.4			0.6			86.0
Foreign currency translation adjustment								—			(71.1	)					(71.1	)		(0.5	)		(71.6	)
Pension liability								—			0.0						0.0			—			0.0
Total Comprehensive Income (loss)		—		—		—		85.4			(71.1	)		—			14.3			0.1			14.4
Stock-based compensation		0.0						—			—			2.5			2.5			—			2.5
Cash dividends declared								(54.2	)		—						(54.2	)		—			(54.2	)
Dividends paid to non-controlling interest on subsidiary shares											—						—			(1.1	)		(1.1	)
Distribution to Veoneer								—			—						—			—			—
Balances at September 30, 2019	87.2		$	102.8	$	1,329.3	$	2,182.3		$	(467.4	)	$	(1,160.3	)	$	1,986.7		$	12.6		$	1,999.3
Other																														0.2									0.2						0.2
Balances at September 30, 2020																									$	102.8	$	1,329.3	$	2,282.8		$	(464.4	)	$	(1,150.7	)	$	2,099.8		$	13.5		$	2,113.3

	Shares outstanding		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total parent shareholders' equity			Non- controlling interest			Total equity			Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total controlling interest's equity			Non- controlling interest			Total equity
Balances at December 31, 2017		87.0	$	102.8	$	1,329.3	$	4,079.2		$	(287.5	)	$	(1,188.7	)	$	4,035.1		$	134.3		$	4,169.4
Balances at December 31, 2018																									$	102.8	$	1,329.3	$	2,041.8		$	(423.2	)	$	(1,167.0	)	$	1,883.7		$	13.1		$	1,896.8
Comprehensive Income:
Net income								126.7			—						126.7			(4.3	)		122.4							111.4			—						111.4			0.1			111.5
Foreign currency translation adjustment								—			85.7						85.7			5.8			91.5							—			20.5						20.5			0.3			20.8
Net change in cash flow hedges								—			0.4						0.4			—			0.4
Pension liability								—			0.6						0.6			—			0.6							—			0.1						0.1			—			0.1
Total Comprehensive Income		—		—		—	126.7			86.7				—			213.4			1.5			214.9			—		—	111.4			20.6				—			132.0			0.4			132.4
Stock-based compensation								—			—			8.6			8.6			—			8.6							—			—			1.6			1.6			—			1.6
Cash dividends declared								(54.2	)		—						(54.2	)		—			(54.2	)						(54.3	)		—						(54.3	)		—			(54.3	)
Adjustment due to adoption of ASC 606								3.3			—						3.3			—			3.3
Adjustment due to adoption of ASU 2018-02								10.2			(10.2	)					—			—			—
Balances at March 31, 2018		87.0		102.8		1,329.3		4,165.2			(211.0	)		(1,180.1	)		4,206.2			135.8			4,342.0
Distribution to Veoneer																														(2.5	)		—						(2.5	)		—			(2.5	)
Balances at March 31, 2019																										102.8		1,329.3		2,096.4			(402.6	)		(1,165.4	)		1,960.5			13.5			1,974.0
Comprehensive Income:
Net income								37.2			—						37.2			(3.1	)		34.1							109.1			—						109.1			0.3			109.4
Foreign currency translation adjustment								—			(190.9	)					(190.9	)		(5.4	)		(196.3	)						—			6.3						6.3			(0.2	)		6.1
Net change in cash flow hedges								—			0.7						0.7			—			0.7
Pension liability								—			5.1						5.1			—			5.1							—			0.0						0.0			—			0.0
Total Comprehensive Income (loss)		—		—		—		37.2			(185.1	)		—			(147.9	)		(8.5	)		(156.4	)
Total Comprehensive Income																										—		—		109.1			6.3			—			115.4			0.1			115.5
Stock-based compensation								—			—			7.2			7.2			—			7.2							—			—			2.6			2.6			—			2.6
Cash dividends declared								(54.2	)		—						(54.2	)		—			(54.2	)						(54.2	)		—						(54.2	)		—			(54.2	)
Dividends paid to non-controlling interest on subsidiary shares								—			—						—			(2.0	)		(2.0	)
Distribution to Veoneer								(2,029.8	)		13.0						(2,016.8	)		(112.2	)		(2,129.0	)						(0.2	)		—						(0.2	)		—			(0.2	)
Balances at June 30, 2018		87.0		102.8		1,329.3		2,118.4			(383.1	)		(1,172.9	)		1,994.5			13.1			2,007.6
Balances at June 30, 2019																										102.8		1,329.3		2,151.1			(396.3	)		(1,162.8	)		2,024.1			13.6			2,037.7
Comprehensive Income:
Net income								117.5			—						117.5			0.5			118.0							85.4			—						85.4			0.6			86.0
Foreign currency translation adjustment								—			(28.9	)					(28.9	)		(1.1	)		(30.0	)						—			(71.1	)					(71.1	)		(0.5	)		(71.6	)
Pension liability								—			0.4						0.4			—			0.4							—			0.0						0.0			—			0.0
Total Comprehensive Income (loss)		—		—		—		117.5			(28.5	)		—			89.0			(0.6	)		88.4			—		—		85.4			(71.1	)		—			14.3			0.1			14.4
Stock-based compensation								—			—			3.1			3.1			—			3.1							—			—			2.5			2.5			—			2.5
Cash dividends declared								(54.1	)		—						(54.1	)		—			(54.1	)						(54.2	)		—						(54.2	)		—			(54.2	)
Distribution to Veoneer								7.9			—						7.9			0.5			8.4
Balances at September 30, 2018		87.0	$	102.8	$	1,329.3	$	2,189.7		$	(411.6	)	$	(1,169.8	)	$	2,040.4		$	13.0		$	2,053.4
Dividends paid to non-controlling interest on subsidiary shares																																										(1.1	)		(1.1	)
Balances at September 30, 2019																									$	102.8	$	1,329.3	$	2,182.3		$	(467.4	)	$	(1,160.3	)	$	1,986.7		$	12.6		$	1,999.3

See Notes to the unaudited ~~condensed consolidated financial statements.~~Condensed Consolidated Financial Statements.

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

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited consolidated financial statements and all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, ~~2019.~~2020.

The Condensed Consolidated Balance Sheet at December 31, ~~2018~~2019 has been derived from the audited consolidated financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements.

On June 29, 2018 (the “Distribution Date”), Autoliv completed the spin-off of its former Electronics segment (the “spin-off”) through the distribution of all of the issued and outstanding stock of Veoneer, Inc. (“Veoneer”). To effect the spin-off, Autoliv distributed to each Autoliv stockholder 1 share of Veoneer common stock, par value $1.00 per share, for every 1 share of Autoliv common stock, par value $1.00 per share, held by such person on the common stock record date, and each Autoliv Swedish Depository Receipt (SDR) holder received 1 Veoneer SDR for each Autoliv SDR held by such person on the applicable SDR record date. On July 2, 2018, Veoneer’s common stock began regular-way trading on the New York Stock Exchange under the symbol “VNE” and its SDRs began trading on Nasdaq Stockholm under the symbol “VNE SDB.” The Company ~~did not retain any equity interest in Veoneer.~~

In accordance with U.S. GAAP, the financial position and results of operations of the Electronics business are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The restated historical financial statements reflecting the spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports. The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding. The cash flows and comprehensive income related to the Electronics business have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for all periods presented. With the exception of Note 3, the Notes to the Unaudited Condensed Consolidated Financial Statements reflect the continuing operations of Autoliv. See Note 3 - Discontinued Operations below for additional information regarding discontinued operations.

On April 1, 2018, in preparation for the spin-off, pursuant to the terms of a master transfer agreement entered into between Autoliv and Veoneer, assets related to the Electronics business were transferred to, and liabilities related to the Electronics business were retained or assumed by, Veoneer. However, responsibility for certain product, warranty and recall liabilities for Electronics products manufactured prior to April 1, 2018 was retained by Autoliv as provided in the distribution agreement between Autoliv and Veoneer, which governs certain relationships between the parties following the spin-off.

Certain amounts in the prior year’s condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as a result of the spin-off.

~~Autoliv has concluded that it~~ has 1 reportable segment, based on the way the Company currently evaluates its financial performance and manages its operations. The Company will re-evaluate the one reportable segment as the operating model evolves, including management structure. The Company’s single reportable segmentwhich includes ~~the Company’s~~Autoliv’s airbag and seatbelt products and components. The operating results of the operating segment are regularly reviewed by the Company’s chief operating decision maker to assess the performance of the individual operating segment and make decisions about resources to be allocated to the operating segment.

Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the SEC on February 21, ~~2019.~~2020.

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have an immaterial impact on the Company’s consolidated financial statements.

~~In August 2017, the FASB issued ASU 2017-12, Derivative and Hedging (Topic 815), Targeted improvements to accounting for hedging activities~~. The amendments in ASU 2017-12 better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The amendments in ASU 2017-12 also include certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The amendments in ASU 2017-12 modify disclosures required in current GAAP. Those modifications include a tabular disclosure related to the effect on the income statement of fair value and cash flow hedges and eliminate the requirement to disclose the ineffective portion of the change in fair value of hedging instruments. The amendments also require new tabular disclosures related to cumulative basis adjustments for fair value hedges. The amendments in ASU 2017-12 are effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment related to eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of retained earnings as of the beginning of the annual period that an entity adopts the amendments in ASU 2017-12. ~~The Company adopted ASU 2017-12 in the annual period beginning January 1, 2019.~~ ~~The adoption of ASU 2017-12 did not have a material impact on the consolidated financial statements since the Company had no cash flow hedges at the date of adoption.~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842),~~ to increase transparency and comparability among organizations by recognizing lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 affects any entity that enters into a lease, with some specified scope exceptions. For public business entities, the amendments in ASU 2016-02 are effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company adopted ASU 2016-02 in the annual period beginning January 1, 2019. The Company applied the modified retrospective transition method and elected the transition option to use the effective date January 1, 2019 as the date of initial application. The Company did not adjust its comparative period financial statements for effects of ASU 2016-02, nor has it made the new required lease disclosures for periods before the effective date. The Company has recognized its cumulative effect transition adjustment as of the effective date. In addition, the Company has elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, will allow the Company to carry forward the historical lease classification. The adoption of the new standard resulted in recording operating lease assets and lease liabilities of $155.4 million as of January 1, 2019, which is shown in the table below. No material finance leases were identified as of January 1, 2019. In addition, there was no material impact on the consolidated financial statements where the Company is deemed to be the lessor in an “embedded lease” arrangement.

~~In August 2018, the FASB issued ASU 2018-14,~~ ~~Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20), Changes to the Disclosure Requirements for Defined Benefit Plans, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.~~The amendments in ASU 2018-14 remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. The amendments in ASU 2018-14 are effective for public business entities for annual periods ending after December 15, 2020. Early adoption is permitted. An entity should apply the amendments in ASU 2018-14 on a retrospective basis to all periods presented. The Company believes that the pending adoption of ASU 2018-14 will have a minor impact on the disclosures to the consolidated financial statements.

~~In August 2018, the FASB issued ASU 2018-13,~~ ~~Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement~~, which modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in ASU 2018-13 are effective for all entities for annual periods beginning after December 15, 2019, including interim periods within these annual periods. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial annual year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify disclosures upon issuance of ASU 2018-13. The Company believes that the pending adoption of ASU 2018-13 will not have a material impact on the disclosures to the consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,, which requires the measurement and recognition of expected credit losses for financial assets held and ~~requires~~ enhanced ~~disclosures regarding significant estimates and judgments used~~disclosures. The Company’s financial assets in ~~estimating credit losses.~~the scope of ASU 2016-13 mainly consists of short-term trade receivables. Historically, the Company’s actual credit losses have not been material. In addition to continuing to individually assess overdue customer balances for expected credit losses, the Company has implemented a new methodology that reflects the expected credit losses on receivables considering both historical experience as well as forward looking assumptions. The method calculates the expected credit loss for a group of customers by using the customer groups’ average short-term default rates based on officially published credit ratings and the Company’s historical experience. These default rates are considered the Company’s best estimate of the customer’s ability to pay. The Company will regularly reassess the customer group’s and the applied customer group’s default rates by using its best judgement when considering changes in customer’s credit ratings, customer’s historical payments and loss experience, current market and economic conditions and the Company’s expectations of future market and economic conditions. ASU 2016-13 was adopted prospectively by the Company on January 1, 2020. The adoption of ASU 2016-13 did not have a material impact on the consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40), Customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract, which align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in ASU 2018-15. The amendments in ASU 2018-15 are effective for public business entities for annual periods beginning after December 15, 2019, and ~~early~~interim periods within those annual years. The Company adopted ASU 2018-15 prospectively as of January 1, 2020 and the impact on the consolidated financial statements has not been material through September 30, 2020. The future impact of ASU 2018-15 will depend on the nature of the Company’s future cloud computing arrangements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the reference rate reform if certain criteria are met. The amendments in ASU 2020-04 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The adoption of ASU 2020-04 did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes. ASU 2019-12 is ~~permitted~~effective for public business entities for annual periods beginning after December 15, ~~2018.~~2020, and early adoption is permitted. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company plans to adopt ASU 2019-12 as of January 1, 2021. The Company has ~~a project team that is currently evaluating the impact of its pending adoption of ASU 2016-13 on the consolidated financial statements. The Company believes~~concluded that the pending adoption of ASU ~~2016-13~~2019-12 will not have a material impact on the Company’s consolidated financial statements.

As discussed in Note 1. Basis of Presentation above, on June 29, 2018, the Company completed the spin-off of Veoneer and the requirements for the presentation of Veoneer as a discontinued operation were met on that date. Accordingly, Veoneer’s historical financial results are reflected in the Company’s unaudited condensed consolidated financial statements as discontinued operations. The Company did not allocate any general corporate overhead or interest expense to discontinued operations.

The financial results of Veoneer are presented as loss from discontinued operations, net of income taxes in the unaudited Consolidated Statements of Income. The following table presents the financial results of Veoneer (dollars in millions).

~~The Company incurred $70.9 million in separation costs related to the spin-off of Veoneer for the nine months period ended September 30, 2018 and was reported in Other income (expense), net.~~ These costs were primarily related to professional fees associated with planning the spin-off, as well as spin-off activities within finance, tax, legal and information system functions and certain investment banking fees incurred upon the completion of the spin-off.

In connection with the spin-off, Autoliv entered into definitive agreements with Veoneer that, among other matters, set forth the terms and conditions of the spin-off and provide a framework for Autoliv’s relationship with Veoneer after the spin-off (the “Spin-Off Agreements”). For more detailed information concerning the Spin-off Agreements, see Note 3 to the Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 21, 2019. No changes have been made to any of the agreements as of September 30, 2019.

In connection with the spin-off, Autoliv capitalized Veoneer with approximately $1 billion of cash. Net assets of $2,129 million, including approximately $1 billion of cash, were transferred to Veoneer on or prior to the Distribution Date, including $13 million of accumulated other comprehensive loss (primarily related to pension and cumulative translation adjustment) and the non-controlling interest of $112 million. This resulted in a $2,030 million reduction to retained earnings.In the second half of 2018, an adjustment to the cash contribution amount of $5 million was made reducing the net assets contributed to Veoneer to $2,123 million. In the second quarter of 2019, an adjustment of $0.2 million was made to true-up the $2.5 million contribution made to Veoneer as an adjustment of deferred tax assets related to Veoneer.

The following table presents depreciation, amortization, capital expenditures, acquisition of businesses and significant non-cash items of the discontinued operations related to Veoneer (dollars in millions).

The Company has operating leases for offices, manufacturing and research buildings, machinery, automobiles, data processing and other equipment. The Company’s leases have remaining lease terms of 1-47 years, some of which include options to extend the leases for up to 25 years, and some of which include options to terminate the leases within 1 year.

Finance lease right-of-use assets are presented together with other property, plant and equipment assets and finance lease liabilities are presented together with other short-term and long-term liabilities in the Condensed Consolidated Balance Sheets. However, the Company has not identified any material finance leases as of September 30, 2019.

~~As of September 30, 2019, the Company has no additional material operating leases that have not yet commenced.~~

The Company has elected the practical expedient of not separating lease components from non-lease components for all its classes of underlying assets. The Company has also elected to recognize the lease payments for short-term leases in its consolidated statement of income on a straight-line basis over the lease term and recognize the variable lease payments in the period in which the obligation for those payments is incurred.

If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgement when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.

~~The following tables provide information about the Company’s leases. Since finance leases are not material the finance lease cost components have not been disclosed in the tables below.~~

~~In the following tables, revenue from the Company’s continuing operations is disaggregated by primary region and products.~~

The contract assets relate to the Company's rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts and is included in Other current assets on the Condensed Consolidated Balance Sheet. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. The net change in the contract assets balance, reflecting the adjustments needed to align revenue recognition for work completed but not billed, for the three and nine months period ended September 30, 2019 is not material.

Certain contracts have resulted in consideration in advance of fulfilling the performance obligations and the amounts received have been classified as contract liabilities within Other current liabilities and Other non-current liabilities on the Condensed Consolidated Balance Sheet. The portion of the contract liabilities recognized as revenue for the three and nine months period ended September 30, 2019 is not material.

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

The Company uses derivative financial instruments ~~“derivatives”,~~(“derivatives”) as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial policy. All derivatives are recognized in the consolidated financial statements at fair value. ~~Certain derivatives are from time to time designated either as fair value hedges or cash flow hedges in line with the hedge accounting criteria.~~ For certain ~~other~~ derivatives hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates.

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

All the Company’s derivatives are ~~all~~ classified as Level 2 offinancial instruments in the fair value ~~hierarchy~~hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and ~~there were no transfers between~~liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the ~~levels during this or comparable periods (for further information about the hierarchy levels, see the Company’s Annual Report on Form 10-K).~~parameters of which can be directly observed.

The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis ~~for the continuing operations~~ (dollars in millions). The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (ISDA agreements) with all derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 have been presented on a gross basis. According to the close-out netting agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below.

There were 0 derivatives designated as hedging instruments as of September 30, ~~2019~~2020 and December 31, ~~2018~~2019 related to the ~~continuing~~ operations.

Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding at September 30, ~~2019~~2020 and December 31, ~~2018~~2019 were foreign exchange swaps.

For the three ~~months~~month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, the gains and losses recognized in other non-operating items, net were a loss of ~~$9.5~~$17.7 million and a ~~gain~~loss of $1$9.5 million, respectively, for derivative instruments not designated as hedging instruments. For the nine ~~months~~month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, the gains and losses recognized in other non-operating items, net were a loss of ~~$6.9~~$19.4 million and a loss of ~~$4.3~~$6.9 million, respectively, for derivative instruments not designated as hedging instruments.

For the three and nine month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, the gains and losses recognized as interest expense were immaterial.

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

In the table below “Bonds” relates to multiple USPP bonds and Euro denominated bonds. “Loans” relates to utilized long-term loan facilities. In June 2019, the Company issued a €100 million bond and utilized a SEK 1,200 million long term loan facility.

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

	September 30,		September 30,		December 31,		December 31,
	2019		2019		2018		2018		September 30, 2020				December 31, 2019
	Carrying value¹⁾		Fair value		Carrying value¹⁾		Fair value		Carrying value¹⁾		Fair value		Carrying value¹⁾		Fair value
Long-term debt
Bonds	$	1,692.1	$	1,788.1	$	1,609.0	$	1,628.9	$	1,347.4	$	1,443.5	$	1,597.5	$	1,671.1
Loans		122.5		122.3		—		—		659.7		675.8		128.6		128.6
Other long-term debt		0.5		0.5		—		—
Total	$	1,815.1	$	1,910.9	$	1,609.0	$	1,628.9	$	2,007.1	$	2,119.3	$	1,726.1	$	1,799.7

Short-term debt
Commercial paper	$	172.4	$	172.4	$	342.6	$	342.6	$	0.0	$	0.0	$	230.7	$	230.7
Short-term portion of long-term debt		60.0		61.6		268.1		270.4
Short-term portion of long-term debt ²⁾										991.8		998.2		112.0		112.1
Overdrafts and other short-term debt		57.5		57.5		10.0		10.0		33.7		33.7		25.4		25.3
Total	$	289.9	$	291.5	$	620.7	$	623.0	$	1,025.5	$	1,031.9	$	368.1	$	368.1

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

The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets.

For the three and nine month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, the Company did 0t record any material impairment charges on its long-lived assets for its ~~continuing~~ operations.

The effective tax rate in the third quarter of ~~2019~~2020 was ~~36.0%~~33.5% compared to ~~31.1%~~36.0% in the same quarter of ~~2018.~~2019. Discrete tax items, net in the third quarter of ~~2019~~2020 had ~~an unfavorable~~a favorable impact of ~~0.2%~~9.9%. In the third quarter of ~~2018,~~2019, discrete tax items, net had an unfavorable impact of 0.2%. The effective tax rate for the first nine months of ~~2019~~2020 was ~~30.1%~~104.4% compared to ~~23.0%~~30.1% in the same period of ~~2018.~~2019. The year to date 2020 tax rate was negatively impacted by unfavorable country mix and capacity alignment costs giving rise to losses with no tax benefit against a low level of reported pre-tax income. Discrete tax items, net for the first nine months of ~~2019~~2020 had a favorable impact of ~~0.2%.~~187.5%, principally from one-time tax benefits recorded as a result of final U.S. tax regulations issued in the third quarter of 2020 against a low level of reported pre-tax income. In the same period of ~~2018,~~2019, discrete tax items, net had a favorable impact of ~~5.3%~~0.2%.

The Company files income tax returns in the ~~United States~~U.S. federal jurisdiction, and various states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2010.

As of September 30, ~~2019,~~2020, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods.

During the first nine months of ~~2019,~~2020, the Company recorded a net increase of ~~$0.6~~$1.1 million to income tax reserves for unrecognized tax benefits based on tax positions related to the current year, including accruing additional interest related to unrecognized tax benefits offrom prior years. Of the total unrecognized tax benefits of ~~$57.3~~$69.4 million recorded at September 30, ~~2019, $0~~2020, $1.8 million is classified as current tax payable within Other current liabilities and ~~$57.3~~$67.6 million is classified as non-current tax payable within Other non-current liabilities on the Condensed Consolidated Balance Sheet.

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

	As of						As of
	September 30, 2019			December 31, 2018			September 30, 2020			December 31, 2019
Raw materials	$	372.2		$	370.9		$	354.3		$	366.3
Work in progress		259.9			277.4			266.0			257.4
Finished products		183.3			194.7			182.9			200.4
Inventories		815.4			843.0			803.2			824.1
Inventory valuation reserve		(83.6	)		(85.1	)		(89.4	)		(83.2	)
Total inventories, net of reserve	$	731.8		$	757.9		$	713.8		$	740.9

~~Restructuring provisions are made on a case-by-case basis and primarily include severance costs incurred in connection with headcount reductions and plant consolidations.~~ The Company ~~expects~~recorded restructuring charges in the three month period ended September 30, 2020, mainly related to ~~finance restructuring programs over the next several years through cash generated from its ongoing operations or through cash available under existing credit facilities.~~footprint optimization activities in Europe. The Company ~~does not expect that~~recorded restructuring charges in the ~~execution~~nine month period ended September 30, 2020, mainly related to the structural efficiency program initiated in the second quarter of ~~these programs will have a material adverse impact on its liquidity position.~~2020 in the Americas and Europe and footprint optimization activities in Europe in the third quarter of 2020. For the three and nine month periods ended September 30, 2020, cash payments mainly relate to the structural efficiency program initiated in 2019.

As of September 30, 2020, approximately $60 million out of the $122.9 million in total reserve balance can be attributed to the structural efficiency program initiated in the second quarter of 2020. This program is expected to be concluded in 2021. Approximately $29 million of the balance can be attributed to footprint optimization activities in Europe in the third quarter of 2020. This program is expected to be concluded in 2023. The remaining balance mainly relates to the structural efficiency program initiated in 2019, whereof the main part is expected to be concluded in 2020.

The table below summarizes the change in the balance sheet position of the employee related restructuring reserves (dollars in millions). The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income.

~~The provisions in the three and nine month periods ended September 30, 2019 of $27.7 million and $41.4 million, respectively~~, mainly relate to a global reduction in indirect labor pursuant to the Company’s restructuring program initiated in the second quarter of 2019 and is expected to be concluded in the second quarter of 2020. The majority of reduction and expense to date relates to restructuring activities in Europe and the Americas. For the three and nine month periods ended September 30, 2019, cash payments of $15.2 and $21.7 million, respectively, mainly relate to restructuring activities initiated over the past few years in Western Europe.

As of September 30, 2019, approximately $36 million out of the $50.8 million total reserve balance can be attributed to the indirect labor reduction program. The remaining balance relates to older restructuring programs, primarily in Western Europe, which is expected to be settled in 2021.

~~The table below summarizes the change in the balance sheet position of the employee related restructuring reserves for the continuing operations (dollars in millions).~~ Restructuring costs other than employee related costs are immaterial for all periods presented.

	Three months ended						Nine months ended						Three months ended September 30						Nine months ended September 30
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018			2020			2019			2020			2019
Reserve at beginning of the period	$	40.3		$	36.0		$	33.4		$	39.6		$	99.6		$	40.3		$	56.1		$	33.4
Provision - charge		27.7			0.5			41.4			4.8			32.8			27.7			103.7			41.4
Provision - reversal		(0.2	)		—			(0.3	)		—			(2.0	)		(0.2	)		(9.4	)		(0.3	)
Cash payments		(15.2	)		(4.0	)		(21.7	)		(10.8	)		(11.6	)		(15.2	)		(32.0	)		(21.7	)
Translation difference		(1.8	)		0.0			(2.0	)		(1.1	)		4.1			(1.8	)		4.5			(2.0	)
Reserve at end of the period	$	50.8		$	32.5		$	50.8		$	32.5		$	122.9		$	50.8		$	122.9		$	50.8

The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability and warranty issues. For further explanation, see Note ~~12.~~9. Contingent Liabilities below.

For the three and nine month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, provisions and cash paid primarily relate to recall and warranty related issues. The decrease in the reserve balance as of September 30, ~~2019~~2020 compared to the ~~prior~~beginning of the year was mainly due to cash payments.

Pursuant to the ~~Spin-Off Agreements,~~agreements entered into in connection with the spin-off of Veoneer, Inc. on June 29, 2018 (collectively, the “Spin-off Agreements”), Autoliv is ~~also~~ required to indemnify Veoneer for recalls related to certain qualified Electronics products. At September 30, ~~2019,~~2020, the indemnification liabilities are approximately $9$5 million included within Accrued expenses ~~on the Condensed Consolidated Balance Sheets. Insurance receivables are included within Other current assets and Investments and other non-current assets~~ on the Condensed Consolidated Balance Sheets.

The table below summarizes the change in the balance sheet position of the product-related liabilities ~~related to the continuing operations~~ (dollars in millions).

~~The Company’s most significant defined benefit plan is the Autoliv ASP, Inc. Pension Plan for which the benefits~~ Insurance receivables are ~~based~~included within Other current assets and Investments and other non-current assets on an average of the employee’s earnings in the years preceding retirement and on credited service. This plan is closed for employees hired after December 31, 2003. In December 2017, the Company decided to amend the U.S. defined pension plan, communicating a benefits freeze that will begin on December 31, 2021.

For the Company’s non-U.S. defined benefit plans the most significant individual plan resides in the U.K. The Company has closed participation in the U.K. defined benefit plan to exclude all employees hired after April 30, 2003 with few members accruing benefits.

~~The Net Periodic Benefit Costs from continuing operations related to Other Post-retirement Benefits were not significant to~~ the Condensed Consolidated ~~Financial Statements of the Company for the three and nine months ended September 30, 2019 and September 30, 2018 and are not included in the table below.~~Balance Sheets.

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

	Three months ended						Nine months ended						Three months ended September 30						Nine months ended September 30
	September 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018			2020			2019			2020			2019
Service cost	$	4.5		$	4.9		$	13.5		$	14.8		$	4.3		$	4.5		$	14.8		$	13.5
Interest cost		5.1			4.6			15.4			13.9			4.4			5.1			13.9			15.4
Expected return on plan assets		(3.9	)		(5.6	)		(11.6	)		(16.8	)		(4.6	)		(3.9	)		(13.5	)		(11.6	)
Amortization of prior service cost		0.1			0.1			0.3			0.2
Amortization of prior service (credit) cost														(0.4	)		0.1			(1.3	)		0.3
Amortization of actuarial loss		0.6			0.8			1.8			2.5			1.4			0.6			3.7			1.8
Settlement loss														4.2			—			4.2			—
Net Periodic Benefit Cost	$	6.4		$	4.8		$	19.4		$	14.6		$	9.3		$	6.4		$	21.8		$	19.4

The settlement loss in the third quarter of 2020 relates to the US qualified pension plan and was triggered by lump-sum payments for the nine month period ended September 30, 2020 in excess of the total of annual service costs and interest costs. The Service cost and Amortization of prior service cost components in the table above are reported ~~among other employee compensation costs~~in Operating Income in the Consolidated Statements of Income. The remaining components - Interest cost, Expected return on plan assets, ~~and~~ Amortization of actuarial loss and Settlement loss - are reported as Other non-operating items, net in the Consolidated Statements of Income.

The decrease in expected return on plan assets for the three and nine months ended September 30, 2019 compared to the same periods of the previous year is due to a lower assumed long-term rate of return on mainly the U.S. plan assets.13

Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of losses resulting from the antitrust proceedings described below, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in the future.

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

OnIn June ~~7-9,~~ 2011, representatives of the European Commission (“EC”), the European antitrust authority, visited 2 facilities of a Company subsidiary in Germany to gather information for an investigation of anti-competitive behavior among suppliers of occupant safety systems.

OnIn November ~~22,~~ 2017, the EC concluded a discrete portion of its investigation, and ~~imposed~~in 2018 the Company paid a fine ~~on the Company~~ of €8.1 million (approximately $9.7 million) with respect to this portion of the EC’s overall ~~investigation~~investigation. while it continued the more significant portion of its investigation. The Company paid this amount during the first quarter of 2018, and had previously accrued €8.3 million (approximately $9.9 million) in 2017 with respect to this discrete portion of the investigation.

OnIn March 5, 2019, the EC completed the remaining portion of the investigation, and ~~imposed~~in 2019 the Company paid a fine ~~on the Company~~ of €179 million (approximately $203 million). In the fourth quarter of 2018, the Company had previously accrued €184 million (approximately $210 million) with respect to the remaining portion of the investigation. The difference between the actual fine and the accrual is reported in Other income (expense), net in the Consolidated statements of net income. The final payment of the actual fine was made in June 2019.

~~Civil Litigation~~: The Company is subject to civil litigation alleging anti-competitive conduct in the U.S. and Canada. As previously reported, the Company, several of its subsidiaries, and its competitors were named as defendants in a total of 19 purported antitrust class action lawsuits filed between June 2012 and June 2015. NaN of these lawsuits were filed in the U.S. and were consolidated in the Automobile Parts Antitrust Litigation, a Multi-District Litigation (MDL) proceeding in the United States District Court for the Eastern District of Michigan. Plaintiffs in the U.S. cases sought to represent 4 purported classes - direct purchasers, auto dealers, end-payors, and truck and equipment dealers - who purchased occupant safety systems or components directly from a defendant, indirectly through purchases or leases of new vehicles containing such systems, or through purchases of replacement parts.

In May 2014, the Company, without admitting any liability, entered into separate settlement agreements with the direct purchasers, auto dealers, and end-payors, which were granted final approval by the MDL court in 2015 and 2016. In April 2016, the Company entered into a settlement agreement with the truck and equipment dealers’ class, which was granted final approval by the MDL court in 2016. The class settlements do not resolve any claims of settlement class members who opt-out of the settlements or the unasserted claims of any purchasers of occupant safety systems who are not otherwise included in a settlement class, such as states and municipalities. Several individuals and 1 insurer (and its affiliated entities) opted-out of the end-payor class settlement, including the Company’s settlement.

In September 2016, the insurer (and its affiliated entities) that opted out of the end-payor class settlement filed an antitrust lawsuit in the United States District Court for the Eastern District of Michigan. ~~The Company has accrued an amount that is not material to the Company’s results of operations to resolve this issue.~~

Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage, the Company may also face product liability and other claims. There can be no assurance that the Company will not experience material warranty, recall or product (or other) liability claims or losses in the future, or that the Company will not incur significant costs to defend against such claims. The Company may be required to participate in a recall involving its products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating to its suppliers. As suppliers become more integrally involved in the vehicle design process and assume more of the vehicle assembly functions, vehicle manufacturers are increasingly looking to their suppliers for contribution when faced with recalls and product liability claims. Government safety regulators may also play a role in warranty and recall practices. A warranty, recall or product-liability claim brought against the Company in excess of its insurance may have a material adverse effect on the Company’s business. Vehicle manufacturers are also increasingly requiring their outside suppliers to guarantee or warrant their products and bear the costs of repair and replacement of such products under new vehicle warranties. A vehicle manufacturer may attempt to hold the Company responsible for some, or all, of the repair or replacement costs of products when the product supplied did not perform as represented by us or expected by the customer. Accordingly, the future costs of warranty claims by the customers may be material. However, the Company believes its established reserves are adequate. Autoliv’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle future and existing claims. The Company regularly evaluates the adequacy of these reserves, and adjusts them when appropriate. However, the final amounts actually due related to these matters could differ materially from the Company’s recorded estimates.

In addition, as vehicle manufacturers increasingly use global platforms and procedures, quality performance evaluations are also conducted on a global basis. Any one or more quality, warranty or other recall issue(s) (including those affecting few units and/or having a small financial impact) may cause a vehicle manufacturer to implement measures such as a temporary or prolonged suspension of new orders, which may have a material impact on the Company’s results of operations.

The Company carries insurance for potential recall and product liability claims at coverage levels based on our prior claims experience. In addition, a number of the agreements entered into by the Company, including the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance.

Toyota Recall: On June 29, 2016, the Company announced that it is cooperating with Toyota Motor Corp. in its recall of approximately 1.4 million vehicles equipped with a certain model of the Company’s side curtain airbag (the “Toyota Recall”). The Company continues to cooperate with Toyota ~~has informed~~regarding the Company that there have been 8 reported incidents where a side curtain airbag has partially inflated without a deployment signal from the airbag control unit. The incidents have all occurred in parked, unoccupied vehicles and no personal injuries have been reported. The root cause analysis of the issue is ongoing. However, at this point in time the Company believes that a compromised manufacturing process at a sub-supplier may be a contributing factor and, as no incidents have been confirmed in vehicles produced by other OEMs with the same inflator produced during the same period as those recalled by Toyota, that vehicle-specific characteristics may also contribute to the issue. The sub-supplier’s manufacturing process was changed in January 2012, and the vehicles now recalled by Toyota represent more than half of all inflatorsroot cause of the ~~relevant type manufactured before~~issue and potential liability and indemnification obligations of the ~~sub-supplier process was changed.~~

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company determined pursuant to ASC 450 that a loss with respect to this issue is reasonably possible.parties. If the Company is obligated to indemnify Toyota for any of the costs associated with the Toyota Recall, the Company expects that its insurance will generally cover such costs and ~~liabilities~~liabilities. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered.

The Company has determined pursuant to ASC 450 that a loss with respect to this issue is probable and ~~estimates~~therefore has accrued an immaterial amount related to potential costs for replacement parts. The ultimate costs to the Company of the Toyota Recall could be materially different from the amount the Company has accrued. However, the Company continues to believe that the Company’s loss, net of expected insurance recoveries, ~~would~~will be less than $20 million. ~~However, the ultimate costs of the Toyota Recall could be materially different.~~ The main variables affecting the ultimate cost for the Company ~~are:~~include: the determination of proportionate responsibility (if any) among Toyota, the Company, and any relevant sub-suppliers; the ultimate number of vehicles repaired; the cost of repair per vehicle; and the actual recoveries from sub-suppliers and insurers. ~~The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered.~~

Intellectual Property:In its products, the Company utilizes technologies which may be subject to intellectual property rights of third parties. While the Company does seek to procure the necessary rights to utilize intellectual property rights associated with its products, it may fail to do so. Where the Company so fails, the Company may be exposed to material claims from the owners of such rights. Where the Company has sold products which infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material.

The table in Note ~~10.~~7. Product-Related Liabilities above summarizes the change in the balance sheet position of the product related liabilities.

Eligible employees and non-employee directors of the Company participate in the Autoliv, Inc.1997 Stock Incentive Plan, ~~(the Plan)~~as amended and received Autoliv stock-based awards which include stock options (SOs), restricted stock units (RSUs) and performance shares (PSs). ~~In connection with~~

For the ~~Veoneer spin-off, each outstanding Autoliv stock-based award as of June 29, 2018 (the Distribution Date) was converted to a stock award that has underlying shares of both Autoliv~~three and ~~Veoneer common stock. For further information about~~nine month periods ended September 30, 2020, the ~~conversion, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.~~

~~The~~ Company recorded approximately $2$3.0 million and ~~$5.6~~$7.1 million, ofrespectively, in stock-based compensation expense ~~in continuing operations~~ related to RSUs and ~~PSs for~~PSs. During the three and nine month periods ended September 30, 2019, ~~respectively.~~ the Company recorded $2.0 million and $5.6 million, respectively, of stock-based compensation expense related to RSUs and PSs.

During the three month periods ended September 30, 2020 and September 30, 2019, approximately 6 thousand and 2 thousand shares of common stock from the treasury stock, respectively, were utilized by the Plan. During the nine month periods ended September 30, ~~2018,~~2020 and September 30, 2019, approximately 92 thousand and 90 thousand shares of common stock from the ~~Company recorded $2.3 million and $6.9 million, respectively, of stock-based compensation expense in continuing operations related to RSUs and PSs.~~treasury stock were utilized by the Plan.

For the three month ~~period~~periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019, approximately ~~50 thousand~~0.0 million and ~~0 thousand shares,~~0.1 million awards, respectively, were excluded from the computation of the diluted EPS, since the inclusion of these awards would be antidilutive. For the nine month period ended September 30, ~~2019 and~~2020, shares in the diluted loss per share calculation represent basic shares due to the net loss. For the nine month period ended September 30, ~~2018,~~2019, approximately ~~54 thousand and 0 thousand shares, respectively,~~0.1 million awards were excluded from the computation of the diluted ~~EPS.~~EPS, since the inclusion of these awards would be antidilutive.

During the three month period ended September 30, 2019 and September 30, 2018 approximately 2 thousand and 9 thousand shares of common stock from the treasury stock, respectively, were utilized by the Plan. During the nine month period ended September 30, 2019 and September 30, 2018 approximately 90 thousand and 175 thousand shares of common stock from the treasury stock, respectively, were utilized by the Plan.

The computation of basic and diluted EPS under the two-class method ~~were~~was as follows:

(In millions, except per share amounts)

Three months ended

Nine months ended

September 30,
2019

September 30,
2018

September 30,
2019

September 30,
2018

Numerator:

Basic and diluted:

Net income from continuing operations

$
85.4

$
117.5

$
305.9

$
468.9

Net loss from discontinued operations

—

—

—

(187.5
)
Net income attributable to controlling
   interest

85.4

117.5

305.9

281.4

Participating share awards with dividend
   equivalent rights

0.0

0.0

0.0

0.0

Net income available to common shareholders

85.4

117.5

305.9

281.4

Earnings allocated to participating share
   awards¹⁾

0.0

0.0

0.0

0.0

Net income attributable to common
   shareholders

$
85.4

$
117.5

$
305.9

$
281.4

Denominator: ¹⁾

Basic: Weighted average common stock

87.2

87.1

87.2

87.1

Add: Weighted average stock options/share
   awards

0.1

0.3

0.2

0.2

Diluted:

87.3

87.4

87.4

87.3

Basic EPS:

Continuing operations

$
0.98

$
1.35

$
3.51

$
5.38

Discontinued operations

$
—

$
—

$
—

$
(2.15
)
Basic EPS

$
0.98

$
1.35

$
3.51

$
3.23

Diluted EPS:

Continuing operations

$
0.98

$
1.34

$
3.50

$
5.37

Discontinued operations

$
—

$
—

$
—

$
(2.15
)
Diluted EPS

$
0.98

$
1.34

$
3.50

$
3.22

	Three months ended September 30				Nine months ended September 30
(In millions, except per share amounts)	2020		2019		2020			2019
Numerator:
Basic and diluted:
Net income attributable to controlling interest	$	98.3	$	85.4	$	(1.6	)	$	305.9
Participating share awards with dividend equivalent rights	-		-		-			-
Net income applicable to common shareholders		98.3		85.4		(1.6	)		305.9
Earnings allocated to participating share awards¹⁾		0.0		0.0		0.0			0.0
Net income attributable to common shareholders	$	98.3	$	85.4	$	(1.6	)	$	305.9
Denominator: ¹⁾
Basic: Weighted average common stock		87.3		87.2		87.3			87.2
Add: Weighted average stock options/ share awards		0.2		0.1		0.0			0.2
Diluted: ²⁾		87.5		87.3		87.3			87.4

Net earnings (loss) per share - basic	$	1.13	$	0.98	$	(0.02	)	$	3.51

Net earnings (loss) per share - diluted²⁾	$	1.12	$	0.98	$	(0.02	)	$	3.50

~~Throughout the periods covered by the unaudited condensed consolidated financial statements, Autoliv purchased~~

The Company purchases finished goods from Veoneer. ~~Related party purchases from Veoneer amounted to approximately $17 million and $30 million for~~For the three month periods ended September 30, ~~2019~~2020 and September 30, ~~2018, respectively, and~~2019, related party purchases from Veoneer amounted to ~~approximately $54~~$19 million and ~~$73~~$17 million, ~~for~~respectively. For the nine month periods ended September 30, ~~2019~~2020 and September 30, ~~2018,~~2019 related party purchases from Veoneer amounted to $48 million and $54 million, respectively.

~~Autoliv also subleases certain office space to Veoneer. However, related party sublease income from Veoneer is not material for the three months ended September 30, 2019.~~

Amounts due to and due from related ~~parties are summarized~~party as of September 30, 2020 and December 31, 2019, were as follows:

The Company’s disaggregated revenue for the three and nine month periods ended September 30, 2020 and September 30, 2019, were as follows.

Contract assets relate to the Company's rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts and is included in Other current assets in the ~~below table:~~Condensed Consolidated Balance Sheet. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. The net change in the contract assets balance, reflecting the adjustments needed to align revenue recognition for work completed but not billed, for the three and nine month periods ended September 30, 2020 and September 30, 2019 were not material.

~~Related party receivables primarily relate to an agreement between Autoliv and Veoneer.~~

The related party payables are mainly driven by Reseller Agreements put in place in connection with the spin-off. The Reseller Agreements are between Autoliv and Veoneer to facilitate the temporary arrangement of the sale of Veoneer products in the interim period post spin-off. For further information, see Note 3. Discontinued Operations above.

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

The following discussion and analysis should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the United States Securities and Exchange Commission (the “SEC”) on February 21, ~~2019.~~2020. Unless otherwise noted, all dollar amounts are in millions.

Autoliv, Inc. (“Autoliv” or the “Company”) is a Delaware corporation with its principal executive offices in Stockholm, Sweden. ~~It was created in 1997 from the merger of Autoliv AB (“AAB”) and the automotive safety products business of Morton International, Inc.~~ The Company functions as a holding corporation and owns two principal operating subsidiaries, ~~AAB~~Autoliv AB and Autoliv ASP, Inc.

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

On June 29, 2018 (the “Distribution Date”), Autoliv completed the spin-off of its former Electronics segment (the “spin-off”) through the distribution of all of the issued and outstanding stock of Veoneer, Inc. (“Veoneer”). To effect the spin-off, Autoliv distributed to each Autoliv stockholder one share of Veoneer common stock, par value $1.00 per share, for every one share of Autoliv common stock, par value $1.00 per share, held by such person on the common stock record date, and each Autoliv Swedish Depository Receipt (SDR) holder received one Veoneer SDR for each Autoliv SDR held by such person on the applicable SDR record date. On July 2, 2018, Veoneer’s common stock began regular-way trading on the New York Stock Exchange under the symbol “VNE” and its SDRs began trading on Nasdaq Stockholm under the symbol “VNE SDB.” The Company did not retain any equity interest in Veoneer.

In accordance with U.S. GAAP, the financial position and results of operations of the Electronics business are presented as discontinued operations and, as such, have been excluded from continuing operations for all prior periods presented. The sum of the individual earnings per share amounts from continuing operations and discontinued operations may not equal the total company earnings per share amounts due to rounding. The cash flows and comprehensive income related to the Electronics business have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for all prior periods presented. Upon completion of the spin-off, Autoliv concluded that it has one reportable segment, based on the way the Company currently evaluates its financial performance and manages its operations. The Company will re-evaluate the one reportable segment as the operating model evolves, including the management structure. See Note 3 - Discontinued Operations below for additional information regarding discontinued operations.

On April 1, 2018, in preparation for the spin-off, pursuant to the terms of a master transfer agreement entered into between Autoliv and Veoneer, assets related to the Electronics business were transferred to, and liabilities related to the Electronics business were retained or assumed by Veoneer, however, responsibility for certain product, warranty and recall liabilities for Electronics products manufactured prior to April 1, 2018 was retained by Autoliv as provided in the distribution agreement between Autoliv and Veoneer.

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

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

The Company is proud of the way it handled the COVID-19 crisis. The worst demand decline on record in the second quarter was followed by a faster than expected recovery in the third quarter, with its challenges of managing the supply chain in a safe and efficient way. The quarter started weak and volatile but gradually grew stronger and more stable and the Company managed to record higher sales, higher profits and higher cash flow compared to the third quarter 2019. The third quarter outcome reflects the Company’s efforts to come out of the crisis as a stronger company. The adjusted operating margin was the second highest for a third quarter in the past 10 years, the operating cash flow and free cash flow are the highest the Company has recorded in a third quarter and the Company’s net debt is the lowest since the spin-off of Veoneer. The strong performance was a result of good operational execution, effects of the Company’s Structural Efficiency Programs and crisis management in the second quarter leading to cost reductions which, although of a more temporary nature, still supported the Company’s third quarter performance.

The Company’s sales outperformed organically (non-U.S. GAAP measure) the global light vehicle production by almost 5%, with outperformance in all major regions. Backed by recent product launches, the Company expects a further pick up of outperformance in the fourth quarter, supporting a full year outperformance of around 6pp. As expected, order intake activity was slow in the third quarter, but the Company expects a very busy fourth quarter.

Although it is important to realize that the COVID-19 crisis is not behind us, and global uncertainty persists, business stability and visibility have nevertheless improved, which allows the Company to provide a full year guidance.

The Company’s Structural Efficiency Programs are on track and delivering savings. As part of the Company’s footprint optimization ambitions, the Company decided to close one plant in Germany and the Company will continue with further footprint optimization. With the health and safety of Autoliv employees as the Company’s first priority, the Company continues with more activities to further improve efficiency, optimizing the Company’s footprint and implementing the strategic initiatives outlined last year to support next year being a solid stepping stone on the journey to the Company’s 2022-24 targets.

~~1.2%~~0.4% organic sales growth ~~(non-U.S.~~(Non-U.S. GAAP measure, see reconciliation table below)

~~9.0%~~10.1% adjusted operating margin ~~(non-U.S.~~(Non-U.S. GAAP ~~measure, see reconciliation table below)~~measure)

$~~1.30~~1.48 adjusted EPS (Non-U.S. GAAP measure) - ~~a decline~~an increase of ~~4% (non-U.S. GAAP measure, see reconciliation table below)~~$0.18

The ~~Company experienced continued challenging market conditions~~COVID-19 pandemic had a substantial impact on the Company’s operations in the ~~quarter. Although~~first quarter, particularly in China, where most of its customers’ plants were closed for several weeks in February and operated at low levels in March. In Europe and North America, sales declined substantially in the ~~rate~~second half of ~~decline~~March as the pandemic led to customer plant closures. A large number of customer plants were closed in April and parts of May, followed by a ramp-up in June. According to IHS, global light vehicle production ~~slowed down slightly, uncertainty remains high, market outlook~~(LVP) declined by ~~IHS continues to be revised down~~24% in the first nine months of 2020 vs. the same period the prior year. The decline in global LVP and the slow and volatile restart and ramp-up had a significant impact on the Company’s sales and profitability in the first six months of 2020 while it managed to achieve improvements in sales, profitability and cash flow in the third quarter as its cost reduction initiatives and positive sales development more than offset the 4% global LVP decline in the third quarter.

During the first six months of 2020, Autoliv undertook a number of actions to support employee health and safety, corporate liquidity, cash flow and profitability. Actions included introducing a Smart Start Playbook for safe re-start and ramp-up, investing in employee safety equipment and re-designing production lines and work places as necessary. Other initiatives included drawing on the Revolving Credit Facility (which is now fully repaid), withdrawing full year guidance (now provided again), extensive use of furloughing (very limited use today), reducing headcount, sharply reducing capital expenditures, close monitoring of working capital, reducing or suspending discretionary spending and accelerated cost savings initiatives, cancelling the dividend and suspending future dividends, although the Board of Directors will review such suspension on a quarterly basis. Direct COVID-19 related costs, such as personal protective equipment, temporary supplier support and premium freight, were around $10 million in the second quarter and around $5 million in the third quarter. Support from governments in connection with furloughing, short-term work weeks and similar activities was around $25 million in the second quarter and around $10 million in the third quarter.

In all regions, the automotive industry, including Autoliv, are in different stages of ramp-up of operations. Visibility and predictability of customer demand has improved but is still limited, particularly regarding the sustainability of current demand levels, including the effects on LVP of inventory build-ups, government vehicle subsidies and the risks of another wave of COVID-19 infections in one or more of the regions where the Company ~~does not see~~operates or has customers or suppliers.

While we continue to focus on health and safety and cost optimization, we are ramping up production in coordination with our customers and suppliers. Below is a ~~turnaround~~summary of our current view of our three most important regions.

China: LVP was above pre-crisis production levels in the second and third quarter. IHS forecasting 5% year-over-year decline in LVP in the ~~near term.~~fourth quarter, the decrease mainly a result of high LVP in Q4 2019.

~~The Company continued~~Europe: LVP development has improved gradually from second quarter’s year-over-year decline of 60% to ~~outperform light vehicle production, growing organically (non-U.S. GAAP measure) about 4.6pp more than LVP~~a 8% decline in the third quarter ~~driven mainly by strong development in China and Americas.~~

The Company’s business cycle management actions are taking effect and the adjusted operating margin (non-U.S. GAAP measure) decline year over year was substantially less than in recent quarters, and it improved sequentially. LVP has continuedaccording to ~~slide however, and the Company now assumes 6-7% global LVP decline for 2019,~~IHS, which ~~moderates the Company’s outlook to~~forecasts around 1% ~~for organic sales growth and to around 9% for adjusted operating margin.~~

~~Although the Company is not pleased with this profit level, it is achieved~~year-over-year decline in LVP in the ~~context~~fourth quarter.

North America: LVP development has improved gradually from second quarter’s year-over-year decline of ~~LVP expectations declining by 7-8pp in just 9 months. The cost improvement actions which enabled this performance will continue relentlessly.~~

~~The Company reduced its workforce by an additional 800~~68% to unchanged in the third quarter ~~or by 1,600 compared~~according to a year ago, despite growing its sales organically (non-U.S. GAAP measure) by 1.2%. The Company’s program to reduce indirect labor costs by 5% is developing as planned and the Company expects it to impact its cost base meaningfully as ofIHS, which forecasts around 1% year-over-year decline in LVP in the fourth ~~quarter 2019.~~

~~In addition to LVP and raw material headwinds, the strike at General Motors~~quarter. Inventory levels are still low in North ~~America is also affecting the Company’s sales.~~

Being close to its customers supports the Company’s short- and long-term business opportunities and this quarter the Company announced two new customer collaborations - the North American road safety research lab together with Great Wall Motor and the next generation passenger airbag in cooperation with Honda. The Company’s order intake share remained on a good level in the quarter, supporting a prolonged sales growth outperformance.

~~As always, it is of utmost importance to focus on quality and execution to secure a strong long-term performance for the Company.~~America.

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

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

The results herein present the performance of Autoliv giving effect to the spin-off of Veoneer, Autoliv’s former Electronics segment, on June 29, 2018. Historical financial results of Veoneer are reflected as discontinued operations, with the exception of cash flows, which are presented on a consolidated basis of both continuing and discontinued operations and net income attributable to a controlling interest (Consolidated Autoliv). The focus of management’s discussion and analysis below is on continuing operations. Certain key ratios, as indicated, only reflect continuing operations. The restated historical financial information reflecting the spin-off are unaudited, but have been derived from Autoliv’s historical audited annual reports.

	Three months ended				Nine months ended				Three months ended				Nine months ended
	or as of September 30				or as of September 30				or as of September 30				or as of September 30
	2019		2018		2019		2018		2020		2019		2020		2019
Total parent shareholders’ equity per share	$	22.78	$	23.42	$	22.78	$	23.42	$	24.05	$	22.78	$	24.05	$	22.78
Capital employed ¹⁾		3,781		3,778		3,781		3,778		3,686		3,781		3,686		3,781
Net debt ²⁾		1,781		1,724		1,781		1,724		1,573		1,781		1,573		1,781

Operating working capital²⁾		620		759		620		759		379		620		379		620
Operating working capital relative to sales, % ¹⁰⁾		7.2		8.8		7.2		8.8		5.3		7.2		5.3		7.2

Gross margin, % ³⁾		18.7		19.0		18.2		19.8		19.6		18.7		15.1		18.2
Operating margin, % ⁴⁾		7.6		9.5		7.8		10.3		8.6		7.6		1.5		7.8

Return on total equity, % ⁵⁾		17.1		23.2		20.7		20.0		19.4		17.1		0.0		20.7
Return on capital employed, % ⁶⁾		16.2		20.4		18.0		20.9		18.7		16.2		2.7		18.0

Headcount at period-end ⁷⁾		64,868		66,479		64,868		66,479		65,300		64,900		65,300		64,900

Days receivables outstanding ⁸⁾		75		80		72		76		73		75		90		72
Days inventory outstanding ⁹⁾		37		38		35		35		36		37		45		35

THREE MONTHS ENDED SEPTEMBER 30, ~~2019~~2020 COMPARED WITH THREE MONTHS ENDED ~~SEPTEMBER~~SEPEMBER 30, ~~2018~~2019

	Third quarter							Components of change in net sales						Three months ended September 30							Components of change in net sales
	2019		2018		Reported change			Currency effects ¹⁾			Organic ³⁾			2020		2019		Reported change			Currency effects ¹⁾			Organic ³⁾
Airbags and other ²⁾	$	1,349.3	$	1,357.4		(0.6	)%		(1.2	)%		0.6	%	$	1,331.6	$	1,349.3		(1.3	)%		(0.1	)%		(1.2	)%
Seatbelts ²⁾		678.4		675.6		0.4	%		(1.9	)%		2.3	%		705.6		678.4		4.0	%		0.3	%		3.7	%
Total	$	2,027.7	$	2,033.0		(0.3	)%		(1.5	)%		1.2	%	$	2,037.2	$	2,027.7		0.5	%		0.1	%		0.4	%

Asia	$	777.7	$	749.1		3.8	%		(0.4	)%		4.2	%	$	806.2	$	777.7		3.7	%		0.4	%		3.3	%
Whereof: China		381.7		351.9		8.5	%		(2.7	)%		11.2	%		425.2		381.7		11.4	%		1.0	%		10.4	%
Japan		202.4		196.3		3.1	%		4.2	%		(1.1	)%		180.3		202.4		(10.9	)%		0.9	%		(11.8	)%
Rest of Asia		193.6		200.9		(3.6	)%		(0.7	)%		(2.9	)%		200.7		193.6		3.7	%		(1.4	)%		5.1	%
Americas		713.1		684.8		4.1	%		(0.7	)%		4.8	%		693.3		713.1		(2.8	)%		(4.0	)%		1.2	%
Europe		536.9		599.1		(10.4	)%		(3.7	)%		(6.7	)%		537.7		536.9		0.1	%		4.9	%		(4.8	)%
Total	$	2,027.7	$	2,033.0		(0.3	)%		(1.5	)%		1.2	%	$	2,037.2	$	2,027.7		0.5	%		0.1	%		0.4	%

~~Airbag sales~~ ~~organic growth (non-U.S. GAAP measure, see reconciliation table above) was mainly driven by strong performance for driver and knee~~Sales of side airbags ~~in North America, steering wheels in Americas and passenger airbags in China. Offsetting declines came~~increased slightly, mainly from most types of side airbags in ~~Europe~~South Korea and ~~from~~inflatable curtains and chest airbags in China. Sales of frontal airbags decreased slightly, due to weak sales of passenger airbags in Japan and ASEAN. Sales of inflators, including inflator replacements, decreased by around $20 million.

Seatbelt sales organic growth (Non-U.S. GAAP measure) mainly reflects positive development with pretensioner seatbelts, especially in North America, ~~and Japan.~~

~~Seatbelt sales~~ ~~organic growth (non-U.S. GAAP measure, see reconciliation table above) was mainly driven by strong performance in~~ China and ~~to a lesser degree in Americas, partly offset by declines in~~Japan. Europe ~~and India. The trend of higher~~was the only large region with organic seatbelt sales ~~of more advanced and higher value-added seatbelt systems continued, especially in China and Rest of Asia.~~decline.

~~We grew globally~~Our global organic sales (Non-U.S. GAAP measure) increased by ~~1.2% organically (non-U.S. GAAP measure, see reconciliation table above), which is 4.6pp more than light vehicle production~~0.4% compared to the LVP decline of 4.3% (according to IHS). ~~The largest contributor to overall growth was~~Sales increased organically in China, ~~followed by North America~~Rest of Asia and ~~South America. The largest organic sales decline was~~Americas and decreased in Europe ~~followed by India, South Korea~~ and Japan. Our organic sales ~~growth~~development outperformed LVP in all major regions - by ~~around 17pp~~almost 6pp in ~~China and~~Americas, by ~~4.5pp in North America while we underperformed LVP by 7.5pp~~almost 3pp in Europe and by ~~around 8pp~~almost 2pp in ~~Japan. In South America we grew organically around 35pp more than LVP, while we outgrew LVP by around 8pp in Rest of Asia.~~

Organic growth¹⁾

Americas

Europe

China

Japan

Rest of Asia

Global

Q3 2020 Organic growth¹⁾

Americas

Europe

China

Japan

Rest of

Asia

Global

Autoliv

4.8

(6.7)

11.2

(1.1)

(2.9)

1.2

(4.8

10.4

(11.8

5.1

0.4

Main growth drivers

Honda, GM, Nissan, BMW, Tesla

VW, Renault

Honda, VW, GM

Mazda, Honda, Subaru

Mitsubishi, Renault, Nissan

Honda, VW, GM

Tesla, Toyota, VW

PSA, Toyota

GM, VW, Honda

Suzuki, Toyota, Honda

Hyundai/Kia, GM, Tata

Toyota, Tesla, GM, VW

Main decline drivers

Daimler, Hyundai/Kia

Daimler, JLR, BMW, Toyota

Geely, Ford, PSA

Mitsubishi, Toyota, Inflators

Hyundai/Kia, Isuzu, Tata, Toyota

Daimler, Hyundai/Kia, Toyota

Inflators, Nissan, FCA

Daimler, Renault, BMW

Daimler, Nissan, Mitsubishi

Mitsubishi, Nissan, Mazda

Mitsubishi, Toyota

Mitsubishi, Nissan, Daimler, Inflators

	Americas			Europe			China			Japan			Rest of Asia			Global			Americas			Europe			China			Japan			Rest of Asia			Global
LVP¹⁾		(1.6	)%		0.8	%		(5.6	)%		6.8	%		(10.5	)%		(3.4	)%		(4.3	)%		(7.6	)%		8.7	%		(11.8	)%		(16.8	)%		(4.3	)%

¹⁾ Source: IHS October 2019.
¹⁾ Source: IHS October 2020.

	Three months ended									Three months ended September 30
(Dollars in millions, except per share data)	September 30, 2019			September 30, 2018			Change			2020			2019			Change
Net Sales	$	2,027.7		$	2,033.0			(0.3	)%	$	2,037.2		$	2,027.7			0.5	%
Gross profit		379.1			386.1			(1.8	)%		399.7			379.1			5.4	%
% of sales		18.7	%		19.0	%		(0.3	)pp		19.6	%		18.7	%		0.9	pp
S, G&A		(97.7	)		(90.0	)		8.6	%		(91.7	)		(97.7	)		(6.1	)%
% of sales		(4.8	)%		(4.4	)%		0.4	pp		(4.5	)%		(4.8	)%		(0.3	)pp
R, D&E, net		(99.1	)		(101.9	)		(2.7	)%		(101.6	)		(99.1	)		2.5	%
% of sales		(4.9	)%		(5.0	)%		(0.1	)pp		(5.0	)%		(4.9	)%		0.1	pp
Amortization of Intangibles											(2.4	)		(2.9	)		(17.2	)%
Other income (expense), net		(25.6	)		1.1		n/a				(29.5	)		(25.6	)		15.2	%
Operating income		153.8			192.5			(20.1	)%		174.5			153.8			13.5	%
% of sales		7.6	%		9.5	%		(1.9	)pp		8.6	%		7.6	%		1.0	pp
Adjusted operating income¹⁾		182.5			193.6			(5.7	)%		205.6			182.5			12.7	%
% of sales		9.0	%		9.5	%		(0.5	)pp		10.1	%		9.0	%		1.1	pp
Financial and non-operating items, net		(19.4	)		(21.2	)		(8.5	)%		(26.0	)		(19.4	)		34.0	%
Income before taxes		134.4			171.3			(21.5	)%		148.5			134.4			10.5	%
Tax rate		36.0	%		31.1	%		4.9	pp		33.5	%		36.0	%		(2.5	)pp
Net income from continuing operations		86.0			118.0			(27.1	)%
Earnings per share from continuing operations, diluted²⁾		0.98			1.34			(26.9	)%
Net income											98.8			86.0			14.9	%
Earnings per share, diluted²⁾											1.12			0.98			14.3	%
Adjusted earnings per share, diluted^1),2)		1.30			1.35			(3.7	)%		1.48			1.30			13.8	%

Gross profit ~~declined~~increased by $7$21 million and the gross margin ~~declined~~increased by ~~0.3pp~~0.9pp compared to the same quarter ~~2018.~~2019. The gross margin increase was ~~adversely impacted~~primarily driven by ~~the decline in global light vehicle production, resulting in a lower utilization of our production assets,~~labor and raw material headwinds. This was offset to some degree by organic growth (non-U.S. GAAP measure) from launches of new products, which have a lower margin contribution in the early phase of the ramp-up.direct materiel productivity.

S,G&A ~~increased~~declined by $8$6 million, ~~mainly driven by bonus accrual reversals prior year and a mix of minor expense items incurred in the current quarter.~~

~~R,D&E, net~~ ~~was close~~or 6%, compared to ~~unchanged in USD terms as well as in percent of sales.~~

~~Other income (expense), net~~ ~~of negative $26 million was $27 million lower than in~~ the prior year, mainly due to ~~accruals~~lower costs for personnel, including consultants.

R,D&E, net costs increased by $3 million compared to the prior year, as reduced personnel costs was more than offset by negative effect from lower engineering income and miscellaneous items.

Other income (expense), net was negative $30 million, mainly relating to ~~future reductions of our indirect workforce.~~restructuring activities in Europe.

Operating income ~~decreased~~increased by ~~$39~~$21 million compared to the same period in 2019, as a consequence of the ~~declines~~higher gross profit and lower costs for S,G&A being partly offset by higher costs in ~~other~~Other income (expense), net and ~~gross profit.~~R,D&E, net.

Adjusted operating income ~~(non-U.S.~~(Non-U.S. GAAP ~~measure, see reconciliation table below) decreased~~measure) increased by ~~$11~~$23 million compared to the prior year, mainly due to the higher gross profit and lower ~~gross profit.~~costs for S,G&A being partly offset by higher costs for R,D&E, net.

Financial and non-operating items, net ~~was close~~costs were $7 million higher vs. Q3 2019, mainly as a result of higher interest expense due to ~~unchanged at $19~~higher debt and higher pension related expenses.

~~Income before taxes~~ ~~decreased by $37 million,~~year, mainly ~~as a consequence of~~due to the ~~lower~~higher operating income.

~~Effective tax~~Tax rate ofwas 33.5%, compared to 36.0% ~~was 4.9 pp higher than~~in the same quarter last year, ~~primarily due to costs accrued in the quarter related to the indirect workforce reduction program that are not fully~~impacted by losses without tax ~~deductible.~~benefit and an unfavorable country mix.

Earnings per share, diluted ~~decreased~~increased by ~~36 cents~~$0.14 compared to a year earlier, where the main drivers were ~~31 cents~~$0.17 from higher adjusted operating income (Non-U.S. GAAP measure) and $0.06 from lower tax partly offset by $0.04 in higher capacity alignment accruals and $0.05 from higher costs for ~~capacity alignment and 8 cents from lower adjusted operating income.~~financial items.

NINE MONTHS ENDED SEPTEMBER 30, ~~2019~~2020 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, ~~2018~~2019

	Nine months							Components of change in net sales						Nine months ended September 30							Components of change in net sales
	2019		2018		Reported change			Currency effects ¹⁾			Organic ³⁾			2020		2019		Reported change			Currency effects ¹⁾			Organic ³⁾
Airbags and other ²⁾	$	4,232.7	$	4,234.9		(0.1	)%		(3.2	)%		3.1	%	$	3,187.5	$	4,232.7		(24.7	)%		(1.8	)%		(22.9	)%
Seatbelts ²⁾		2,123.7		2,250.5		(5.6	)%		(4.2	)%		(1.4	)%		1,743.1		2,123.7		(17.9	)%		(2.1	)%		(15.8	)%
Total	$	6,356.4	$	6,485.4		(2.0	)%		(3.5	)%		1.5	%	$	4,930.6	$	6,356.4		(22.4	)%		(1.9	)%		(20.5	)%

Asia	$	2,286.1	$	2,333.5		(2.0	)%		(3.2	)%		1.2	%	$	1,991.2	$	2,286.1		(12.9	)%		(1.3	)%		(11.6	)%
Whereof: China		1,061.7		1,103.5		(3.8	)%		(5.1	)%		1.3	%		989.1		1,061.7		(6.8	)%		(1.8	)%		(5.0	)%
Japan		601.6		606.4		(0.8	)%		0.4	%		(1.2	)%		487.9		601.6		(18.9	)%		1.4	%		(20.3	)%
Rest of Asia		622.8		623.6		(0.1	)%		(3.3	)%		3.2	%		514.2		622.8		(17.4	)%		(2.9	)%		(14.5	)%
Americas		2,214.2		2,034.3		8.8	%		(0.8	)%		9.6	%		1,578.9		2,214.2		(28.7	)%		(3.5	)%		(25.2	)%
Europe		1,856.1		2,117.6		(12.4	)%		(6.4	)%		(6.0	)%		1,360.5		1,856.1		(26.7	)%		(0.8	)%		(25.9	)%
Total	$	6,356.4	$	6,485.4		(2.0	)%		(3.5	)%		1.5	%	$	4,930.6	$	6,356.4		(22.4	)%		(1.9	)%		(20.5	)%

~~Airbag sales~~ ~~organic growth (non-U.S.~~Sales of all our airbag products except textiles declined organically (Non-U.S. GAAP ~~measure, see reconciliation table above) of 3.1% was mainly driven~~measure) by ~~strong performance for airbags in North America, steering wheels in Americas~~between 17% and ~~Europe, and airbags in Rest of Asia. Of the $129 million in organic growth, around 67% came from the steering wheels category with airbags contributing almost 28% of the organic growth~~58% in the first nine ~~months.~~

~~Seatbelt sales~~ ~~organic~~months of the year, reflecting the 23.9% decline ~~(non-U.S. GAAP measure, see reconciliation table above) of 1.4% was mainly driven~~in LVP. Textiles increased by ~~weaker sales in Europe, India and South Korea, partly mitigated by organic growth in China, North America, South America and Japan. The trend of higher~~51%, reflecting new sales of ~~more advanced~~textiles for manufacturing of personal protection equipment. Inflator sales declined organically (Non-U.S. GAAP measure) by around 58%.

Japan showed a slight organic seatbelt sales growth (Non-U.S. GAAP measure), while all other regions showed organic sales declines between 5% and ~~higher value-added seatbelt systems continued, especially in China and Rest of Asia, partly offset by Europe.~~

~~For the first nine months~~The global organic sales (Non-U.S. GAAP measure) decline of ~~2019 Autoliv grew~~20.5% was 3.4pp better than LVP (according to IHS). Sales declined organically ~~(non-U.S. GAAP measure, see reconciliation table above)~~in all regions. The largest organic sales decline drivers were Americas and Europe, followed by ~~1.5% against the prior corresponding period, outperforming the LVP significantly with 7.5pp during the period. The contributors to the organic growth were the Americas,~~Japan, Rest of Asia ~~mainly ASEAN,~~ and China. Our organic sales (Non-U.S. GAAP measure) development outperformed LVP in all regions - by 5.5pp in China, ~~with offsetting effects from Europe~~by 4.3pp in Americas and ~~Japan. The organic growth~~by 3.6pp in ~~the Americas was close to 10%, mainly driven by Honda, Nissan, GM, FCA and Tesla.~~Europe.

Growth in Rest of Asia was mainly driven by Suzuki in India, Honda in Thailand and India and Hyundai/Kia in South Korea, Organic growth (non-U.S. GAAP measure, see reconciliation table above) in China of 1.3% is mainly a result of strong sales to the global OEMs in the region, partly offset by domestic OEMs decreasing substantially. The growth with the GOEMs has been mainly through Honda and VW. Sales to domestic OEMs are primarily impacted by a continued headwind from Geely, Baojun and Great Wall.

~~Sales in Europe declined organically (non-U.S. GAAP measure, see reconciliation table above) by 6%. The decline is from several OEMs such as Daimler, BMW, JLR, Renault and Ford.~~

	Americas			Europe			China			Japan			Rest of Asia			Global			Americas			Europe			China			Japan			Rest of Asia			Global
LVP¹⁾		(2.8	)%		(3.8	)%		(12.1	)%		4.0	%		(5.3	)%		(6.0	)%		(29.5	)%		(29.5	)%		(10.5	)%		(21.9	)%		(31.3	)%		(23.9	)%

¹⁾ Source: IHS October 2019.
¹⁾ Source: IHS October 2020.

	Nine months ended									Nine months ended September 30
(Dollars in millions, except per share data)	September 30, 2019			September 30, 2018			Change			2020			2019			Change
Net Sales	$	6,356.4		$	6,485.4			(2.0	)%	$	4,930.6		$	6,356.4			(22.4	)%
Gross profit		1,157.6			1,286.1			(10.0	)%		745.1			1,157.6			(35.6	)%
% of sales		18.2	%		19.8	%		(1.6	)pp		15.1	%		18.2	%		(3.1	)pp
S, G&A		(300.2	)		(290.9	)		3.2	%		(283.7	)		(300.2	)		(5.5	)%
% of sales		(4.7	)%		(4.5	)%		0.2	pp		(5.8	)%		(4.7	)%		1.1	pp
R, D&E, net		(323.5	)		(327.9	)		(1.3	)%		(292.2	)		(323.5	)		(9.7	)%
% of sales		(5.1	)%		(5.1	)%		0.0	pp		(5.9	)%		(5.1	)%		0.8	pp
Amortization of Intangibles											(7.5	)		(8.6	)		(12.8	)%
Other income (expense), net		(28.8	)		6.2			564.5	%		(86.4	)		(28.8	)		200.0	%
Operating income		496.5			665.0			(25.3	)%		75.3			496.5			(84.8	)%
% of sales		7.8	%		10.3	%		(2.5	)pp		1.5	%		7.8	%		(6.3	)pp
Adjusted operating income¹⁾		532.1			668.3			(20.4	)%		170.2			532.1			(68.0	)%
% of sales		8.4	%		10.3	%		(1.9	)pp		3.5	%		8.4	%		(4.9	)pp
Financial and non-operating items, net		(57.7	)		(54.7	)		5.5	%		(62.0	)		(57.7	)		7.5	%
Income before taxes		438.8			610.3			(28.1	)%		13.3			438.8			(97.0	)%
Tax rate		30.1	%		23.0	%		7.1	pp		104.4	%		30.1	%		74.3	pp
Net income from continuing operations		306.9			470.3			(34.7	)%
Earnings per share from continuing operations, diluted²⁾		3.50			5.37			(34.8	)%
Net (loss) income											(0.6	)		306.9			(100.2	)%
(Loss) earnings per share, diluted²⁾											(0.02	)		3.50			(100.6	)%
Adjusted earnings per share, diluted^1),2)		3.87			5.40			(28.3	)%		0.95			3.87			(75.5	)%

Gross profit declined by ~~$129~~$413 million and the gross margin declined by ~~1.6pp~~3.1pp compared to the same period ~~2018.~~2019. The gross margin decline was ~~adversely impacted~~primarily driven by ~~the sharp decline in global light vehicle production resulting in a~~lower sales and lower utilization of our ~~production~~ assets from the decline in LVP. The sharp sales decline followed by a volatile restart and ramp-up with limited visibility and predictability had a significant effect on our gross margin, despite significant reductions in costs for material and labor.

R,D&E, net declined by $31 million, or by 10%, mainly due to positive year-over-year effects from lower personnel costs due to ~~a labor conflict in Mexico, raw material headwinds~~reduced headcount and elevated launch related costs. This was offset to some degree by organic growth (non-U.S. GAAP measure) from launches of new products, which have a lower margin contribution in the early phase of the ramp-up.furloughing.

Other ~~operating~~ income (expense), net~~, was $35~~ costs increased by $58 million ~~lower than the prior~~compared to a year earlier, mainly due to higher accruals ~~relating~~for restructuring activities in the first nine months of 2020 compared to a year earlier. The accruals are mainly related to future reductions of our indirect workforce.

Operating incomedecreased by ~~$169~~$421 million, mainly as a consequence of the ~~decline~~declines in gross profit and other income (expense), net, partly offset by lower costs for S,G&A and R,D&E, net.

Adjusted operating income ~~(non-U.S.~~(Non-U.S. GAAP ~~measure, see reconciliation table below)~~ measure) decreased by ~~around $136~~$362 million, mainly due to the lower gross ~~profit.~~profit, partly offset by lower costs for S,G&A and R,D&E, net.

Financial and non-operating items, net costs were $4 million higher than a year earlier, mainly due to unfavorable effects of exchange rate changes and higher pension related expenses.

Income before taxes decreased by ~~$172~~$426 million, as a consequence of lower operating income.

Tax rate was 104.4%, compared to 30.1% last year, impacted by unfavorable country mix and losses without tax benefit.

Earnings per share, diluted decreased by $3.52 where the main drivers were $2.89 from lower adjusted operating income and $0.60 from higher capacity alignment accruals.

Operating working capital (Non-U.S. GAAP measure) was 5.3% of sales compared to 7.2% of sales a year earlier, mainly as a consequence of more positive effects from accounts receivables, inventories and various accruals vs. the prior year. The Company targets that operating working capital in relation to the last 12-month sales should not exceed 10%.

Operating cash flow was $352 million, compared to $195 million a year earlier. The improvement was mainly due to more positive effects from changes in accounts payable and accrued expenses, inventories and income taxes partly offset by more negative effect from receivables and other assets vs. the prior year.

Capital expenditure, net was 38% lower than a year earlier, reflecting our efforts to reduce capital expenditure to support cash flow. Capital expenditure, net in relation to sales was 3.8% vs. 6.0% a year earlier.

Free cash flow (Non-U.S. GAAP measure) amounted to $276 million, compared to $73 million a year earlier. The increase was due to the higher operating ~~income.~~cash flow and lower capital expenditure, net.

Cash conversion (Non-U.S. GAAP measure) defined as free cash flow (Non-U.S. GAAP measure) in relation to net income, was 279%, driven by the high level of free cash flow.

Net debt (Non-U.S. GAAP measure) was $1,573 million as of September 30, 2020, which was $208 million lower than a year earlier and $265 million lower compared to June 30, 2020.

Liquidity position At September 30, 2020, the cash balance was $1.5 billion, and including committed, unused loan facilities, our liquidity position was $2.0 billion. On October 2, 2020, the Revolving Credit Facility was fully repaid through a $600 million payment. Remaining debt maturing in 2020 is $117 million, with another $275 million maturing in 2021.

Leverage ratio (Non-U.S. GAAP measure) Autoliv’s policy is to maintain a leverage ratio commensurate with a strong investment grade credit rating. The Company measures its leverage ratio as net debt (Non-U.S. GAAP measure) adjusted for pension liabilities in relation to adjusted EBITDA (Non-U.S. GAAP measure). The long-term target is to maintain a leverage ratio of around 1x within a range of 0.5x to 1.5x. As of September 30, 2020, the Company had a leverage ratio of 2.4x, compared to 1.8x at September 30, 2019 as a lower net debt was more than offset by a lower adjusted 12 month trailing EBITDA vs. a year earlier. At June 30, 2020, the leverage ratio was 2.9x.

Total equity increased by $114 million compared to September 30, 2019 mainly due to $155 million in net income and $28 million from positive foreign exchange effects, partly offset by $55 million in dividends.

Operating cash flow was $380 million compared to $328 million a year earlier. The improvement was primarily a result of ~~30.1%~~more positive effects from changes in working capital in 2020 and the EC antitrust payment of $203 million in Q2 2019, partly offset by a lower net income in 2020.

Capital expenditure, net of $229 million was ~~7.1 pp~~36% lower than a year earlier, reflecting efforts to reduce capital expenditure to support cash flow. Capital expenditure, net in relation to sales was 4.6% compared to 5.6% in the same period 2019.

Free cash flow (Non-U.S. GAAP measure) amounted to $152 million compared to $30 million negative a year earlier, where the improvement was due to the higher ~~than last year primarily because~~operating cash flow and lower capital expenditure, net.

Cash conversion (Non-U.S. GAAP measure) defined as free cash flow (Non-U.S. GAAP measure) in relation to net income, was not meaningful in the first ~~nine months of 2018~~half year as net income was ~~positively affected by the reversal of certain valuation allowances.~~

~~Earnings per share, diluted decreased by 187 cents primarily due~~close to ~~113 cents from lower operating income, 44 cents from tax items and 34 cents from costs related to capacity alignment, anti-trust matters and the separation of our business areas.~~zero.

Cash flow items for the first nine months of 2018 are presented on a consolidated basis including both Continuing and Discontinued Operations for the first six months of 2018 before the spin-off of Veoneer, except when stated otherwise.

Net cash provided by operating activities amounted to $328 million compared to $301 million for the first nine months of 2019 and 2018, respectively. The increase in cash flow from operations can mainly be attributed to that the first six months of 2018 included loss making discontinued operation activities compared to no such operations in 2019. Also, 2019 was significantly impacted by the EC antitrust payment made in the second quarter amounting to$203 million.

Net cash used in investing activities amounted to $358 million compared $494 million for the first nine months of 2019 and 2018, respectively. The first nine months of 2018 included significant activity from discontinued operations. Excluding discontinued operations, investing activities in continuing operations amounted to approximately $352 million in 2018.

Net cash used in financing activities amounted to $(230) million compared $(172) million for the first nine months of 2019 and 2018, respectively. During the first nine months of 2019 financing activities were primarily related to improving the Company’s debt maturity profile, replacing short-term debt with long-term as noted in the Contractual Obligations section below. 2018 financing activities were primarily driven by the spin-off of Veoneer.

Reconciliation of U.S. GAAP financial measures to “Adjusted operating income”, “Adjusted operating margin” and “Adjusted EPS”

	Three months ended September 30, 2019						Three months ended September 30, 2018						Three months ended September 30, 2020						Three months ended September 30, 2019
	Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP
Operating income	$	153.8	$	28.7	$	182.5	$	192.5	$	1.1	$	193.6	$	174.5	$	31.1	$	205.6	$	153.8	$	28.7	$	182.5
Operating margin, %		7.6		1.4		9.0		9.5		0.0		9.5		8.6		1.5		10.1		7.6		1.4		9.0
EPS continuing operations, diluted		0.98		0.32		1.30		1.34		0.01		1.35
Earnings per share, diluted														1.12		0.36		1.48		0.98		0.32		1.30

	Nine months ended September 30, 2019						Nine months ended September 30, 2018						Nine months ended September 30, 2020							Nine months ended September 30, 2019
	Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP			Adjustments¹⁾		Non-U.S. GAAP		Reported U.S. GAAP		Adjustments¹⁾		Non-U.S. GAAP
Operating income	$	496.5	$	35.6	$	532.1	$	665.0	$	3.3	$	668.3	$	75.3		$	94.9	$	170.2	$	496.5	$	35.6	$	532.1
Operating margin, %		7.8		0.6		8.4		10.3		0.0		10.3		1.5			2.0		3.5		7.8		0.6		8.4
EPS continuing operations, diluted		3.50		0.37		3.87		5.37		0.03		5.40
(Loss) earnings per share, diluted														(0.02	)		0.97		0.95		3.50		0.37		3.87

	Third quarter 2019					Third quarter 2018						Three months ended September 30, 2020				Three months ended September 30, 2019
	Millions			Per share		Millions			Per share			Millions		Per share		Millions			Per share
Capacity alignment	$	27.4		$	0.31	$	(0.2	)	$	(0.00	)	$	30.9	$	0.36	$	27.4		$	0.31
Antitrust related matters	0.1				0.00	0.2				0.00			0.2		0.00		0.1			0.00
Separation costs	$	1.2		0.01			1.1		0.01				–		–		1.2			0.01
Total adjustments to operating income	$	28.7			0.32	$	1.1			0.01		$	31.1	$	0.36	$	28.7		$	0.32
Tax on non-U.S. GAAP adjustments¹⁾		(0.4	)		0.00		(0.3	)		(0.00	)		0.0		0.00		(0.4	)		0.00
Total adjustments to net income	$	28.3		$	0.32	$	0.8		$	0.01			31.1		0.36		28.3			0.32

	First nine months of 2019						First nine months of 2018						Nine months ended September 30, 2020						Nine months ended September 30, 2019
	Millions			Per share			Millions			Per share			Millions			Per share			Millions			Per share
Capacity alignment	$	40.5		$	0.46		$	1.0		$	0.01		$	94.4		$	1.08		$	40.5		$	0.46
Antitrust related matters		(6.1	)		(0.07	)	1.2			0.01				0.5			0.01			(6.1	)		(0.07	)
Separation costs		1.2			0.01		1.1			0.01
Separation Costs														–			–			1.2			0.01
Total adjustments to operating income	$	35.6		$	0.40		$	3.3		$	0.03			94.9			1.09			35.6			0.40
Tax on non-U.S. GAAP adjustments¹⁾		(3.0	)		(0.03	)		(0.7	)		(0.00	)		(9.9	)		(0.12	)		(3.0	)		(0.03	)
Total adjustments to net income	$	32.6		$	0.37		$	2.6		$	0.03		$	85.0		$	0.97		$	32.6		$	0.37

The non-GAAP adjustment for the three months ended September 30, 2019 primarily consisted of capacity alignment amounting to $27.4 million. The non-GAAP adjustment for the nine months ended September 30, 2019 primarily consisted of capacity alignment amounting to $40.5 million offset by the $6.7 million antitrust accrual adjustment as reported in the Company’s 10-Q for the period ended March 31, 2019.

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

Reconciliation of U.S. GAAP financial measure to “Operating working capital”

	September 30, 2019			September 30, 2018			December 31, 2018			September 30, 2020			September 30, 2019			December 31, 2019
Total current assets continuing operations	$	2,908.8		$	3,348.1		$	3,285.4
Total current liabilities continuing operations ¹⁾		(2,304.8	)		(2,683.8	)		(2,655.5	)
Total current assets										$	4,036.5		$	2,908.8		$	3,002.1
Total current liabilities											(3,221.3	)		(2,304.8	)		(2,410.2	)
Working capital		604.0			664.3			629.9			815.2			604.0			591.9
Cash and cash equivalents		(334.4	)		(533.7	)		(615.8	)		(1,476.5	)		(334.4	)		(444.7	)
Short-term debt		289.9			573.0			620.7			1,025.5			289.9			368.1
Derivative (asset) and liability, current		5.9			1.8			(0.8	)		15.1			5.9			(4.2	)
Dividends payable		54.1			54.0			54.0
Dividends payable ¹⁾											–			54.1			54.1
Operating working capital	$	619.5		$	759.4		$	688.0		$	379.3		$	619.5		$	565.2

~~Operating working capital~~ (non-U.S. GAAP measure, see reconciliation table above) was 7.2% of sales compared to 8.8% of sales a year earlier, where the change mainly was a consequence of a new accounting standard for operating leases and accruals related to future reductions of our indirect workforce. The Company targets that operating working capital in relation to the last 12-month sales should not exceed 10%.

Creditors and credit rating agencies use net debt adjusted for DRD in their analyses of the Company's debt and therefore we provide this non-U.S. GAAP measure. DRD are fair value adjustments to the carrying value of the underlying debt. Also included in the DRD is the unamortized fair value adjustment related to a discontinued fair value hedges, which will be amortized over the remaining life of the debt. By adjusting for DRD, the total financial liability of net debt is disclosed without grossing debt up with currency or interest fair values.

	September 30, 2019			September 30, 2018			December 31, 2018			September 30, 2020			September 30, 2019			December 31, 2019
Short-term debt	$	289.9		$	573.0		$	620.7		$	1,025.5		$	289.9		$	368.1
Long-term debt		1,815.1			1,677.5			1,609.0			2,007.1			1,815.1			1,726.1
Total debt		2,105.0			2,250.5			2,229.7			3,032.6			2,105.0			2,094.2
Cash and cash equivalents		(334.4	)		(533.7	)		(615.8	)		(1,476.5	)		(334.4	)		(444.7	)
Debt issuance cost/Debt-related derivatives, net		10.7			7.6			4.9			17.0			10.7			0.3
Net debt	$	1,781.3		$	1,724.4		$	1,618.8		$	1,573.1		$	1,781.3		$	1,649.8

~~Net debt~~ ~~(non-U.S. GAAP measure, see reconciliation table above) amounted to $1,781 million as of September 30, 2019, which was close to unchanged compared to a year earlier.~~

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

	September 30, 2019			September 30, 2018		December 31, 2018		September 30, 2020		September 30, 2019			December 31, 2019
Net debt¹⁾	$	1,781.3		$	1,724.4	$	1,618.8	$	1,573.1	$	1,781.3		$	1,649.8
Pension liabilities		199.9			204.3		198.2		239.2		199.9			240.2
Debt per the Policy		1,981.2			1,928.7		1,817.0		1,812.3		1,981.2			1,890.0

Net income²⁾		216.1			218.9		183.7		155.3		216.1			462.8
Less: Net loss from discontinued operations²⁾		(2.0	)		448.8		193.8
Less; Net loss from discontinued operations²⁾									–		(2.0	)		–
Net income continuing operations²⁾		214.1			667.7		377.5		155.3		214.1			462.8
Income taxes²⁾		226.8			183.4		234.9		67.6		226.8			185.6
Interest expense, net^2,3)		67.0			54.8		59.2		65.6		67.0			65.9
Depreciation and amortization of intangibles²⁾		348.8			332.6		342.0		358.6		348.8			350.6
Antitrust related matters, capacity alignment and separation costs²⁾		254.5			6.7		216.5
Antitrust related matters, capacity alignment and separation costs²									107.8		254.5			48.6
EBITDA per the Policy	$	1,111.2		$	1,245.2	$	1,230.1	$	754.9	$	1,111.2		$	1,113.5
Leverage ratio		1.8			1.5		1.5		2.4		1.8			1.7

(non-U.S. GAAP measure, see calculation in table above). Autoliv’s policy is to maintain a leverage ratio commensurate with a strong investment grade credit rating. The Company measures its leverage ratio as net debt (non-U.S. GAAP measure) adjusted for pension liabilities in relation to EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted for antitrust related matters, capacity alignment and separation costs. The long-term target is to maintain a leverage ratio of around 1x within a range of 0.5x to 1.5x. As of September 30, 2019, the Company had a leverage ratio of 1.8x, compared to 1.8x at June 30, 2019 and 1.5x at September 30, 2018.Headcount

~~Total equity~~ decreased in the quarter by $38 million compared to June 30, 2019 mainly due to $54 million from dividends and $71 million in currency translation effects partly offset by $86 million in net income. Total equity increased by $103 million in the nine months period, mainly due to $307 million from net income, partly offset by $45 million from currency translation effects, and $163 million from dividends.

	September 30, 2019			June 30, 2019			September 30, 2018			September 30, 2020			June 30, 2020			September 30, 2019
Headcount		64,900			65,700			66,500			65,300			61,800			64,900
Whereof:
Direct workers in manufacturing		71	%		71	%		71	%		72	%		70	%		71	%
Best cost countries		80	%		80	%		80	%		81	%		81	%		80	%
Temporary personnel		9	%		10	%		14	%		9	%		6	%		9	%

Compared to June 30, ~~2019,~~2020, total headcount (permanent employees and temporary personnel) ~~decreased~~increased by ~~approximately 800.~~3,522. The ~~decrease~~increase in the quarter was driven by an increase of around 9% of the direct workforce reflecting a ~~reduction of both direct and~~sharp increase in light vehicle production compared to second quarter 2020. The indirect ~~workforce.~~workforce decreased by around 2%, reflecting our Structural Efficiency Programs. Compared to a year ago, total headcount ~~decreased~~increased by ~~approximately 1,600, with close to 80%~~0.6%, driven by an increase of around 3% of the direct workforce and a reduction ~~being in~~of 4% of the ~~direct~~indirect workforce. The headcount reductions reflect the balancing of cost reduction efforts to offset the decline in light vehicle markets and to support the growth in organic sales (non-U.S. GAAP measure) driven by new vehicle program launches.

The Company’s organic sales growth and adjusted operating margin ~~(non-U.S. GAAP measure)~~ outlook indications for ~~2019 reflects the~~2020 reflect continuing ~~high level of~~ uncertainty in the automotive markets and are mainly based on ~~the assumption that global~~our customer call-offs and light vehicle production ~~declines by 6-7% in full year 2019 compared~~according to ~~full year 2018.~~IHS.

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

~~The Company adopted ASU 2016-02 -~~ ~~Leases,~~ effective January 1, 2019. The adoption of the new lease standard had a material impact on the Company’s balance sheet. For further information see Note 2, New Accounting Standards and Note 4, Leases, to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on its financial position, results of operations or cash flows.

~~Except as set forth below, as of September 30, 2019, the~~The Company’s future contractual obligations have not changed materially from the amounts reported in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the SEC on February 21, ~~2019.~~2020.

On June 24, 2019, Autoliv entered into a SEK 1,200 million bilateral loan agreement with Svensk Exportkredit. The full loan amount was utilized on June 27, 2019 and is due for repayment on June 27, 2022. 28

On June 27, 2019, Autoliv issued Floating Rate Notes due December 2020 in a principal amount of EUR 100 million under its Euro Medium Term Note Programme, commenced as of April 11, 2019 (the “Notes”). The Notes were issued at an issue price of 100.168% of the aggregate nominal amount of the Notes, and carry a coupon rate of the three-month Euro Interbank Offered Rate (EURIBOR) plus 0.50% per annum.

~~Below are some of the key models which were launched in the third quarter of 2019.~~

~~Land Rover Defender:~~ ~~Driver and/or Passenger airbags, Side airbags, Head/Inflatable Curtain airbags, Seatbelts.~~

~~Peugeot 208:~~ ~~Steering Wheel, Driver and/or Passenger airbags, Side airbags, Head/Inflatable Curtain airbags, Seatbelts.~~

~~Chevrolet Trailblazer:~~ ~~Steering Wheel, Driver and/or Passenger airbags, Side airbags, Head/Inflatable Curtain airbags, Seatbelts.~~

~~Cadillac CT5:~~ ~~Steering Wheel, Driver and/or Passenger airbags, Side airbags, Head/Inflatable Curtain airbags, Seatbelts.~~

~~Ford Puma:~~ ~~Steering Wheel, Driver and/or Passenger airbags, Side airbags.~~

~~BYD Song Pro:~~ ~~Steering Wheel, Driver and/or Passenger airbags, Side airbags, Head/Inflatable Curtain airbags, Seatbelts.~~

~~On August 19, 2019, the Company declared a quarterly dividend to shareholders of 62 cents per share for the fourth quarter of 2019, with the following payment schedule:~~

~~Autoliv intends to publish the quarterly earnings report for the fourth quarter of 2019 on Tuesday, January 28, 2020.~~

As of September 30, ~~2019,~~2020, there have been no material changes to the information related to quantitative and qualitative disclosures about market risk that was provided in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the SEC on February 21, ~~2019.~~2020.

An evaluation has been carried out, under the supervision and with the participation of the Company's management, including our Chief Executive Officer and ~~Interim~~ Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the Company's Chief Executive Officer and ~~Interim~~ Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

35The Company’s ability to maintain an effective internal control environment has not been impacted by the COVID-19 pandemic. The Company is continually monitoring and assessing the COVID-19 pandemic on the its internal controls to minimize the impact on their design and operating effectiveness.

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

See Part I, Item 1, "Financial Statements, Note 129 Contingent Liabilities" of this Quarterly Report on Form 10-Q for a summary of certain ongoing legal proceedings. Such information is incorporated into this Part II, Item 1—"Legal Proceedings" by reference.

AsExcept as set forth below, as of September 30, ~~2019,~~2020, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December 31, ~~2018~~2019 filed with the SEC on February 21, 2020.

We face risks related to the novel coronavirus (COVID-19) pandemic that have, and are expected to continue to have, an adverse impact on our business and financial performance

The COVID-19 pandemic has created significant volatility in the global economy and led to significant reduced economic activity and employment and has disrupted, and may continue to disrupt, the global automotive industry and customer sales, production volumes and purchases of light vehicles by end-consumers. The spread of COVID-19 has also caused disruptions in the manufacturing, delivery and overall supply chains of automobile manufacturers and suppliers. Global light vehicle production has decreased significantly and some vehicle manufacturers have slowed down, completely shutdown manufacturing operations for a period of time and/or restarted production in some countries and regions. As a result, we have modified our production schedules and have experienced, and may continue to experience, delays in the production and distribution of our products and a decline in sales to our customers. As production resumes by us and our customers, production volumes have been and may continue to be volatile. We have also taken protective measures to modify our production environment to ensure the health and safety of our workers which has had an impact on our productivity. Additionally, if the global economic effects caused by the pandemic continue or increase, overall customer demand may continue to decrease, which could have a material and adverse effect on our business, results of operations and financial condition. In addition, if a significant portion of our workforce or our customers’ workforce is affected by COVID-19 either directly or due to government closures or otherwise, associated work stoppages or facility closures would halt or delay production.

The full extent of the effect of the pandemic on us, our customers, our supply chain and our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak or subsequent outbreaks. We may continue to experience the effects of the pandemic even after it has waned, and our business, results of operations and financial condition could continue to be affected. In particular, if COVID-19 continues to spread or re-emerges, particularly in the United States, Europe and China, where our operations are most concentrated, resulting in a prolonged period of travel, commercial, social and other similar restrictions, we could experience, among other things:

In addition to the risks specifically described above, the impact of COVID-19 is likely to implicate and exacerbate other risks disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019.

You should not anticipate or expect the payment of cash dividends on our common stock

Our dividend policy is subject to the discretion of our Board of Directors and depends upon a number of factors, including our earnings, financial condition, cash and capital needs, indebtedness and leverage, and general economic or business conditions. On April 2, 2020 our Board of Directors suspended our quarterly dividend after determining that a suspension was necessary in light of the evolving global COVID-19 pandemic, decline in global LVP, the uncertainty surrounding the recession at that time and the inherent risk of customer defaults. There can be no assurance that our Board of Directors will declare dividends in the future.

We currently conduct operations in various countries and jurisdictions, including locating certain of our manufacturing and distribution facilities internationally, which subjects us to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Some of these countries are considered growth markets and emerging markets. International sales and operations, especially in growth markets, subject us to certain risks inherent in doing business abroad, including:

The Company is subject to taxation in the U.S. and numerous foreign jurisdictions. The Organization for Economic Co-operation and Development (“OECD”) continues its base erosion and profit shifting (“BEPS”) project begun in 2015 with new proposals for a global minimum tax, further development of a coordinated set of rules for taxation and the allocation of taxing rights between jurisdictions. These proposals, if adopted by countries in which we operate, could result in changes to tax policies, including transfer pricing policies, that could ultimately impact our tax liabilities. The timing or impact of these proposals and recommendations is unclear at this point. Changes in tax laws or policies by the U.S. or foreign jurisdictions could result in a higher effective tax rate on our worldwide earnings, and any such change could have a material adverse effect on our business prospects, cash flows, operating results and financial condition.

Our international operations also depend upon favorable trade relations between the U.S. and those foreign countries in which our customers and suppliers have operations. The current U.S. presidential administration has created uncertainty about the future relationship between the U.S. and certain of its trading partners, including with respect to the trade policies and agreements, treaties, government regulations and tariffs that could apply to trade between the U.S. and other nations. These developments may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between these nations and the U.S. It could also impact importing certain foreign-produced vehicles into the U.S. Similarly, the political situations in certain countries, specifically Brazil, China, France, Russia,

Turkey, and the United Kingdom, make it difficult to predict the near-term stability of trade costs with these nations. Meanwhile, the U.S. presidential election in November 2020 could result in a shift in U.S. trade policy that is impossible to predict at this time. Changes in national policy or continued uncertainty could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on our cash flows, operating results and financial condition.

Increasing our manufacturing footprint in the growth markets and our business relationships with automotive manufacturers in these markets are particularly important elements of our strategy. As a result, our exposure to the risks described above may be greater in the future, and our exposure to risks associated with developing countries, such as the risk of political upheaval and reliability of local infrastructure, may increase.

Significant changes to international trade policy, including the recently enacted USMCA could adversely affect our financial performance

In October 2018, the U.S., Mexico and Canada agreed to a trade deal that would replace NAFTA known as The United States Mexico Canada Agreement (“USMCA”). The USMCA has been ratified by Mexico, the U.S. and Canada. The USMCA was entered into on July 1, 2020. As adopted, the USMCA changes the automotive rules of origin that dictate what percentage of an automobile must be built from parts that originated from countries in the North American region. Reflective of the automotive industry, our vehicle parts manufacturing facilities in the U.S., Mexico and Canada are highly dependent on duty-free trade within the USMCA free trade region. As a result of these policy changes and other proposals of the Trump Administration, there may be greater restrictions and economic disincentives on international trade. New tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries. Such changes have the potential to adversely impact the U.S. economy or certain sectors thereof, including our industry and the global demand for our products and, as a result, could negatively impact our financial performance.

Our business in Asia is subject to aggressive competition and is sensitive to economic and market conditions

We operate in the automotive supply market throughout Asia including the highly competitive markets in China, Korea, and India. In each of these markets we face competition from both international and smaller domestic manufacturers. Due to the significance of the Asian markets for our profit and growth, we are exposed to risks in China, Korea, and India. We anticipate that additional competitors, both international and domestic, may seek to enter the Chinese, Korean, and/or Indian markets resulting in increased competition. Increased competition may result in price reductions, reduced margins and our inability to gain or hold market share. There have been periods of increased market volatility and moderation in the levels of economic growth in China, which resulted in periods of lower automotive production growth rates in China than those previously experienced. Our business in Asia is sensitive to economic and market conditions that drive automotive sales volumes in China, Korea, and India and may be impacted if there are reductions in vehicle demand in those markets. If we are unable to maintain our position in these Asian markets, the pace of growth slows, or vehicle sales in these markets decrease, our business prospects, operating results and financial condition could be materially adversely affected.

During the quarter ended September 30, ~~2019,~~2020, the Company made no stock repurchases. The Company is authorized to purchase up to 47.5 million shares of common stock under its stock repurchase program, which was first approved by the board of directors of the Company on May 9, 2000. Under the existing authorization, 2,986,288 shares may be repurchased. The stock repurchase program does not have an expiration date.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock (par value $1.00 per share)		ALV		New York Stock Exchange

Balance Sheet (Dollars in millions)	Balance at December 31, 2018		Adjustments due to ASU 2016-02		Balance at January 1, 2019
Assets
Right-of-use asset, operating leases	$	—	$	155.4	$	155.4
Current liabilities
Operating lease liabilities - current		—		38.7		38.7
Non-current liabilities
Operating lease liabilities - non-current		—		116.7		116.7

Financial measure		Full year indication
Net sales growth		Around ~~(2)~~(14.5)%
Organic sales growth		Around 1%(13)%
Adjusted operating margin¹⁾		Around 9%6.0%
R,D&E, net % of sales		~~Around 2018~~Above 2019 level
Tax rate ²⁾		Around ~~28%~~40%
Operating cash flow ~~excl. EC antitrust payment~~²⁾		~~$700-800 million~~Below 2019 level
~~Capital expenditures,~~Capex, net % of sales		~~Around 2018~~Below 2019 level
Leverage ratio at ~~year end~~year-end		~~Around 1.7x~~Above target range


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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging ~~Growth Company~~growth company	☐

Lease cost
(in millions)	Three months ended			Nine months ended
	September 30, 2019			September 30, 2019
Operating lease cost	$	12		$	36
Short-term lease cost		2			5
Variable lease cost		1			3
Sublease income		(1	)		(2	)
Total lease cost	$	14		$	42

Other information
(in millions)	Nine months ended or as of
	September 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	35
Right-of-use assets obtained in exchange for new operating lease liabilities	34
Weighted-average remaining lease term - operating leases	7 years
Weighted-average discount rate - operating leases		2.4	%

Maturities of operating lease liabilities (undiscounted cash flows) are as follows:
(in millions)
	As of September 30, 2019
2019 (excluding the nine months ended September 30, 2019)	$	12
2020	$	38
2021	$	26
2022	$	21
2023	$	18
Thereafter	$	55
Total operating lease payments	$	170
Less imputed interest	$	(15	)
Total operating lease liabilities	$	155

Net Sales by Products
(Dollars in millions)	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Airbag Products and Other¹⁾	$	1,349.3	$	1,357.4	$	4,232.7	$	4,234.9
Seatbelt Products¹⁾		678.4		675.6		2,123.7		2,250.5
Total net sales	$	2,027.7	$	2,033.0	$	6,356.4	$	6,485.4

Net Sales by Region
(Dollars in millions)	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
China	$	381.7	$	351.9	$	1,061.7	$	1,103.5
Japan		202.4		196.3		601.6		606.4
Rest of Asia		193.6		200.9		622.8		623.6
Americas		713.1		684.8		2,214.2		2,034.3
Europe		536.9		599.1		1,856.1		2,117.6
Total net sales	$	2,027.7	$	2,033.0	$	6,356.4	$	6,485.4

	September 30, 2019
				Fair Value Measurements
Description	Nominal volume			Derivative asset			Derivative liability			Balance sheet location
Derivatives not designated as hedging instruments
Foreign exchange swaps, less than 6 months	$	864.2	¹⁾	$	1.4	²⁾	$	7.3	³⁾	Other current assets/ Other current liabilities
Total derivatives not designated as hedging instruments	$	864.2		$	1.4		$	7.3

	As of
Related party (Dollars in millions)	September 30, 2019		December 31, 2018
Related party receivables	$	3.7	$	15.0
Related party payables		9.9		50.7
Related party accrued expenses		9.0		13.0

~~Ex-date (common stock)~~	~~November 19, 2019~~
~~Ex-date (SDRs)~~	~~November 19, 2019~~
~~Record Date~~	~~November 20, 2019~~
~~Payment Date~~	~~December 5, 2019~~

Exhibit No.		Description

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

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

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

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

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

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

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

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

4.7		Base listing particulars Agreement, dated April 11, 2019, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein., incorporated herein by reference to Exhibit 4.7 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2019).

4.8		Programme Agreement, dated April 11, 2019, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.8 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2019).

4.9		Agency Agreement, dated April 11, 2019, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.9 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 26, 2019).

~~10.1+~~ 4.10		~~Mutual Separation~~Base Listing Particulars Agreement, dated ~~July 1, 2019, between~~February 21, 2020, among Autoliv, Inc., Autoliv ASP, Inc. and ~~Mike Hague,~~the dealers named therein, incorporated herein by reference to Exhibit ~~10.4~~4.10 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date ~~July 19, 2019)~~April 24, 2020).

4.11		Amended and Restated Programme Agreement, dated February 21, 2020, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.11 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 24, 2020).

4.12		Amended and Restated Agency Agreement, dated February 21, 2020, among Autoliv, Inc., Autoliv ASP, Inc. and the dealers named therein, incorporated herein by reference to Exhibit 4.12 to the Quarterly Report on Form 10-Q (File No. 001-12933, filing date April 24, 2020).

10.1*+		Amendment, effective November 1, 2020, to Employment Agreement, effective as of June 29, 2018, by and between Autoliv, Inc. and Bradley J. Murray.

10.2*+		Employment Agreement, ~~dated July 14, 2016,~~effective as of August 17, 2020, by and between Autoliv ~~Inc.~~AB and ~~Christian Hanke.~~

~~10.3*+~~		~~Employment Agreement, dated April 23, 2019, between Autoliv, Inc. and Frithjof Oldorff.~~

~~10.4*+~~		~~Employment Agreement, dated March 18, 2019, between Autoliv, Inc. and Christian Swahn.~~

~~10.5*+~~		~~Employment Agreement, dated February 15, 2019, between Autoliv, Inc. and Magnus Jarlegren.~~

10.6*		~~Form of Indemnification Agreement between Autoliv, Inc. and its directors and certain of its executive officers.~~Mikael Hagström.

31.1*		Certification of the Chief Executive Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2*		Certification of the ~~Interim~~ Chief Financial Officer of Autoliv, Inc. pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

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

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

Exhibit No.		Description

101.INS*		Inline XBRL Instance Document – The instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*		Cover Page Interactive Data File (embedded within the inline XBRL document).

By:		/s/ ~~Christian Hanke~~Fredrik Westin
		~~Christian Hanke~~Fredrik Westin
		~~Interim~~ Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)