Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Jul. 18, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ALV | |
Security Exchange Name | NYSE | |
Entity Registrant Name | AUTOLIV, INC. | |
Entity Central Index Key | 0001034670 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock (par value $1.00 per share) | |
Entity Common Stock, Shares Outstanding | 87,089,697 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-12933 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 51-0378542 | |
Entity Address, Address Line One | Klarabergsviadukten 70, Section B7 | |
Entity Address, Address Line Two | Box 70381 | |
Entity Address, City or Town | Stockholm | |
Entity Address, Country | SE | |
Entity Address, Postal Zip Code | SE-107 24 | |
City Area Code | +46 8 | |
Local Phone Number | 587 20 600 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Income Statement [Abstract] | |||||
Net sales | $ 2,081 | $ 2,022 | $ 4,206 | $ 4,265 | |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | |
Cost of sales | $ (1,755) | $ (1,638) | $ (3,591) | $ (3,422) | |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | |
Gross profit | $ 326 | $ 384 | $ 614 | $ 843 | |
Selling, general and administrative expenses | (112) | (111) | (227) | (219) | |
Research, development and engineering expenses, net | (112) | (107) | (219) | (213) | |
Amortization of intangibles | 0 | (3) | (2) | (5) | |
Other income (expense), net | [1] | 22 | 0 | 92 | (4) |
Operating income | 124 | 164 | 258 | 401 | |
Income from equity method investment | 1 | 0 | 2 | 2 | |
Interest income | 1 | 2 | 2 | 2 | |
Interest expense | (13) | (16) | (26) | (32) | |
Other non-operating items, net | 5 | 2 | 1 | (4) | |
Income before income taxes | 117 | 152 | 237 | 370 | |
Income tax expense | (38) | (48) | (74) | (108) | |
Net income | 79 | 105 | 163 | 262 | |
Less: Net income attributable to non-controlling interest | 0 | 0 | 1 | 1 | |
Net income attributable to controlling interest | $ 79 | $ 104 | $ 162 | $ 261 | |
Net earnings per share - basic | [2] | $ 0.91 | $ 1.19 | $ 1.86 | $ 2.98 |
Net earnings per share - diluted | [2] | $ 0.91 | $ 1.19 | $ 1.85 | $ 2.98 |
Weighted average number of shares outstanding, net of treasury shares (in millions) | [3] | 87.2 | 87.4 | 87.2 | 87.4 |
Weighted average number of shares outstanding, assuming dilution and net of treasury shares (in millions) | 87.3 | 87.7 | 87.4 | 87.7 | |
Cash dividend per share - declared | $ 0.64 | $ 0.62 | $ 1.28 | $ 0.62 | |
Cash dividend per share – paid | $ 0.64 | $ 0.62 | $ 1.28 | $ 0.62 | |
[1] 1) The three months period ending June 30, 2022, includes a gain of $ 21 million from a patent litigation settlement. The six months period ending June 30, 2022, includes a gain on sale of property of $ 80 million in Japan in March 2022 and a gain of $ 21 million from a patent litigation settlement in June 2022. Participating share awards with the right to receive dividend equivalents are (under the two-class method) excluded from the earnings per share calculation (see Note 11 to the unaudited condensed consolidated financial statements). The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | ||
Gain on sale of property | [1] | $ 22 | $ 92 | |
Property gain Japan | ||||
Gain on sale of property | $ 80 | |||
Patent litigation settlement | $ 21 | $ 21 | ||
[1] 1) The three months period ending June 30, 2022, includes a gain of $ 21 million from a patent litigation settlement. The six months period ending June 30, 2022, includes a gain on sale of property of $ 80 million in Japan in March 2022 and a gain of $ 21 million from a patent litigation settlement in June 2022. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 79 | $ 105 | $ 163 | $ 262 |
Other comprehensive (loss) income before tax: | ||||
Change in cumulative translation adjustments | (121) | 37 | (115) | (27) |
Net change in unrealized components of defined benefit plans | 3 | 1 | 15 | 3 |
Other comprehensive (loss) income, before tax | (118) | 38 | (100) | (24) |
Tax effect allocated to other comprehensive loss | (1) | 0 | (5) | (1) |
Other comprehensive (loss) income, net of tax | (118) | 38 | (104) | (25) |
Comprehensive income (loss) | (40) | 143 | 58 | 237 |
Less: Comprehensive income attributable to non-controlling interest | (1) | 1 | 0 | 1 |
Comprehensive (loss) income attributable to controlling interest | $ (40) | $ 142 | $ 58 | $ 236 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Assets | |||
Cash and cash equivalents | $ 327 | $ 969 | |
Receivables, net | 1,779 | 1,699 | |
Inventories, net | 903 | 777 | |
Prepaid expenses and accrued income | 195 | 164 | |
Other current assets | 81 | 65 | |
Total current assets | 3,285 | 3,675 | |
Property, plant and equipment, net | 1,806 | 1,855 | |
Operating lease right-of-use assets | 120 | 132 | |
Goodwill | 1,373 | 1,387 | |
Intangible assets, net | 6 | 8 | |
Other non-current assets | 439 | 481 | |
Total assets | 7,030 | 7,537 | |
Liabilities and equity | |||
Short-term debt | [1] | 559 | 346 |
Accounts payable | 1,303 | 1,144 | |
Accrued expenses | 944 | 996 | |
Operating lease liabilities - current | 37 | 38 | |
Other current liabilities | 218 | 297 | |
Total current liabilities | 3,061 | 2,821 | |
Long-term debt | [1] | 1,060 | 1,662 |
Pension liability | 155 | 197 | |
Operating lease liabilities - non-current | 83 | 94 | |
Other non-current liabilities | 113 | 115 | |
Total non-current liabilities | 1,410 | 2,067 | |
Common stock | 102 | 103 | |
Additional paid-in capital | 1,319 | 1,329 | |
Retained earnings | 2,762 | 2,742 | |
Accumulated other comprehensive loss | (512) | (408) | |
Treasury stock | (1,128) | (1,133) | |
Total controlling interest's equity | 2,544 | 2,633 | |
Non-controlling interest | 15 | 15 | |
Total equity | 2,558 | 2,648 | |
Total liabilities and equity | $ 7,030 | $ 7,537 | |
[1] Debt as reported in balance sheet. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income | $ 163 | $ 262 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 186 | 199 |
Gain on divestiture of property | (80) | 0 |
Deferred income taxes | 17 | 3 |
Other, net | (9) | (1) |
Net change in operating assets and liabilities | (257) | (214) |
Net cash provided by operating activities | 19 | 249 |
Investing activities | ||
Expenditures for property, plant and equipment | (254) | (191) |
Proceeds from sale of property, plant and equipment | 98 | 1 |
Net cash used in investing activities | (156) | (189) |
Financing activities | ||
Net decrease in short-term debt | (277) | (291) |
Increase in long-term debt | 0 | 14 |
Decrease in long-term debt | (33) | 0 |
Dividends paid | (112) | (54) |
Stock repurchased | (40) | 0 |
Common stock options exercised | 0 | 2 |
Net cash used in financing activities | (462) | (329) |
Effect of exchange rate changes on cash and cash equivalents | (43) | (16) |
(Decrease) increase in cash and cash equivalents | (642) | (285) |
Cash and cash equivalents at beginning of period | 969 | 1,178 |
Cash and cash equivalents at end of period | $ 327 | $ 893 |
CONSOLIDATED STATEMENTS OF TOTA
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | Total controlling interest's equity | Non-controlling interest |
Balance at Dec. 31, 2020 | $ 2,423 | $ 103 | $ 1,329 | $ 2,471 | $ (347) | $ (1,147) | $ 2,409 | $ 14 |
Comprehensive Loss: | ||||||||
Net income | 157 | 157 | 157 | 0 | ||||
Foreign currency translation adjustment | (64) | (64) | (64) | 0 | ||||
Pension liability | 1 | 1 | 1 | |||||
Comprehensive income (loss) | 94 | 157 | (63) | 94 | 0 | |||
Stock-based compensation | 4 | 4 | 4 | |||||
Balance at Mar. 31, 2021 | 2,521 | 103 | 1,329 | 2,628 | (410) | (1,143) | 2,507 | 14 |
Balance at Dec. 31, 2020 | 2,423 | 103 | 1,329 | 2,471 | (347) | (1,147) | 2,409 | 14 |
Comprehensive Loss: | ||||||||
Net income | 262 | |||||||
Comprehensive income (loss) | 237 | |||||||
Balance at Jun. 30, 2021 | 2,615 | 103 | 1,329 | 2,678 | (372) | (1,138) | 2,600 | 15 |
Balance at Mar. 31, 2021 | 2,521 | 103 | 1,329 | 2,628 | (410) | (1,143) | 2,507 | 14 |
Comprehensive Loss: | ||||||||
Net income | 105 | 104 | 104 | 1 | ||||
Foreign currency translation adjustment | 37 | 37 | 37 | 0 | ||||
Pension liability | 1 | 1 | 1 | |||||
Comprehensive income (loss) | 143 | 104 | 38 | 142 | 1 | |||
Stock-based compensation | 5 | 5 | 5 | |||||
Cash dividends declared | (54) | (54) | (54) | |||||
Balance at Jun. 30, 2021 | 2,615 | 103 | 1,329 | 2,678 | (372) | (1,138) | 2,600 | 15 |
Balance at Dec. 31, 2021 | 2,648 | 103 | 1,329 | 2,742 | (408) | (1,133) | 2,633 | 15 |
Comprehensive Loss: | ||||||||
Net income | 83 | 83 | 83 | 0 | ||||
Foreign currency translation adjustment | 6 | 6 | 6 | 0 | ||||
Pension liability | 8 | 8 | 8 | |||||
Comprehensive income (loss) | 98 | 83 | 14 | 97 | 0 | |||
Stock repurchased and retired | (18) | 0 | (4) | (13) | (18) | |||
Stock-based compensation | 2 | 2 | 2 | |||||
Cash dividends declared | (56) | (56) | (56) | |||||
Balance at Mar. 31, 2022 | 2,674 | 103 | 1,325 | 2,755 | (393) | (1,131) | 2,659 | 15 |
Balance at Dec. 31, 2021 | 2,648 | 103 | 1,329 | 2,742 | (408) | (1,133) | 2,633 | 15 |
Comprehensive Loss: | ||||||||
Net income | 163 | |||||||
Comprehensive income (loss) | 58 | |||||||
Balance at Jun. 30, 2022 | 2,558 | 102 | 1,319 | 2,762 | (512) | (1,128) | 2,544 | 15 |
Balance at Mar. 31, 2022 | 2,674 | 103 | 1,325 | 2,755 | (393) | (1,131) | 2,659 | 15 |
Comprehensive Loss: | ||||||||
Net income | 79 | 79 | 79 | 0 | ||||
Foreign currency translation adjustment | (122) | (121) | (121) | (1) | ||||
Pension liability | 3 | 3 | 3 | |||||
Comprehensive income (loss) | (40) | 79 | (119) | (40) | (1) | |||
Stock repurchased and retired | (22) | 0 | 6 | 16 | (22) | |||
Stock-based compensation | 2 | 2 | 2 | |||||
Cash dividends declared | (56) | (56) | (56) | |||||
Balance at Jun. 30, 2022 | $ 2,558 | $ 102 | $ 1,319 | $ 2,762 | $ (512) | $ (1,128) | $ 2,544 | $ 15 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the prior year audited consolidated financial statements and all adjustments considered necessary for a fair presentation have been included in the consolidated financial statements. All such adjustments are of a normal recurring nature. The results for the interim period are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending December 31, 2022. The Condensed Consolidated Balance Sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The Company has one reportable segment, which includes Autoliv’s airbag and seatbelt products and components. Certain amounts in the condensed consolidated financial statements and associated notes may not reconcile due to rounding. All percentages have been calculated using unrounded amounts. Certain amounts in prior periods have been reclassified to conform to current year presentation. Statements in this report that are not of historical fact are forward-looking statements that involve risks and uncertainties that could affect the actual results of the Company. A description of the important factors that could cause Autoliv’s actual results to differ materially from the forward-looking statements contained in this report may be found in this report and Autoliv’s other reports filed with the Securities and Exchange Commission (the “SEC”). For further information, refer to the consolidated financial statements, footnotes and definitions thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 22, 2022 . |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | 2. NEW ACCOU NTING STANDARDS Changes to U.S. GAAP are established by the Financial Accounting Standards Board ( “FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). 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. Adoption of new accounting standards In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance, which increases the transparency of government assistance, including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. ASU 2021-10 is effective for business entities for annual periods beginning after December 15, 2021, and early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company adopted this standard prospectively on January 1, 2022 and the adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures. Accounting standards issued but not yet adopted None that is expected to have a material impact on the Company. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. FAIR VALU E MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The carrying value of cash and cash equivalents, accounts receivable, accounts payable, short-term debt and other current financial assets and liabilities approximate their fair value because of the short-term maturity of these instruments. The Company uses derivative financial instruments (“derivatives”) as part of its debt management to mitigate the market risk that occurs from its exposure to changes in interest rates and foreign exchange rates. The Company does not enter into derivatives for trading or other speculative purposes. The Company’s use of derivatives is in accordance with the strategies contained in the Company’s overall financial policy. All derivatives are recognized in the consolidated financial statements at fair value. For certain derivatives, hedge accounting is not applied either because non-hedge accounting treatment creates the same accounting result or the hedge does not meet the hedge accounting requirements, although each hedge is entered into applying the same rationale concerning mitigating market risk that occurs from changes in interest rates and foreign exchange rates. The degree of judgment utilized in measuring the fair value of the instruments generally correlates to the level of pricing observability. Pricing observability is impacted by several factors, including the type of asset or liability, whether the asset or liability has an established market and the characteristics specific to the transaction. Instruments with readily active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, assets rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value. All the Company’s derivatives are classified as Level 2 financial instruments in the fair value hierarchy. Level 2 pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed. The carrying value is the same as the fair value as these instruments are recognized in the consolidated financial statements at fair value. Although the Company is party to close-out netting agreements (“ISDA agreements”) with all derivative counterparties, the fair values in the tables below and in the Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 have been presented on a gross basis. According to the ISDA agreements, transaction amounts payable to a counterparty on the same date and in the same currency can be netted. The amounts subject to netting agreements that the Company chose not to offset are presented below. Derivatives designated as hedging instruments There were no derivatives designated as hedging instruments as of June 30, 2022 or December 31, 2021 related to the Company's operations. Derivatives not designated as hedging instruments Derivatives not designated as hedging instruments relate to economic hedges and are marked to market with all amounts recognized in the Consolidated Statements of Income. The derivatives not designated as hedging instruments outstanding as of June 30, 2022 and December 31, 2021 were foreign exchange swaps. For the three months period ended June 30, 2022 and 2021, the gains (losses) recognized in other non-operating items, net were $( 23 ) million and $ 20 million, respectively, for derivative instruments not designated as hedging instruments. For the six months period ended June 30, 2022 and 2021, the gains (losses) recognized in other non-operating items, net were $( 14 ) million and $( 38 ) million. The realized part of the losses referred to above is reported under financing activities in the statement of cash flows. For the three and six months periods ended June 30, 2022 and June 30, 2021, the gains (losses) recognized as interest expense were immaterial. The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions). As of June 30, 2022 December 31, 2021 Fair Value Measurements Fair Value Measurements Description Nominal Derivative Derivative Nominal Derivative Derivative Derivatives not designated as hedging Foreign exchange swaps, less $ 1,422 1) $ 4 2) $ 28 3) $ 1,348 4) $ 5 5) $ 16 6) Total derivatives not designated $ 1,422 $ 4 $ 28 $ 1,348 $ 5 $ 16 1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,422 million. 2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 4 million. 3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 28 million. 4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,326 million. 5) Net amount after deducting for offsetting swaps under ISDA agreements is $ 5 million. 6) Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. Fair Value of Debt The fair value of long-term debt is determined either from quoted market prices as provided by participants in the secondary market or for long-term debt without quoted market prices, estimated using a discounted cash flow method based on the Company’s current borrowing rates for similar types of financing. The Company has determined that each of these fair value measurements of debt reside within Level 2 of the fair value hierarchy. The fair value and carrying value of debt is summarized in the table below (dollars in millions). As of June 30, 2022 December 31, 2021 Carrying 1) Fair Carrying 1) Fair Long-term debt Bonds $ 767 $ 753 $ 1,330 $ 1,400 Loans 294 300 332 347 Total long-term debt 1,060 1,052 1,662 1,747 Short-term debt Short-term portion of long-term debt 522 514 332 333 Overdrafts and other short-term debt 37 37 14 14 Total short-term debt $ 559 $ 551 $ 346 $ 348 1) Debt as reported in balance sheet. Assets and liabilities measured at fair value on a nonrecurring basis In addition to assets and liabilities that are measured at fair value on a recurring basis, the Company also has assets and liabilities in its balance sheet that are measured at fair value on a nonrecurring basis, including certain long-lived assets, including equity method investments, goodwill and other intangible assets, typically as it relates to impairment. The Company has determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and the Company’s assumptions about the use of the assets and settlements of liabilities, as observable inputs are not available. The Company has determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. To determine the fair value of long-lived assets, the Company utilizes the projected cash flows expected to be generated by the long-lived assets, then discounts the future cash flows over the expected life of the long-lived assets. For the three and six months periods ended June 30, 2022 and June 30, 2021, the Company did no t record any material impairment charges on its long-lived assets for its operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 4. INCO ME TAXES The effective tax rate for the three months period ended June 30, 2022 was 32.2 % compared to 31.3 % for the three months period ended June 30, 2021. Discrete tax items, net for the three months period ended June 30, 2022 had an unfavorable impact of 1.5 % . Discrete tax items, net for the three months period ended June 30, 2021 had an unfavorable impact of 0.2 % . The effective tax rate for the six months period ended June 30, 2022 was 31.3 % compared to 29.2 % for the six months period ended June 30, 2021. Discrete tax items, net for the six months period ended June 30, 2022 had an unfavorable impact of 1.0 % . Discrete tax items, net for the six months period ended June 30, 2021 had a favorable impact of 0.1 % . The Company files income tax returns in the U.S. federal jurisdiction, various U.S. states and non-U.S. jurisdictions. At any given time, the Company is undergoing tax audits in several tax jurisdictions covering multiple years. The Company is no longer subject to income tax examination by the U.S. federal income tax authorities for years prior to 2015. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2010. As of June 30, 2022, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Company’s condensed consolidated financial statements. The conclusion of such audits could result in additional increases or decreases to unrecognized tax benefits in some future period or periods. During the six months period ended June 30, 2022, the Company recorded a net increase of $ 4 million to income tax reserves for unrecognized tax benefits based on tax positions related to the current year, including accruing additional interest related to unrecognized tax benefits from prior years. Of the total unrecognized tax benefits of $ 53 million recorded as of June 30, 2022, $ 16 million is classified as current tax payable within Other current liabilities and $ 37 million is classified as non-current tax payable within Other non-current liabilities on the Condensed Consolidated Balance Sheet. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INV ENTORIES Inventories are stated at the lower of cost (“FIFO”) and net realizable value. The components of inventories were as follows (dollars in millions): As of June 30, 2022 December 31, 2021 Raw materials $ 420 $ 395 Work in progress 332 283 Finished products 242 190 Inventories 994 868 Inventory valuation reserve ( 92 ) ( 91 ) Total inventories, net of reserve $ 903 $ 777 |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | 6. REST RUCTURING As of June 30, 2022, approximately $ 11 million out of the $ 45 million in total reserve balance can be attributed to the structural efficiency program initiated in the second quarter of 2020 and mainly relates to Europe. This program is expected to be concluded in 2022. Approximately $ 21 million of the total reserve balance can be attributed to footprint optimization activities in Europe initiated in the third quarter of 2020. These activities are expected to be concluded in 2023. The cash payments for the three months period ended June 30, 2022 relate to restructuring activities in Europe and Asia. The majority of the cash payments for the six months period ended June 30, 2022 relate to footprint optimization activities in Asia. The table below summarizes the change in the balance sheet position of the employee-related restructuring reserves (dollars in millions). The restructuring reserve balances are included within Accrued expenses in the Condensed Consolidated Balance Sheets. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reserve at beginning of the period $ 58 $ 113 $ 88 $ 126 Provision - charge 0 1 12 2 Provision - reversal ( 0 ) ( 0 ) ( 0 ) ( 0 ) Cash payments ( 9 ) ( 8 ) ( 50 ) ( 17 ) Translation difference ( 4 ) 1 ( 5 ) ( 4 ) Reserve at end of the period $ 45 $ 107 $ 45 $ 107 |
Product-Related Liabilities
Product-Related Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Product Warranties Disclosures [Abstract] | |
Product-Related Liabilities | 7. PRODUCT-REL ATED LIABILITIES The Company is exposed to product liability and warranty claims in the event that the Company’s products fail to perform as represented and such failure results, or is alleged to result, in bodily injury, and/or property damage or other loss. The Company has reserves for product risks. Such reserves are related to product performance issues, including recalls, product liability and warranty issues. For further explanation, see Note 9. Contingent Liabilities below. For the three and six months periods ended June 30, 2022, provisions and cash payments primarily relate to warranty related issues. For the three and six months periods ended June 30, 2021, provisions and cash paid primarily related to warranty related issues. As of June 30, 2022, the reserve for product related liabilities mainly relates to recall related issues. The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). A majority of the Company’s product-related liabilities as of June 30, 2022 are covered by insurance. Insurance receivables are included within Other current assets and Other non-current assets on the Condensed Consolidated Balance Sheets. As of June 30, 2022, the Company had total insurance receivables of $ 149 million. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reserve at beginning of the period $ 150 $ 328 $ 144 $ 341 Change in reserve 3 1 12 5 Cash payments ( 5 ) ( 237 ) ( 8 ) ( 243 ) Translation difference ( 2 ) 11 ( 2 ) ( 0 ) Reserve at end of the period $ 145 $ 103 $ 145 $ 103 |
Retirement Plans
Retirement Plans | 6 Months Ended |
Jun. 30, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plans | 8. RETIR EMENT PLANS The components of total Net Periodic Benefit Cost associated with the Company’s defined benefit retirement plans are as follows (dollars in millions): U.S. Plans Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Service cost $ 0 $ 2 $ 0 $ 4 Interest cost 4 2 6 5 Expected return on plan assets 0 ( 5 ) ( 4 ) ( 9 ) Amortization of prior service cost — 1 — 0 Amortization of actuarial loss 0 1 0 1 Settlement loss 0 — 1 — Net Periodic Benefit Cost $ 4 $ 1 $ 3 $ 1 Non-U.S. Plans Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Service cost $ 2 $ 3 $ 5 $ 6 Interest cost 2 2 3 3 Expected return on plan assets ( 1 ) ( 1 ) ( 1 ) ( 1 ) Amortization of actuarial loss 0 1 0 1 Curtailment gain ( 2 ) — ( 2 ) — Settlement gain ( 2 ) — ( 3 ) — Net Periodic Benefit (Gain) Cost $ ( 1 ) $ 5 $ 2 $ 9 The Service cost and Amortization of prior service cost components in the tables above are reported among other employee compensation costs in the Consolidated Statements of Income. The remaining components - Interest cost, Expected return on plan assets, Amortization of actuarial loss, Settlement loss (gain) and Curtailment gain - are reported as Other non-operating items, net in the Consolidated Statements of Income. Settlement accounting has been triggered for the U.S. pension plans because the lump-sum payments made during the second quarter exceeded the sum of service cost and interest cost for these U.S. plans. Due to the settlement accounting, the obligation and plan assets for these U.S. plans have been re-measured as of June 30, 2022, which resulted in a lower net pension liability of $ 3 million compared to March 31, 2022. The discount rate used to determine the U.S. net periodic benefit cost because of the re-measurement was changed from previously 3.76 % to 4.76 % in the second quarter. The expected long-term rate of return on plan asset is unchanged at 5.05 %. |
Contingent Liabilities
Contingent Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Liabilities | 9. CONTINGE NT LIABILITIES Legal Proceedings Various claims, lawsuits and proceedings are pending or threatened against the Company or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability or other losses in the future. ANTITRUST MATTERS Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products that the Company sells. In addition to concluded matters, authorities of other countries with significant light vehicle manufacturing or sales may initiate similar investigations. PRODUCT WARRANTY, RECALLS AND INTELLECTUAL PROPERTY Autoliv is exposed to various claims for damages and compensation if its products fail to perform as expected. Such claims can be made, and result in costs and other losses to the Company, even where the product is eventually found to have functioned properly. Where a product (actually or allegedly) fails to perform as expected or is defective, the Company may face warranty and recall claims. Where such (actual or alleged) failure or defect results, or is alleged to result, in bodily injury and/or property damage or other loss, 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 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 existing and future 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 adverse impact on the Company’s results of operations. The Company maintains a program of insurance, which may include commercial insurance, self-insurance, or a combination of both approaches, for potential recall and product liability claims in amounts and on terms that it believes are reasonable and prudent based on our prior claims experience. The Company’s insurance policies generally include coverage of the costs of a recall, although costs related to replacement parts are generally not covered. In addition, a number of the agreements entered into by the Company, including the Spin-off Agreements, require Autoliv to indemnify the other parties for certain claims. Autoliv cannot assure that the level of coverage will be sufficient to cover every possible claim that can arise in our businesses or with respect to other obligations, now or in the future, or that such coverage always will be available should we, now or in the future, wish to extend, increase or otherwise adjust our insurance. Product Liability: On September 18, 2014 , Jamie Andrews filed a wrongful death products liability suit against several Autoliv entities stemming from a fatal car accident in 2013 where the plaintiff’s husband was fatally injured. The lawsuit alleges that Autoliv should be liable for a defectively-designed driver seatbelt. The case was removed to the United States District Court for the Northern District of Georgia. The suit originally included Bosch and Mazda entities as well, but these entities were dismissed pursuant to confidential settlement agreements with the plaintiff, and all of the Autoliv entities except Autoliv Japan Ltd. were also dismissed. On January 10, 2017, the District Court entered an order granting summary judgment in favor of Autoliv, concluding that Autoliv was not actively involved in the design of Mr. Andrews’s seatbelt and, therefore, should not be liable for plaintiff’s claims as a matter of law. However, on appeal, the Eleventh Circuit Court of Appeals reversed the decision, holding that, under Georgia’s products liability statute, Autoliv could be liable for a design defect associated with the seatbelt, regardless of its level of involvement in the seatbelt’s ultimate design, because Autoliv manufactured it. On October 4, 2021, the case proceeded to a bench trial before the United States District Court for the Northern District of Georgia. On December 31, 2021, the District Court entered a Final Order and Judgment concluding that Mr. Andrews’s seatbelt was defectively designed and Autoliv was strictly liable for the design. In doing so, the District Court concluded that Mr. Andrews had incurred $ 27,019,343 in compensatory damages, but only ordered Autoliv to pay 50 percent of that amount, $ 13,509,671 after finding that 50 percent of the fault for Mr. Andrews’s damages should be apportioned to Mazda . The Court declined to apportion any fault for Mr. Andrews’s damages to Mr. Andrews or Bosch. The District Court also entered an award of punitive damages against Autoliv in the amount of $ 100,000,000 . The plaintiff has since filed a post-trial motion asking the District Court to hold Autoliv liable for the entire amount of compensatory damages ($ 27,019,343 ), not just $ 13,509,671 . The plaintiff has also requested pre-judgment interest on the damages awards plus attorneys’ fees and costs. Autoliv has opposed these requests. The Company believes the District Court’s verdict was in error, including the grossly high punitive damages award, and has filed a post-trial motion with the District Court asking for reconsideration of the verdict. To the extent its post-trial motion is denied, the Company also plans to appeal the verdict. The Company has determined that a loss with respect to this litigation is probable and in the fourth quarter of 2021 accrued $ 14 million pursuant to ASC 450. The accrual is reflected in the total product liability accrual. This amount reflects the low end of the range of a probable loss of $ 14 million to $ 114 million. The accrual reflects the Company’s best estimate of the probable loss based on currently available information and does not include any amount for the punitive damages. It is reasonably possible that the Company may have to pay the entire damages awarded by the District Court. The Company believes that its insurance should cover all of the types of damages awarded by the District Court, and has therefore recognized a receivable, included within Other non-current assets on the Consolidated Balance Sheets for the expected insurance proceeds. However, the extent of the Company's insurance coverage for punitive damages in this matter is uncertain and may be less than all of such punitive damages ultimately awarded. In the event all or a portion of the punitive damages award survives the Company's post-judgement actions, the Company will continue to engage with our insurance carriers and aggressively pursue all potential recoveries. The ultimate loss to the Company of the litigation matter could be materially different from the amount the Company has accrued. The Company cannot predict or estimate the duration or ultimate outcome of this matter. Specific Recalls: In the fourth quarter of 2020, the Company was made aware of a potential recall by one of its customers (the “Unannounced Recall”). The Company continues to evaluate this matter with its customer. The Company has determined pursuant to ASC 450 that a loss with respect to the Unannounced Recall is probable and has accrued an amount that is reflected in the total product liability accrual in the fourth quarter of 2020. The amount by which the product liability accrual exceeds the product liability insurance receivable with respect to the Unannounced Recall is $ 26 million, and includes self-insurance retention costs and deductibles. The ultimate loss to the Company of the Unannounced Recall could be materially different from the amount the Company has accrued. Volvo Car USA, LLC (together with its affiliates, “Volvo” ) has recalled approximately 762,000 vehicles relating to the malfunction of inflators produced by ZF (the “ZF Inflator Recall”). The recalled ZF inflators were included in airbag modules supplied by the Company only to Volvo. The recall commenced in November 2020 and later expanded in September 2021. Because the Company’s airbags were involved with the ZF Inflator Recall, the Company has determined pursuant to ASC 450 that a loss is reasonably possible with respect to the ZF Inflator Recall. The Company continues to evaluate this matter with Volvo and ZF and no accrual has been made. Although the Company currently estimates a range of $ 0 to $ 43 million with respect to this potential loss, the Company anticipates that any losses net of insurance claims and claims against ZF will be immaterial. Intellectual Property: The Company utilizes technologies in its products, 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 that infringe upon such rights, its customers may be entitled to be indemnified by the Company for the claims they suffer as a result thereof. Such claims could be material. The table in Note 7. Product-Related Liabilities above summarizes the change in the balance sheet position of the product-related liabilities. |
Stock Incentive Plan
Stock Incentive Plan | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Incentive Plan | 10. STOCK IN CENTIVE PLAN Eligible employees and non-employee directors of the Company participate in the Autoliv, Inc.1997 Stock Incentive Plan (“the Plan”), as amended and receive Autoliv stock-based awards which include stock options (“SOs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”). For the three and six months periods ended June 30, 2022, the Company recorded approximately $ 3 million and $ 5 million, respectively, in stock-based compensation expense related to RSUs and PSUs. For the three and six months periods ended June 30, 2021, the Company recorded approximately $ 4 million and $ 7 million, respectively, in stock-based compensation expense related to RSUs and PSUs. During the three and six months periods ended June 30, 2022, approximately 16 thousand and 138 thousand shares, respectively, of common stock from the treasury stock were utilized by the Plan. During the three and six months periods ended June 30, 2021, approximately 47 thousand and 116 thousand shares, respectively, of common stock from the tr easury stock were utilized by the Plan. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | 11. EARNING S PER SHARE The computation of basic and diluted EPS under the two-class method is set forth in the table below. Anti-dilutive shares outstanding were immaterial for all periods presented below. Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share amounts) 2022 2021 2022 2021 Numerator: Basic and diluted: Net income attributable to controlling interest $ 79 $ 104 $ 162 $ 261 Participating share awards with dividend 0 0 0 0 Net income applicable to common 79 104 162 261 Earnings allocated to participating 1) 0 0 0 0 Net income attributable to common $ 79 $ 104 $ 162 $ 261 Denominator: 1) Basic: Weighted average common stock 87.2 87.4 87.2 87.4 Add: Weighted average stock options/ 0.1 0.3 0.2 0.3 Diluted: 87.3 87.7 87.4 87.7 Net earnings per share - basic $ 0.91 $ 1.19 $ 1.86 $ 2.98 Net earnings per share - diluted $ 0.91 $ 1.19 $ 1.85 $ 2.98 1) The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. RELATED PAR TY TRANSACTIONS Veoneer, Inc., was a related party until April 1, 2022. During the three months period ended March 31, 2022, when Veoneer was a related party, the Company's related party purchases from Veoneer amounted to $ 17 million. For the three and six months periods ended June 30, 2021, the Company's related party purchases from Veoneer amounted to $ 20 million and $ 41 million, respectively. Amounts due to and due from related party as of December 31, 2021 were as follows (dollars in millions). As of December 31, 2021 Related party receivables 1) $ 1 Related party payables 2) 15 Related party accrued expenses 3) 9 1) Included in Receivables, net in the Condensed Consolidated Balance Sheet. 2) Included in Accounts payable in the Condensed Consolidated Balance Sheet. 3) Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Revenue Disaggregation
Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disaggregation | 13. REVENUE DISAGGREGATION The Company’s disaggregated revenue for the three and six months periods ended June 30, 2022 and June 30, 2021, were as follows (dollars in millions). Net Sales by Products Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Airbag Products and Other 1) $ 1,336 $ 1,310 $ 2,716 $ 2,773 Seatbelt Products 1) 746 712 1,489 1,491 Total net sales $ 2,081 $ 2,022 $ 4,206 $ 4,265 1) Including Corporate and other sales. Net Sales by Region Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 China $ 363 $ 399 $ 810 $ 814 Japan 142 175 320 386 Rest of Asia 227 219 459 471 Americas 738 621 1,431 1,307 Europe 611 608 1,186 1,287 Total net sales $ 2,081 $ 2,022 $ 4,206 $ 4,265 Contract Balances Contract assets relate to the Company's rights to consideration for work completed but not billed (generally in conjunction with contracts for which revenue is recognized over time) at the reporting date on production parts and is included in Other current assets in the Condensed Consolidated Balance Sheet. The contract assets are reclassified into the receivables balance when the rights to receive payments become unconditional. The net change in the contract assets balance, reflecting the adjustments needed to align revenue recognition for work completed but not billed, for the three and six months periods ended June 30, 2022 and June 30, 2021 , were not material in any period. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSE QUENT EVENTS There were no reportable events subsequent to June 30, 2022 . |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
New Accounting Standards | Changes to U.S. GAAP are established by the Financial Accounting Standards Board ( “FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). 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. Adoption of new accounting standards In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance, which increases the transparency of government assistance, including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. ASU 2021-10 is effective for business entities for annual periods beginning after December 15, 2021, and early adoption is permitted. The amendments in this Update should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company adopted this standard prospectively on January 1, 2022 and the adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures. Accounting standards issued but not yet adopted None that is expected to have a material impact on the Company. |
Contingent Liabilities | Autoliv’s warranty reserves are based upon the Company’s best estimates of amounts necessary to settle existing and future 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. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The tables below present information about the Company’s derivative financial assets and liabilities measured at fair value on a recurring basis (dollars in millions). As of June 30, 2022 December 31, 2021 Fair Value Measurements Fair Value Measurements Description Nominal Derivative Derivative Nominal Derivative Derivative Derivatives not designated as hedging Foreign exchange swaps, less $ 1,422 1) $ 4 2) $ 28 3) $ 1,348 4) $ 5 5) $ 16 6) Total derivatives not designated $ 1,422 $ 4 $ 28 $ 1,348 $ 5 $ 16 1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,422 million. 2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 4 million. 3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 28 million. 4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,326 million. 5) Net amount after deducting for offsetting swaps under ISDA agreements is $ 5 million. 6) Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. |
Fair Value of Debt | The fair value and carrying value of debt is summarized in the table below (dollars in millions). As of June 30, 2022 December 31, 2021 Carrying 1) Fair Carrying 1) Fair Long-term debt Bonds $ 767 $ 753 $ 1,330 $ 1,400 Loans 294 300 332 347 Total long-term debt 1,060 1,052 1,662 1,747 Short-term debt Short-term portion of long-term debt 522 514 332 333 Overdrafts and other short-term debt 37 37 14 14 Total short-term debt $ 559 $ 551 $ 346 $ 348 1) Debt as reported in balance sheet. |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Change in Balance Sheet Position of Employee Related Restructuring Reserves | The table below summarizes the change in the balance sheet position of the employee-related restructuring reserves (dollars in millions). The restructuring reserve balances are included within Accrued expenses in the Condensed Consolidated Balance Sheets. The changes in the employee-related reserves have been charged against Other income (expense), net in the Consolidated Statements of Income. Restructuring costs other than employee related costs are immaterial for all periods presented. Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reserve at beginning of the period $ 58 $ 113 $ 88 $ 126 Provision - charge 0 1 12 2 Provision - reversal ( 0 ) ( 0 ) ( 0 ) ( 0 ) Cash payments ( 9 ) ( 8 ) ( 50 ) ( 17 ) Translation difference ( 4 ) 1 ( 5 ) ( 4 ) Reserve at end of the period $ 45 $ 107 $ 45 $ 107 |
Product-Related Liabilities (Ta
Product-Related Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Change in Balance Sheet Position of Product-Related Liabilities | The table below summarizes the change in the balance sheet position of the product-related liabilities (dollars in millions). Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Reserve at beginning of the period $ 150 $ 328 $ 144 $ 341 Change in reserve 3 1 12 5 Cash payments ( 5 ) ( 237 ) ( 8 ) ( 243 ) Translation difference ( 2 ) 11 ( 2 ) ( 0 ) Reserve at end of the period $ 145 $ 103 $ 145 $ 103 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Schedule of Components of Net Periodic Benefit Cost | The components of total Net Periodic Benefit Cost associated with the Company’s defined benefit retirement plans are as follows (dollars in millions): U.S. Plans Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Service cost $ 0 $ 2 $ 0 $ 4 Interest cost 4 2 6 5 Expected return on plan assets 0 ( 5 ) ( 4 ) ( 9 ) Amortization of prior service cost — 1 — 0 Amortization of actuarial loss 0 1 0 1 Settlement loss 0 — 1 — Net Periodic Benefit Cost $ 4 $ 1 $ 3 $ 1 Non-U.S. Plans Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Service cost $ 2 $ 3 $ 5 $ 6 Interest cost 2 2 3 3 Expected return on plan assets ( 1 ) ( 1 ) ( 1 ) ( 1 ) Amortization of actuarial loss 0 1 0 1 Curtailment gain ( 2 ) — ( 2 ) — Settlement gain ( 2 ) — ( 3 ) — Net Periodic Benefit (Gain) Cost $ ( 1 ) $ 5 $ 2 $ 9 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Amounts Due to and Due from Related Party | Amounts due to and due from related party as of December 31, 2021 were as follows (dollars in millions). As of December 31, 2021 Related party receivables 1) $ 1 Related party payables 2) 15 Related party accrued expenses 3) 9 1) Included in Receivables, net in the Condensed Consolidated Balance Sheet. 2) Included in Accounts payable in the Condensed Consolidated Balance Sheet. 3) Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Revenue Disaggregation (Tables)
Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue by Products and Region | The Company’s disaggregated revenue for the three and six months periods ended June 30, 2022 and June 30, 2021, were as follows (dollars in millions). Net Sales by Products Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Airbag Products and Other 1) $ 1,336 $ 1,310 $ 2,716 $ 2,773 Seatbelt Products 1) 746 712 1,489 1,491 Total net sales $ 2,081 $ 2,022 $ 4,206 $ 4,265 1) Including Corporate and other sales. Net Sales by Region Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 China $ 363 $ 399 $ 810 $ 814 Japan 142 175 320 386 Rest of Asia 227 219 459 471 Americas 738 621 1,431 1,307 Europe 611 608 1,186 1,287 Total net sales $ 2,081 $ 2,022 $ 4,206 $ 4,265 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2022 Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Fair Value, Measurements, Nonrecurring | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Asset impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Not Designated as Hedging Instrument | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Derivatives designated as hedging instruments | 0 | 0 | $ 0 | ||
Gains (losses) recognized in other non-operating items, net | $ (23,000,000) | $ 20,000,000 | $ (14,000,000) | $ (38,000,000) |
Derivative Financial Assets and
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Not Designated as Hedging Instrument - Fair Value, Measurements, Recurring - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | ||
Derivatives, Fair Value [Line Items] | ||||
Nominal volume | $ 1,422,000,000 | $ 1,348,000,000 | ||
Other current assets | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset (Other current assets) | 4,000,000 | 5,000,000 | ||
Other current liabilities | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liability (Other current liabilities) | 28,000,000 | 16,000,000 | ||
Less Than Six Months | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Nominal volume | 1,422,000,000 | [1] | 1,348,000,000 | [2] |
Less Than Six Months | Other current assets | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative asset (Other current assets) | 4,000,000 | [3] | 5,000,000 | [4] |
Less Than Six Months | Other current liabilities | Foreign Exchange Swaps | ||||
Derivatives, Fair Value [Line Items] | ||||
Derivative liability (Other current liabilities) | $ 28,000,000 | [5] | $ 16,000,000 | [6] |
[1] 1) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,422 million. 4) Net nominal amount after deducting for offsetting swaps under ISDA agreements is $ 1,326 million. 2) Net amount after deducting for offsetting swaps under ISDA agreements is $ 4 million. 5) Net amount after deducting for offsetting swaps under ISDA agreements is $ 5 million. 3) Net amount after deducting for offsetting swaps under ISDA agreements is $ 28 million. 6) Net amount after deducting for offsetting swaps under ISDA agreements is $ 16 million. |
Derivative Financial Assets a_2
Derivative Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Parenthetical) (Detail) - Not Designated as Hedging Instrument - Foreign Exchange Swaps - Fair Value, Measurements, Recurring - Less Than Six Months - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative notional volume, amount after offsetting swaps | $ 1,422 | $ 1,326 |
Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, amount after offsetting swaps | 4 | 5 |
Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, amount after offsetting swaps | $ 28 | $ 16 |
Fair Value of Debt (Detail)
Fair Value of Debt (Detail) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | $ 1,060 | $ 1,662 |
Short-term debt | [1] | 559 | 346 |
Long-term debt, fair value | 1,052 | 1,747 | |
Short-term debt, fair value | 551 | 348 | |
Bonds | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 767 | 1,330 |
Long-term debt, fair value | 753 | 1,400 | |
Loans | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | [1] | 294 | 332 |
Long-term debt, fair value | 300 | 347 | |
Short-Term Portion of Long-Term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Short-term debt | [1] | 522 | 332 |
Short-term debt, fair value | 514 | 333 | |
Overdrafts and Other Short-Term Debt | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Short-term debt | [1] | 37 | 14 |
Short-term debt, fair value | $ 37 | $ 14 | |
[1] Debt as reported in balance sheet. |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes [Line Items] | ||||
Effective income tax rate | 32.20% | 31.30% | 31.30% | 29.20% |
Increase/(decrease) in effective tax rate due to impact of discrete tax items | 1.50% | 0.20% | 1% | 0.10% |
Net increase to income tax reserves for unrecognized tax benefits based on tax positions related to current and prior years | $ 4 | |||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | $ 53 | 53 | ||
Current Tax Payable Within Other Current Liabilities | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | 16 | 16 | ||
Non-Current Tax Payable Within Other Non-current Liabilities | ||||
Income Taxes [Line Items] | ||||
Unrecognized tax benefits reserve that would impact effective tax rate if released into income | $ 37 | $ 37 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 420 | $ 395 |
Work in progress | 332 | 283 |
Finished products | 242 | 190 |
Inventories | 994 | 868 |
Inventory valuation reserve | (92) | (91) |
Total inventories, net of reserve | $ 903 | $ 777 |
Restructuring - Additional Info
Restructuring - Additional Information (Detail) $ in Millions | Jun. 30, 2022 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | $ 45 |
Structural Efficiency Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | 11 |
Footprint Optimization Activities | Europe | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring reserve balance | $ 21 |
Schedule of Changes in Balance
Schedule of Changes in Balance Sheet Position of Employee Related Restructuring Reserves (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Reserve at end of the period | $ 45 | $ 45 | ||
Restructuring employee-related | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reserve at beginning of the period | 58 | $ 113 | 88 | $ 126 |
Provision - charge | 0 | 1 | 12 | 2 |
Provision - reversal | 0 | 0 | 0 | 0 |
Cash payments | (9) | (8) | (50) | (17) |
Translation difference | (4) | 1 | (5) | (4) |
Reserve at end of the period | $ 45 | $ 107 | $ 45 | $ 107 |
Product-Related Liabilities - A
Product-Related Liabilities - Additional Information (Detail) $ in Millions | Jun. 30, 2022 USD ($) |
Product Warranty Liability [Line Items] | |
Insurance receivables | $ 149 |
Summary of Change in Balance Sh
Summary of Change in Balance Sheet Position of Product-Related Liabilities (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Product Warranties Disclosures [Abstract] | ||||
Reserve at beginning of the period | $ 150 | $ 328 | $ 144 | $ 341 |
Change in reserve | (3) | 1 | 12 | 5 |
Cash payments | (5) | (237) | (8) | (243) |
Translation difference | (2) | 11 | (2) | 0 |
Reserve at end of the period | $ 145 | $ 103 | $ 145 | $ 103 |
Components of Net Periodic Bene
Components of Net Periodic Benefit Cost (Detail) - Pension Plans, Defined Benefit - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
U.S. Pension Plans | ||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0 | $ 2 | $ 0 | $ 4 |
Interest cost | 4 | 2 | 6 | 5 |
Expected return on plan assets | 0 | (5) | (4) | (9) |
Amortization of prior service cost | 1 | 0 | ||
Amortization of actuarial loss | 0 | 1 | 0 | 1 |
Settlement gain | 0 | (1) | ||
Settlement loss | 0 | 1 | ||
Net Periodic Benefit Cost | 4 | 1 | 3 | 1 |
Non-U.S. Pension Plans | ||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 2 | 3 | 5 | 6 |
Interest cost | 2 | 2 | 3 | 3 |
Expected return on plan assets | (1) | (1) | (1) | (1) |
Amortization of actuarial loss | 0 | 1 | 0 | 1 |
Curtailment gain | (2) | (2) | ||
Settlement gain | (2) | 0 | (3) | 0 |
Settlement loss | 2 | 0 | 3 | 0 |
Net Periodic Benefit Cost | $ (1) | $ 5 | $ 2 | $ 9 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Details) - U.S. Pension Plans $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Net periodic benefit cost | 3.76% |
Increased return on plan assets | $ 3 |
Pension Plan [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Expected long-term rate of return on assets | 5.05% |
Net periodic benefit cost | 4.76% |
Contingent Liabilities - Additi
Contingent Liabilities - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) Vehicle | Dec. 31, 2021 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Lawsuit Filing Date | September 18, 2014 | ||||||
Loss Contingency, Name of Plaintiff | Jamie Andrews | ||||||
Loss Contingency, Actions Taken by Court, Arbitrator or Mediator | In doing so, the District Court concluded that Mr. Andrews had incurred $27,019,343 in compensatory damages, but only ordered Autoliv to pay 50 percent of that amount, $13,509,671 after finding that 50 percent of the fault for Mr. Andrews’s damages should be apportioned to Mazda | ||||||
Loss Contingency, Damages Sought, Value | $ (27,019,343) | $ (27,019,343) | |||||
Loss Contingency Damages To Be Paid | 13,509,671 | ||||||
Additional Punitive Damages | 100,000,000 | ||||||
Gain (Loss) Related to Litigation Settlement | $ 14 | ||||||
Product liability accrual | 145 | 145 | 144 | $ 150 | $ 103 | $ 328 | $ 341 |
Mazda | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency Damages To Be Paid | 13,509,671 | ||||||
Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | 114 | ||||||
Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Range of Possible Loss, Portion Not Accrued | $ 14 | ||||||
Unannounced Recall | Damages from Product Defects | |||||||
Loss Contingencies [Line Items] | |||||||
Product liability accrual | $ 26 | ||||||
ZF Inflator Recall | Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Estimate potential loss | 43 | 43 | |||||
ZF Inflator Recall | Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Estimate potential loss | 0 | 0 | |||||
ZF Inflator Recall | Damages from Product Defects | |||||||
Loss Contingencies [Line Items] | |||||||
Product liability accrual | $ 0 | $ 0 | |||||
ZF Inflator Recall | Damages from Product Defects | Global | |||||||
Loss Contingencies [Line Items] | |||||||
Number of vehicles recalled | Vehicle | 762,000 |
Stock Incentive Plan - Addition
Stock Incentive Plan - Additional Information (Detail) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share Based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares from treasury stock utilized by the Plan | 16 | 47 | 138 | 116 |
Restricted Stock Units And Performance Stock Units | ||||
Share Based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock compensation cost | $ 3 | $ 4 | $ 5 | $ 7 |
Schedule of Computation of Basi
Schedule of Computation of Basic and Diluted EPS under Two-class Method (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Numerator: | |||||
Net income attributable to controlling interest | $ 79 | $ 104 | $ 162 | $ 261 | |
Participating share awards with dividend equivalent rights | 0 | 0 | 0 | 0 | |
Net income applicable to common shareholders | 79 | 104 | 162 | 261 | |
Earnings allocated to participating share awards | [1] | 0 | 0 | 0 | 0 |
Net income attributable to common shareholders | $ 79 | $ 104 | $ 162 | $ 261 | |
Denominator: | |||||
Basic: Weighted average common stock | [1] | 87.2 | 87.4 | 87.2 | 87.4 |
Add: Weighted average stock options/share awards | [1] | 0.1 | 0.3 | 0.2 | 0.3 |
Diluted: | 87.3 | 87.7 | 87.4 | 87.7 | |
Net earnings per share - basic | [2] | $ 0.91 | $ 1.19 | $ 1.86 | $ 2.98 |
Net earnings per share - diluted | [2] | $ 0.91 | $ 1.19 | $ 1.85 | $ 2.98 |
[1] The Company’s unvested RSUs and PSUs, of which some included the right to receive non-forfeitable dividend equivalents, are considered participating securities. Calculations of EPS under the two-class method exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities. The related participating securities are similarly excluded from the denominator. Participating share awards with the right to receive dividend equivalents are (under the two-class method) excluded from the earnings per share calculation (see Note 11 to the unaudited condensed consolidated financial statements). |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Veoneer, Inc. | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 20 | $ 17 | $ 41 |
Summary of Amounts Due to and D
Summary of Amounts Due to and Due from Related Party (Detail) $ in Millions | Dec. 31, 2021 USD ($) | |
Related Party Transactions [Abstract] | ||
Related party receivables | $ 1 | [1] |
Related party payables | 15 | [2] |
Related party accrued expenses | $ 9 | [3] |
[1] Included in Receivables, net in the Condensed Consolidated Balance Sheet. Included in Accounts payable in the Condensed Consolidated Balance Sheet. Included in Accrued expenses in the Condensed Consolidated Balance Sheet. |
Schedule of Disaggregated Reven
Schedule of Disaggregated Revenue by Products and Region (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 2,081 | $ 2,022 | $ 4,206 | $ 4,265 |
Airbag Products And Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 1,336 | 1,310 | 2,716 | 2,773 |
Seatbelt Products [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 746 | 712 | 1,489 | 1,491 |
China | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 363 | 399 | 810 | 814 |
Japan | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 142 | 175 | 320 | 386 |
Rest of Asia | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 227 | 219 | 459 | 471 |
Americas | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | 738 | 621 | 1,431 | 1,307 |
Europe | ||||
Disaggregation Of Revenue [Line Items] | ||||
Net sales | $ 611 | $ 608 | $ 1,186 | $ 1,287 |