Financial Analysis

"8. CONTINGE NT LIABILITIES Legal Proceedings Various claims, lawsuits, and proceedings are pending or threatened against the Company and/or its subsidiaries, covering a range of matters that arise in the ordinary course of its business activities with respect to commercial, product liability, and other matters. Litigation is subject to many uncertainties, and the outcome of any litigation cannot be assured. After discussions with counsel, and with the exception of potential future losses resulting from the antitrust proceedings described below, it is the opinion of management that the various legal proceedings and investigations to which the Company currently is a party will not have a material adverse impact on the consolidated financial position of Autoliv, but the Company cannot provide assurance that Autoliv will not experience material litigation, product liability, or other losses in the future. ANTITRUST MATTERS Authorities in several jurisdictions have conducted broad, and in some cases, long-running investigations of suspected anti-competitive behavior among parts suppliers in the global automotive vehicle industry. These investigations included, but are not limited to, the products that the Company sells. In addition to concluded matters, authorities of other countries, with significant light vehicle manufacturing or sales may initiate similar investigations. As a result of the outcome of the European Commission investigation of anti-competitive behavior among supp …

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The Companys disaggregated revenue for the periods presented are as follows (dollars in millions). Net Sales by Products Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Airbags, Steering Wheels and Other 1) $ 1,906 $ 1,812 $ 3,769 $ 3,565 Seatbelt Products and Other 1) 897 902 1,787 1,727 Total net sales $ 2,803 $ 2,714 $ 5,556 $ 5,292 Net Sales by Region Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Americas $ 910 $ 891 $ 1,773 $ 1,742 EMEA 832 828 1,667 1,592 Asia excl. China 539 519 1,102 1,034 China 522 477 1,014 924 Total net sales $ 2,803 $ 2,714 $ 5,556 $ 5,292 1) Including Corporate sales. …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

4. INCO ME TAXES The effective tax rate for the three months period ended June 30, 2026 was 34.5 % compared to 24.1 % for the three months period ended June 30, 2025. Discrete tax items, net for the three months period ended June 30, 2026 had an unfavorable impact of 5.4 % . Discrete tax items, net for the three months period ended June 30, 2025 had a favorable impact of 4.3 % . The effective tax rate for the six months period ended June 30, 2026 was 31.9 % compared to 26.1 % for the six months period ended June 30, 2025. Discrete tax items, net for the six months period ended June 30, 2026 had an unfavorable impact of 3.7 % . Discrete tax items, net for the six months period ended June 30, 2025 had a favorable impact of 2.1 % . 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 2021. With few exceptions, the Company is no longer subject to income tax examination by U.S. state or local tax authorities or by non-U.S. tax authorities for years before 2016. As of June 30, 2026, the Company is not aware of any proposed income tax adjustments resulting from tax examinations that would have a material impact on the Companys condensed consolidated financial statements. The conclusion of s …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Changes to U.S. GAAP are established by the Financial Accounting Standards Board ( FASB) in the form of Accounting Standards Updates (ASUs) to the FASBs 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 Companys consolidated financial statements. Adoption of new accounting standards In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements , to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2025-11 can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company early adopted ASU 2025-11 prospectively in the first quarter of 2026. The adoption of ASU 2025-11 did not have a significant impact on it …

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6. REST RUCTURING As of June 30, 2026, the restructuring reserve balance of $ 122 million is mainly attributed to structural cost reduction program activities initiated in Europe, the Middle East and Africa (EMEA) in 2023 and the capacity alignment program in Turkiye initiated during the second quarter of 2026. The main part of the remaining balance for the activities initiated in EMEA in 2023 is expected to be concluded in 2026. Provisions for the three and six months periods ended June 30, 2026 mainly related to the capacity alignment program in Turkiye and restructuring activities in EMEA. Cash payments for the three and six months periods ended June 30, 2026 mainly related to the restructuring activities in EMEA that were initiated in 2023. Substantially all cash payments related to the Turkiye program are expected to be made by the end of 2027. 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, 2026 2025 2026 2025 Reserve at beginning of the period $ 73 $ 121 $ 82 $ 151 Provision - ch …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

10. REVENUE DISAGGREGATION The Companys disaggregated revenue for the periods presented are as follows (dollars in millions). Net Sales by Products Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Airbags, Steering Wheels and Other 1) $ 1,906 $ 1,812 $ 3,769 $ 3,565 Seatbelt Products and Other 1) 897 902 1,787 1,727 Total net sales $ 2,803 $ 2,714 $ 5,556 $ 5,292 Net Sales by Region Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Americas $ 910 $ 891 $ 1,773 $ 1,742 EMEA 832 828 1,667 1,592 Asia excl. China 539 519 1,102 1,034 China 522 477 1,014 924 Total net sales $ 2,803 $ 2,714 $ 5,556 $ 5,292 1) Including Corporate sales. …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

11. Segment Information The Company has a single operating and reportable segment which includes Autolivs airbag and steering wheels, and seatbelt products and components. The determination of a single operating segment is consistent with the consolidated financial information regularly provided to the Companys chief operating decision maker (CODM). The basis of segmentation and the basis of measurement of segment profit or loss is consistent with our 2025 annual report on the consolidated financial statements. The significant expenses that are regularly provided to the CODM are disclosed in the Consolidated Statements of Net Income as a part of the consolidated net income and are as follows. Significant segment expenses / income (Dollars in millions) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Total direct costs $ ( 1,891 ) $ ( 1,838 ) $ ( 3,730 ) $ ( 3,572 ) Total production overhead costs ( 403 ) ( 375 ) ( 791 ) ( 740 ) Cost of sales $ ( 2,294 ) $ ( 2,213 ) $ ( 4,521 ) $ ( 4,312 ) Research, development and engineering expenses (gross) $ ( 165 ) $ ( 155 ) $ ( 329 ) $ ( 302 ) Reimbursements from customer funded engineering projects 43 48 87 100 Research, development and engineering expenses, net $ ( 122 ) $ ( 107 ) $ ( 242 ) $ ( 202 ) The Company's other significant segment items that are regularly provided to the CODM include selling, general and administrative expenses, and other income (expense), which are disclosed as separate line items in …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

12. SUBSE QUENT EVENTS There were no reportable events subsequent to June 30, 2026 .

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