Autoliv - 10-K annual report

Title of each class:

DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of the Annual Report to Shareholders for the fiscal year ended December 31, 2005 (the "Annual Report") are incorporated by reference into Parts I and II.

2. Portions of the definitive Proxy Statement dated March 8, 2006, for the annual stockholders' meeting to be held May 4, 2006 (the "2006 Proxy Statement"), are incorporated by reference into Parts II and III.

3. Certain Exhibits of Autoliv, Inc.'s Registration Statement on Form S-4 (File #333-23813)(the "Registration Statement") are incorporated by reference into Part IV.

PART I

ITEM 1. BUSINESS*

General

Autoliv, Inc. ("Autoliv" or the "Company") is a Delaware holding corporation with its principal executive offices in Stockholm, Sweden. The Company owns two principal subsidiaries, Autoliv AB ("AAB") and Autoliv ASP, Inc. ("ASP"). Autoliv's filings with the United States Securities and Exchange Commission (the "SEC"), which include this Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all related amendments, are made available free of charge on our corporate website at www.autoliv.com and are available as soon as reasonably practicable after they are electronically filed with the SEC.

Shares of Autoliv common stock are traded on the New York Stock Exchange under the symbol "ALV" and Swedish Depositary Receipts representing shares of Autoliv common stock trade on the OMX Stockholm Stock Exchange under the symbol "ALIV". Options in Autoliv shares are listed on the Chicago Board Options Exchange under the symbol "ALIV". Autoliv's fiscal year ends on December 31.

AAB, a Swedish corporation, is a leading developer, manufacturer and supplier to the automotive industry of car occupant restraint systems. Starting with seatbelts in 1956, AAB expanded its product lines to include seatbelt pretensioners (1989), frontal airbags (1991), side-impact airbags (1994), steering wheels (1995) and seat sub-systems (1996).

ASP, an Indiana corporation, pioneered airbag technology in 1968 and has since grown into one of the world's leading producers of airbag modules and inflators. ASP designs, develops and manufactures airbag inflators, modules and airbag cushions, seatbelts and steering wheels. ASP sells inflators and modules for use in driver, passenger, side-impact and knee bolster airbag systems for worldwide automotive markets.

Business

Autoliv was created from the merger of AAB and ASP in 1997. Autoliv is the world's leading supplier of automotive occupant safety restraint systems with a broad range of product offerings, including modules and components for passenger and driver-side airbags, side-impact airbag protection systems, seatbelts, steering wheels, safety seats and other safety systems and products. Autoliv has production facilities in 28 countries and counts the world's largest car manufacturers among its customers.

Autoliv's head office is located in Stockholm, Sweden and employs approximately 40 people. Autoliv had approximately 34,100 employees at December 31, 2005, and a total headcount, including temporary employees, of 38,800. Autoliv's sales in 2005 were $6.2 billion, approximately 66% of which consisted of airbags and associated products and approximately 34% of which consisted of seat belts and associated products. Autoliv's most important markets are in Europe, the United States, Japan and Asia-Pacific.

The information required by Item 1 regarding developments in the Company's business during 2005 is contained in the Annual Report on pages 10-13 and 23 and is incorporated herein by reference.

Financial Information on Segments

Autoliv considers its products to be components of integrated car passenger protection systems, which fall within a single industry segment. The financial data relating to Autoliv's business in this segment over the last three fiscal years is contained in the Consolidated Financial Statements on pages 33 through 50 of the Annual Report and is incorporated herein by reference. A statement of net sales by product group for the last three years is contained in Note 19 of the Notes to the Consolidated Financial Statements on page 50 of the Annual Report and is incorporated herein by reference.

Products, Market and Competition

Information concerning products, markets and competition is included in the section titled "Creating Shareholder Value" on page 13 of the Annual Report and is incorporated herein by reference.

Manufacturing and Production

Including joint venture operations, Autoliv has approximately 80 wholly or partially owned production facilities located in 28 countries, consisting of both component factories and assembly factories. See "Item 2. Properties" for a description of Autoliv's principal properties. The component factories manufacture inflators, initiators, textile cushions, webbing materials, electronics, pressed steel parts, springs and overmoulded steel parts used in seat belt and airbag assembly, seat subsystems, and steering wheels. The assembly factories source components from a number of parties, including Autoliv's own component factories, and assemble complete restraint systems for "just-in-time" delivery to customers. The products manufactured by Autoliv's wholly owned assembly factories in 2005 consisted of more than 94 million complete seat belt systems (more than 44 million of which were fitted with pretensioners), nearly 27 million frontal airbag modules, nearly 36 million side-impact airbags (including curtain airbags), nearly 9 million steering wheels and nearly 24 million electronic units.

Autoliv's "just-in-time" delivery systems have been designed to accommodate the specific requirements of each customer for low levels of inventory and rapid stock delivery service. "Just-in-time" deliveries require final assembly or at least distribution centers in geographic areas close to customers to facilitate rapid delivery. The fact that the major automobile manufacturers are continually expanding production activities into more countries and require the same or similar safety systems as those produced in Europe, Japan or the United States increases the importance to suppliers of having assembly capacity in several countries. Consolidation among our customers also supports this trend.

If the supply of raw materials and components is not disrupted, Autoliv's assembly operations generally are not constrained by capacity considerations. Autoliv can adjust capacity in response to changes in demand within a few weeks by adding or removing work shifts and within a few months by the adding or removing standardized production and assembly lines. Most of Autoliv's assembly factories can make sufficient space available to accommodate additional production lines to satisfy foreseeable increases in capacity. As a result, Autoliv can usually adjust its manufacturing capacity faster than its customers can adjust their capacities to changes in the general demand for vehicles or in the demand for a specific vehicle model, provided customers notify us when they become aware of such changes in demand.

Autoliv typically contributes design and production knowledge to joint ventures, with the local partner providing sales support and manufacturing facilities. Some of these local partners manufacture and sell standardized seat belt systems, and will, through the joint venture with Autoliv, be able to upgrade their technology to meet specific customer demands and/or expand their product offerings. In addition to joint ventures in emerging markets, Autoliv has also established joint ventures in developed markets such as France, either to strengthen its sales position or to gain access to the market.

Available information

The public may read and copy any materials Autoliv files with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (1-)202-942-8090. Further information regarding filings with the SEC is included in the section titled "Financial Information and Filings" on page 3 of the Annual Report and is incorporated herein by reference.

ITEM 1A RISK FACTORS

Changes in the source and availability of raw materials and components.

Our business uses a broad range of raw materials and components in the manufacture of our products, nearly all of which are generally available from a number of qualified suppliers. Peaks in worldwide demand for certain raw materials have had an impact on raw material costs and availability. Our business has not generally experienced significant or long-term difficulty in obtaining raw materials. However, the cost of direct materials amounts to approximately 50% of our sales. Of the direct materials costs, approximately 36% comprise raw materials costs and approximately 64% comprise value added costs by the supply chain. A significant increase in the price of these items could materially increase our operating costs and materially and adversely affect our profit margin.

Delays or stoppages in the delivery of components that are produced by a single supplier would result in supply interruption to our customers and could negatively impact our business.

We depend in certain instances on a single supplier for certain components relating to particular customer programs. The failure of these suppliers to perform as expected could result in us being unable to supply complete products to our customers in a timely manner. This non-performance on the part of our suppliers may consist of delivery delays or failures caused by production issues or delivery of non-conforming products. The risk of non-performance may also result from the insolvency or bankruptcy of one or more of our suppliers. Such non-performance could cause our customers to halt their own production processes. In such instances, we may lose income due to the reduced volume of supplied products and may also be exposed to the risk that our customers may seek to recoup from us consequential losses incurred as a result of their lost production.

Our business is exposed to risks inherent in global operations.

Our joint ventures and foreign subsidiaries may be subject to the usual risks inherent in global operations, including, but not limited to: risks with respect to currency exchange rates; economic and political destabilization; other disruption of markets; restrictive laws and actions of certain governments (such as restrictions on transfers of funds, export duties and quotas, foreign customs and tariffs and unexpected changes in regulatory environments); difficulty in obtaining distribution and support; nationalization; and the laws and policies of mainly the United States, the European Union, Japan, China and the World Trade Organization affecting trade, investment and loans; and tax laws. These and other factors may have a material adverse effect on our international operations or on our business, results of operations and financial condition.

If our patents are declared invalid or our technology infringes on the proprietary rights of others, our ability to compete may be impaired.

We have developed a considerable amount of proprietary technology related to car occupant restraint systems and rely on a number of patents to protect such technology. We primarily protect our innovations with patents, and vigorously protect and defend our patents, trademarks and know-how against infringement and unauthorized use. At present, we hold approximately 3,500 patents covering a large number of innovations and product ideas, mainly in the fields of seat belt and airbag technologies. We utilize, and have access to, the patents of our joint ventures. These patents expire on various dates during the period 2006 to 2025. We do not expect the expiration of any single patent to have a material adverse effect on our business, results of operations and financial condition.

Although we believe that our products and technology do not infringe the proprietary rights of others, there can be no assurance that third parties will not assert infringement claims against us in the future. There can also be no assurance that any patents now owned by us will afford protection against competitors that develop similar technology.

The cyclicality of automotive production and sales could adversely affect our business.

Our customers are automobile manufacturers whose production volumes are dependent upon general economic conditions and the level of consumer spending. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences. In addition, automotive production and sales can be affected by labor relations issues, regulatory requirements, trade agreements and other factors. The volume of automotive production in our most important markets in Europe, North America, and Asia has fluctuated, sometimes significantly, from year to year, and such fluctuations give rise to fluctuations in the demand for our products. Any significant economic decline that results in a reduction in automotive production and sales by our customers could have a material adverse effect on our business, results of operations and financial condition.

Our business could be materially and adversely affected if we lost any of our largest customers.

As a result of the high market concentration, we are dependent on a relatively small number of automobile manufacturers with strong purchasing power. Our three largest customers represented 48% of our combined sales for 2005, with Ford (including Volvo) accounting for 21%, Renault/Nissan accounting for 14% and GM companies accounting for 13%. Our largest contract accounted for 5% of our total fiscal 2005 sales. This contract is due to expire in 2009. Although business with any given customer is typically split into several contracts (usually one contract per vehicle model), the loss of all of the business of certain customers could have a material adverse effect on our business, results of operations and financial condition.

In addition, automobile manufacturers seek competitive quotes from suppliers and demand significant price reductions over a product's life cycle. In line with our customers' purchasing strategies, we have implemented cost-saving programs that management believes will help reduce our own material, production and administrative costs.

Information concerning our major customers is included in the section "Creating Shareholder Value" on page 13 and in Note 19 of the Consolidated Financial Statements on page 50 of the Annual Report, and is incorporated herein by reference.

Escalating pricing pressures from our customers may adversely affect our business.

Our industry has been characterized by pricing pressure from customers in recent years. This trend is partly attributable to the major automobile manufacturers' strong purchasing power. Similar to other automobile component manufacturers, we expect to quote, under certain circumstances, fixed or maximum prices for long-term supply arrangements. Our future profitability will depend upon, among other things, our ability to continue to reduce our per unit costs and maintain a cost structure, internally and with our suppliers, that will enable us to remain cost-competitive. Our profitability may also be influenced by our success in designing and marketing technological improvements in car occupant restraint systems. If we are unable to offset continued price reductions through improved operating efficiencies and reduced expenditures, these price reductions may have a material adverse effect on our business, results of operations and financial condition.

Additional information on pricing pressure is included in the "Management's Discussion and Analysis" section "Risks and Risk Management" on page 29 of the Annual Report and is incorporated herein by reference.

We may incur material losses and costs as a result of product liability and warranty and recall claims that may be brought against us.

We face an inherent business risk of exposure to product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. Accordingly, we could experience material warranty or product liability losses in the future and incur significant costs to defend these claims.

In addition, if any of our products are or are alleged to be defective, we may be required to participate in a recall involving such 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. A recall claim or a product liability claim brought against us in excess of our available insurance may have a material adverse effect on our 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 us responsible for some or all of the repair or replacement costs of defective products under new vehicle warranties, when the product supplied did not perform as represented. Accordingly, the future costs of warranty claims by our customers may be material. However, we believe our established reserves are adequate to cover potential warranty settlements. Our warranty reserves are based upon our best estimates of amounts necessary to settle future and existing claims. Although we regularly evaluate the appropriateness of these reserves, and adjust them when appropriate, the final amounts determined to be due related to these matters could differ materially from our recorded estimates.

Our business may be adversely affected by environmental and safety regulations or concerns.

We are subject to the requirements of environmental and occupational safety and health laws and regulations in the United States and other countries. We cannot assure you that we have been or will be at all times in complete compliance with all of these requirements, or that we will not incur material costs or liabilities in connection with these requirements in excess of amounts we have reserved. Such regulations are subject to a number of factors that are not within our control, including adverse publicity regarding the safety risks of airbags to children and small adults, domestic and foreign political developments, and litigation relating to our products and our competitors' products. In addition, these requirements are complex, subject to change and have tended to become more and more stringent. Accordingly, we cannot provide assurance that such requirements will not change or become more stringent in the future.

To reduce our exposure to environmental risk, we implemented an environmental plan in 1996 based on our environmental policy. According to the plan, we sought to certify according to ISO 14001, an international standard for environmental management systems, all our plants and units. To date, 57 of our facilities, representing more than 95% of our consolidated sales, have been certified according to ISO 14001.

We have no pending material environmental related issues. We have however made and will continue to make capital and other expenditures to comply with environmental requirements. There can be no assurance that those regulatory developments or adverse publicity will not adversely affect customer demand for our automotive safety products. Such changes could also result in slower increases, or in decreases, in demand for automotive safety products in other countries.

Additional information relating to our environmental management is included in the "Corporate Social Responsibility" section "Environment - A Competitive Tool" on page 19 of the Annual Report and is incorporated herein by reference.

Loss of market share by domestic vehicle manufacturers may adversely affect our results in the future.

In recent years, the Big Three (Ford Motor Company, General Motors Corporation and the Chrysler unit of DaimlerChrysler AG) have seen a decline in their market share for vehicle sales in North America and Europe, with Asian automobile manufacturers increasing their share in such markets. Although we do have business with the Asian automobile manufacturers, a portion of our customer base derives from the Big Three. Accordingly, if this trend of Big Three loss in market share should continue and our share of business with Asian vehicle manufacturers does not increase, our results could be adversely affected.

Work stoppages or other labor issues at our customers' facilities or at our facilities could adversely affect our operations.

If any of our customers experience a material work stoppage, that customer may halt or limit the purchase of our products. This could cause us to shut down production facilities relating to those products, which could have a material adverse effect on our business, results of operations and financial condition. While labor contract negotiations at our locations historically have rarely resulted in work stoppages, we cannot assure you that we will be able to negotiate acceptable contracts with these unions or that our failure to do so will not result in work stoppages. A work stoppage at one or more of our plants may have a material adverse effect on our business.

Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.

Our ability to operate our business and implement our strategies effectively depends, in part, on the efforts of our executive officers and other key employees. In addition, our future success will depend on, among other factors, our ability to attract and retain other qualified personnel, particularly engineers and other employees with electronics and software expertise. The loss of the services of any of our key employees or the failure to attract or retain other qualified personnel could have a material adverse effect on our business.

We operate in highly competitive markets.

The markets in which we operate are highly competitive. We compete with a number of other manufacturers that produce and sell similar products. Our products primarily compete on the basis of price, manufacturing and distribution capability, product design, product quality, product delivery and product service. Some of our competitors are companies, or divisions, units or subsidiaries of companies, that are larger and have greater financial and other resources than we do. Our products may not be able to compete successfully with the products of our competitors. In addition, our competitors may foresee the course of market development more accurately than we do, develop products that are superior to our products, have the ability to produce similar products at a lower cost than we can or adapt more quickly than we do to new technologies or evolving regulatory, industry or customer requirements. As a result, our products may not be able to compete successfully with their products. We may encounter increased competition in the future from existing competitors or new competitors.

We may be unable to make the technological advances necessary to carry out product innovations sufficient to meet our customers' demands.

Certain areas of our business, in particular restraint and protection systems utilizing airbags, are subject to technological change. While we believe that, through our research and development activities, our product range will keep pace with changing technologies, there can be no assurance that products or technologies developed by others will not reduce the competitiveness of our products.

ITEM 3. 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 litigations to which the Company is currently 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 any material product liability or other losses in the future.

In December 2003, a U.S. Federal District Court awarded a supplier of Autoliv ASP, Inc. approximately $27 million plus pre-judgment interest of $6 million in connection with a commercial dispute. Autoliv has appealed the verdict and the supplier has cross-appealed in regard to the calculation of the amount of pre-judgment interest. The appeal and the cross-appeal are currently pending before the United States Court of Appeals for the Federal Circuit. Briefing before the Court of Appeals is completed, but oral argument has not yet been scheduled. While legal proceedings are subject to inherent uncertainty, Autoliv believes that it has meritorious grounds for appeal, which would result in a new trial if we are successful, and that it is possible that the judgment could be eliminated or substantially altered as a result of the appeal process. Consequently, in the opinion of the Company's management, it is not possible to determine the final outcome of this litigation at this time. Autoliv cannot be assured that the final outcome of this litigation will not result in a loss that will have to be recorded by the Company.

The Company believes that it is currently adequately insured against product and other liability risks, at levels sufficient to cover potential claims, but Autoliv cannot assure that the level of coverage will be sufficient in the future or that such coverage will be available on the market.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders of Autoliv during the fourth quarter of 2005.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Information concerning the market for Autoliv's common stock including the relevant trading market, and approximate number of shareholders is included in the section titled "The Autoliv Share" on pages 58 and 59 of the Annual Report and is incorporated herein by reference. Information on the Company's dividend payments is included on page 25 of the Annual Report and is also incorporated by reference. The table below contains recent share prices and dividends declared and paid for the two most recent years.

Autoliv has only equity compensation plans approved by stockholders. Information about the Company's equity compensation plans is included on page 17 of the 2005 Proxy Statement and is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Selected financial data for the five years ended December 31, 2005 is included on page 61 of the Annual Report and is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations for the three years ended December 31, 2005 is included on pages 21 through 31 of the Annual Report and is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Quantitative and Qualitative Disclosures about market risk are included in the Management's Discussion and Analysis section "Risks and Risk Management" on pages 29 through 31 of the Annual Report and are incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Balance Sheets of Autoliv as of December 31, 2005 and 2004 and the Consolidated Statements of Income and Cash Flows and Statements of Shareholders' Equity for each of the three years in the period ended December 31, 2005, the Notes to the Consolidated Financial Statements, and the Report of the Independent Registered Public Accounting Firm are included on pages 33 through 51 of the Annual Report and are incorporated herein by reference.

All of the schedules specified under Regulation S-X to be provided by Autoliv have been omitted either because they are not applicable, are not required or the information required is included in the financial statements or notes thereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes and have been no disagreements with the independent auditors regarding accounting or financial disclosure matters.

ITEM 9A. CONTROLS AND PROCEDURES

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors:

Information concerning the directors and nominees for re-election of directors of Autoliv is included on pages 5-8 in the 2006 Proxy Statement and is incorporated herein by reference.

Executive Officers of the registrant:

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 regarding executive compensation for the year ended December 31, 2005 is included under the caption "Executive Compensation" on pages 12 through 18 of the 2006 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 regarding beneficial ownership of Autoliv's common stock is included under the caption "Voting Securities and Principal Holders Thereof" on page 11 of the 2006 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 regarding Related Transactions is included under the caption "Summary Compensation Table" on page 15 of the 2006 Proxy Statement, and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 9 (e) of Schedule 14A regarding principal accounting fees and the information required by Item 14 regarding the pre-approval process of services provided to Autoliv is included under the caption "Ratification of Appointment of Independent Auditors" on pages 18-19 of the 2006 Proxy Statement and is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents Filed as Part of this Report

Financial Statements

The following consolidated financial statements are included on pages 33 through 50 of the Annual Report and Selected Financial Data is included on page 61 of the Annual Report and are incorporated herein by reference:

(i) Consolidated Statements of Income - Years ended December 31, 2005, 2004 and 2003 (page 33); (ii) Consolidated Balance Sheets - - as of December 31, 2005 and 2004 (page 34); (iii) Consolidated Statements of Cash Flows - Years ended December 31, 2005, 2004 and 2003 (page 35); (iv) Consolidated Statements of Shareholders' Equity - as of December 31, 2005, 2004 and 2003 (page 36); (v) Notes to Consolidated Financial Statements (pages 37-50); (vi) Report of Independent Registered Public Accounting Firm (page 51).

Financial Statement Schedules

All of the schedules specified under Regulation S-X to be provided by Autoliv have been omitted either because they are not applicable, they are not required, or the information required is included in the financial statements or notes thereto.

Index to Exhibits

Description

Autoliv's Restated Certificate of Incorporation incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form S-4 (File No. 333-23813, filing date June 13, 1997) (the "Registration Statement").

Autoliv's Restated By-Laws incorporated herein by reference to Exhibit 3.2 to the Registration Statement.

Rights Agreement dated as of December 4, 1997 between Autoliv and First Chicago Trust Company of New York incorporated herein by reference to Exhibit 3 to Autoliv's Registration Statement on Form 8-A (File No. 1-12933, filing date December 4, 1997).

Facilities Agreement, dated November 13, 2000, among Autoliv, Inc. and the lenders named therein, as amended by amendment dated November 5, 2001, as further amended by amendment dated December 12, 2001, and as further amended by amendment dated June 6, 2002, is incorporated herein by reference to Exhibit 10.1 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Autoliv, Inc. 1997 Stock Incentive Plan, incorporated herein by reference to Autoliv's Registration Statement on Form S-8 (File No. 333-26299, filing date May 1, 1997)

Amendment No. 1 to Autoliv, Inc. Stock Incentive Plan, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Form of Employment Agreement between Autoliv, Inc. and its executive officers, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Form of Supplementary Agreement to the Employment Agreement between Autoliv and certain of its executive officers, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Employment Agreement, dated November 11, 1998, between Autoliv, Inc. and Lars Westerberg, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Form of Severance Agreement between Autoliv and its executive officers, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Pension Agreement, dated November 26, 1999, between Autoliv AB and Lars Westerberg, is incorporated herein by reference to Exhibit 10.3 on Form 10-K (File No. 1-12933, filing date July 2, 2002)

Form of Amendment to Employment Agreement - notice.

Form of Amendment to Employment Agreement - pension.

Form of Agreement - additional pension.

Amendment No.2 to the Autoliv, Inc. 1997 Stock Incentive Plan

Information concerning the calculation of Autoliv 's earnings per share is included in Note 1 of the Consolidated Notes to Financial Statements contained in the Annual Report and is incorporated herein by reference.

Autoliv's Annual Report to Shareholders for the fiscal year ended December 31, 2005.

Autoliv's List of Subsidiaries.

No matters were submitted to Autoliv's stockholders during the fourth quarter of 2005.

Consent of Independent Registered Public Accounting Firm.

Certification of the Chief Executive Officer and Chief Financial Officer of Autoliv, Inc.

Certification of the Chief Executive Officer and Chief Financial Officer of Autoliv, Inc.

Facilities Agreement of $1,100,000,000, dated November 7, 2005, among Autoliv Inc. and the lenders named therein

________________________
* Filed in 10-K for the fiscal year ended 2002.
** Filed in 10-K for the fiscal year ended 2003.
*** Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, as of February 28, 2006.

AUTOLIV, INC.
(Registrant)
By /s/ Magnus Lindquist

Magnus Lindquist
Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated, as of February 28, 2006.