<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1997
Or
[ ] Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
(no fee required)
For the transition period from ______________ to ____________________
Commission file number ______________________________________________
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
AUTOLIV ASP, INC.
EMPLOYEE SAVINGS AND
INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
AUTOLIV, INC.
World Trade Center
Klarabergsviadukten 70, SE-1C7 24
Stockholm, Sweden
Telephone number, including area code: +46 8 587 20 600
<PAGE> 2
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused the annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
AUTOLIV ASP, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN
----------------------------------------
(Name of Plan)
Date 6/29/98 By /s/ WILHELM KULL
------------------------ -------------------------------------
(Signature)
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
<PAGE> 3
Audited Financial Statements
Autoliv ASP, Inc.
Employee Savings and
Investment Plan
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
<PAGE> 4
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Financial Statements
Years ended December 31, 1997 and 1996
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors.....................................................1
Financial Statements
Statement of Net Assets Available for Benefits,
With Fund Information - December 31, 1997.......................................2
Statement of Net Assets Available for Benefits,
With Fund Information - December 31, 1996.......................................3
Statement of Changes in Net Assets Available for Benefits,
With Fund Information - Period December 31, 1997................................4
Statement of Changes in Net Assets Available for Benefits,
With Fund Information - Period December 3 1, 1996...............................5
Notes to Financial Statements......................................................6
</TABLE>
<PAGE> 5
Report of Independent Auditors
Savings Trust Investment Committee
and Savings Plan Administrative Committee
Autoliv ASP, Inc.
We have audited the accompanying statements of net assets available for benefits
of the Autoliv ASP, Inc. Employee Savings and Investment Plan as of December 31,
1997 and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended in conformity with generally accepted
accounting principles.
The Fund Information in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
Fund Information has been subjected to the auditing procedures applied in our
audits of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 19, 1998
1
<PAGE> 6
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------
LARGE
COMPANY
FIXED PRE-MIXED PRE-MIXED PRE-MIXED EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Autoliv, Inc. $ -- $ -- $ -- $ -- $ --
Other -- 224,114 837,278 2,251,097 26,674,584
-------------------------------------------------------------------------------
224,114 837,278 2,251,097 26,674,584
Group annuity
contracts 30,774,598 321,426 532,954 544,065 --
Common trust
funds -- -- -- -- --
Loans to
participants -- -- -- -- --
-------------------------------------------------------------------------------
Total investments 30,774,598 545,540 1,370,232 2,795,162 26,674,584
Accrued interest
receivable 92,458 -- -- -- --
-------------------------------------------------------------------------------
Assets available
for benefits $30,867,056 $ 545,540 $ 1,370,232 $ 2,795,162 $26,674,584
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------------------------------
INTERNATIONAL SMALL
COMPANY COMPANY AUTOLIV, INC.
EQUITY EQUITY STOCK LOAN
INDEX FUND INDEX FUND FUND FUND TOTAL
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Autoliv, Inc. $ -- $ -- $13,105,732 $ -- $13,105,732
Other 1,217,738 4,920,031 -- -- 36,124,842
--------------------------------------------------------------------------------
1,217,738 4,920,031 13,105,732 -- 49,230,574
Group annuity
contracts -- -- -- -- 32,173,043
Common trust
funds -- -- 286,974 -- 286,974
Loans to
participants -- -- -- 6,339,529 6,339,529
--------------------------------------------------------------------------------
Total investments 1,217,738 4,920,031 13,392,706 6,339,529 88,030,120
Accrued interest
receivable -- -- -- -- 92,458
--------------------------------------------------------------------------------
Assets available
for benefits $ 1,217,738 $ 4,920,031 $13,392,706 $ 6,339,529 $88,122,578
================================================================================
</TABLE>
See notes to financial statements.
2
<PAGE> 7
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1996
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------------
LARGE
COMPANY
FIXED PRE-MIXED PRE-MIXED PRE-MIXED EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Morton International, Inc. -- -- -- -- --
Other 15,313 418,944 986,273 2,637,923 60,440,357
------------------------------------------------------------------------------------------
15,313 418,944 986,273 2,637,923 60,440,357
Group annuity contracts 122,474,590 597,125 622,038 623,559 --
Common trust funds 4,659,878 38,106 59,848 121,890 306
Loans to participants
------------------------------------------------------------------------------------------
Total investments 127,149,781 1,054,175 1,668,159 3,383,372 60,440,663
Accrued interest receivable -- -- -- -- --
Due (to) from other funds 64,807 -- -- 44,042 (24,312)
------------------------------------------------------------------------------------------
Total assets 127,214,588 1,054,175 1,668,159 3,427,414 60,416,351
LIABILITIES
Loans payable 40,476 -- -- 556 13,583
------------------------------------------------------------------------------------------
Net assets available for
benefits $ 127,174,112 $ 1,054,175 $ 1,668,159 $ 3,426,858 $ 60,402,768
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------------
INTERNATIONAL SMALL
COMPANY COMPANY MORTON
EQUITY EQUITY INTERNATIONAL
INDEX FUND INDEX FUND STOCK FUND LOAN FUND TOTAL
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Morton International, Inc. -- -- 112,373,846 -- 112,373,846
Other 2,536,588 3,973,439 -- -- 71,008,837
-------------------------------------------------------------------------------------------
2,536,588 3,973,439 112,373,846 -- 183,382,683
Group annuity contracts -- -- -- -- 124,317,312
Common trust funds 3 5 716,943 -- 5,596,979
Loans to participants 13,111,369 13,111,369
-------------------------------------------------------------------------------------------
Total investments 2,536,591 3,973,444 113,090,789 13,111,369 326,408,343
Accrued interest receivable -- -- 4,195 -- 4,195
Due (to) from other funds (549) 2,561 (86,549) -- --
-------------------------------------------------------------------------------------------
Total assets 2,536,042 3,976,005 113,008,435 13,111,369 326,412,538
LIABILITIES
Loans payable 110 226 69,949 -- 124,900
-------------------------------------------------------------------------------------------
Net assets available for
benefits $ 2,535,932 $ 3,975,779 $ 112,938,486 $ 13,111,369 $ 326,287,638
===========================================================================================
</TABLE>
See notes to financial statements.
3
<PAGE> 8
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
----------------------------------------------------------------------------------------------
LARGE INTERNATIONAL
COMPANY COMPANY
FIXED PRE-MIXED PRE-MIXED PRE-MIXED EQUITY EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND INDEX FUND
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 1,675,079 $ 45,930 $ 94,026 $ 173,243 $ 1,131,902 $ 80,624
Contributions by participants 4,415,897 126,935 274,281 500,065 3,341,713 255,460
Rollover contributions by
participants 250,545 38,496 144,190 110,506 248,404 40,818
Dividend income -- -- -- -- -- --
Interest Income 3,289,602 64,292 181,035 361,441 123,452 8,168
----------------------------------------------------------------------------------------------
Total contributions and
investment income 9,631,123 275,653 693,532 1,145,255 4,845,471 385,070
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments (395,248) (4,128) (6,845) (6,987) 9,075,158 (16,377)
Withdrawals (4,900,377) (18,579) (69,664) (81,940) (1,834,512) (89,215)
Loans to participants:
New loans (1,994,939) (24,702) (75,167) (81,558) (1,307,621) (40,727)
Loan repayments (principal) 1,122,980 16,350 52,246 76,606 590,523 42,492
----------------------------------------------------------------------------------------------
Net loans to participants (871,959) (8,352) (22,921) (4,952) (717,098) 1,765
Transfers by participants 8,142,989 431,828 680,138 1,427,842 7,264,944 899,411
Plan Transfers (107,913,584) (1,185,057) (1,572,167) (3,110,914) (52,362,147) (2,498,848)
Net increase (decrease) (96,307,056) (508,635) (297,926) (631,696) (33,728,184) (1,318,194)
Net assets available for
benefits at beginning of period 127,174,112 1,054,175 1,668,159 3,426,858 60,402,768 2,535,932
----------------------------------------------------------------------------------------------
Net assets available for
benefits at end of period $ 30,867,056 $ 545,540 $ 1,370,232 $ 2,795,162 $ 26,674,584 $ 1,217,738
==============================================================================================
</TABLE>
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
SMALL
COMPANY MORTON AUTOLIV, INC.
EQUITY INTERNATIONAL STOCK LOAN
INDEX FUND STOCK FUND FUND FUND TOTAL
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 154,168 $ 1,051,108 $ 887,717 $ -- $ 5,293,797
Contributions by participants 484,731 2,973,456 2,376,260 -- 14,748,798
Rollover contributions by
participants 80,743 158,489 45,726 -- 1,117,917
Dividend income -- 673,384 82,541 724,852 1,480,777
Interest Income 14,695 145,605 131,451 (686,983) 3,632,758
-----------------------------------------------------------------------------
Total contributions and
investment income 734,337 5,002,042 3,523,695 37,869 26,274,047
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments 62,296 (2,881,317) (1,573,147) -- 4,253,405
Withdrawals (149,888) (2,787,150) (574,732) (418,713) (10,924,770)
Loans to participants:
New loans (79,349) (1,940,800) (696,167) 6,241,030 --
Loan repayments (principal) 127,367 702,508 680,429 (3,411,501) --
-----------------------------------------------------------------------------
Net loans to participants 48,018 (1,238,292) (15,738) 2,829,529 --
Transfers by participants 4,025,126 (25,834,470) 2,962,192 -- --
Plan Transfers (3,775,637) (85,199,299) 9,070,436 (9,220,525) (257,767,742)
Net increase (decrease) 944,252 (112,938,486) 13,392,706 (6,771,840) (238,165,060)
Net assets available for
benefits at beginning of period 3,975,779 112,938,486 -- 13,111,369 326,287,638
-----------------------------------------------------------------------------
Net assets available for
benefits at end of period $ 4,920,031 $ -- $ 13,392,706 $ 6,339,529 $ 88,122,578
=============================================================================
</TABLE>
See notes to financial statements.
4
<PAGE> 9
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
LARGE
COMPANY
FIXED PRE-MIXED PRE-MIXED PRE-MIXED EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND
INVESTMENT INCOME
Contributions by Morton
International, Inc. $ 3,098,343 $ 27,879 $ 67,202 $ 125,934 $ 1,768,466
Contributions by participants 8,495,031 83,960 193,784 369,303 5,306,711
Rollover contributions by
participants 247,284 15,630 126,739 77,248 208,693
Dividend income 252 -- -- -- --
Interest income 8,322,797 41,983 45,860 54,633 133,333
------------------------------------------------------------------------------------------
Total contributions and
investment income 20,163,707 169,452 433,585 627,118 7,417,203
Net realized and unrealized
appreciation (depreciation)
in fair value of investments (2,961,141) 25,905 107,754 284,053 10,645,024
Withdrawals by participants (9,293,966) (14,898) (7,716) (19,118) (3,042,676)
New loans (3,613,902) (5,448) (14,504) (50,330) (1,202,528)
Loan repayments 1,844,531 15,238 22,840 69,752 790,780
------------------------------------------------------------------------------------------
Net loans to participants (1,769,371) 9,790 8,336 19,422 (411,748)
Transfers by participants (8,123,211) 863,926 1,126,200 2,515,383 1,285,449
Transfers by participants from
other plans 3,409 -- -- -- 1,624
------------------------------------------------------------------------------------------
Net increase (decrease) (211,202) 1,054,175 1,668,159 3,426,858 15,894,876
Net assets available for benefits
at beginning of period 129,154,685 -- -- -- 44,507,892
------------------------------------------------------------------------------------------
Net assets available for
benefits at end of period $ 127,174,112 $ 1,054,175 $ 1,668,159 $ 3,426,858 $ 60,402,768
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL SMALL
COMPANY COMPANY MORTON
EQUITY EQUITY INTERNATIONAL LOAN
INDEX FUND INDEX FUND STOCK FUND FUND TOTAL
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND
INVESTMENT INCOME
Contributions by Morton
International, Inc. $ 70,522 $ 107,746 $ 3,235,872 $ -- $ 8,501,964
Contributions by participants 231,142 350,366 9,221,002 -- 24,251,299
Rollover contributions by
participants 40,387 89,143 296,991 -- 1,102,115
Dividend income -- -- 1,510,452 -- 1,510,704
Interest income 7,197 8,452 344,091 -- 8,958,346
-----------------------------------------------------------------------------------------
Total contributions and
investment income 349,248 555,707 14,608,408 -- 44,324,428
Net realized and unrealized
appreciation (depreciation)
in fair value of investments 122,141 222,226 13,095,516 -- 21,541,478
Withdrawals by participants (13,255) (18,024) (5,817,873) -- (18,227,526)
New loans (39,445) (60,660) (4,148,160) 9,134,977 --
Loan repayments 40,442 44,012 2,044,852 (4,872,447) --
-----------------------------------------------------------------------------------------
Net loans to participants 997 (16,648) (2,103,308) 4,262,530 --
Transfers by participants 2,076,801 3,232,518 (2,977,066) -- --
Transfers by participants from
other plans -- -- 2,069 -- 7,102
-----------------------------------------------------------------------------------------
Net increase (decrease) 2,535,932 3,975,779 16,807,746 4,262,530 47,645,482
Net assets available for benefits
at beginning of period -- -- 96,130,740 8,848,839 278,642,156
-----------------------------------------------------------------------------------------
Net assets available for
benefits at end of period $ 2,535,932 $ 3,975,779 $ 112,938,486 $ 13,111,369 $ 326,287,638
=========================================================================================
</TABLE>
See notes to financial statements.
5
<PAGE> 10
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements
December 31, 1997
1. PLAN FORMATION AND TRANSFERS RESULTING FROM THE SPIN-OFF OF BUSINESSES
Effective May 1, 1997, Morton International, Inc. spun off its specialty
chemicals and salt businesses to create a new company renamed Morton
International, Inc. The remaining portion of the original Morton International,
Inc., representing the airbag business was renamed Autoliv ASP, Inc. and
combined with Autoliv AB creating Autoliv, Inc. As a result of the spin-off,
certain assets and liabilities were transferred from the Morton International,
Inc. Employee Savings and Investment Plan (subsequently renamed the Autoliv ASP,
Inc. Employee Savings and Investment Plan) (the Plan), to the new Morton
International, Inc. Employee Savings and Investment Plan which was formed
effective May 1, 1997. Assets transferred from the Trust were based on
transferred participants' account balances as of April 30, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
All of the Plan investments are held by the new Autoliv ASP, Inc. Master Savings
Trust (the Trust) dated April 30, 1997. The Trust invests the assets of the
employee savings plan of Autoliv ASP, Inc. (the Company). The Northern Trust
Company is the trustee of the Trust and custodian of the Autoliv ASP, Inc. stock
fund. The State Street Global Advisors is the Plan's record keeper.
The majority of administrative and general expenses of the Plan are paid by the
Company.
Investments in the common stock of the Company are recorded at fair market
value.
Effective April 1, 1996, investments in the Trust are valued daily rather than
monthly. The Equity Index Fund was renamed the Large Company Equity Index Fund;
the Company Stock Fund was renamed the Morton International Stock Fund (renamed
the Autoliv ASP, Inc. Stock Fund); and two new funds were added: the Small
Company Equity Index Fund and the International Equity Index Fund. In addition,
three pre-mixed investment options were added which are comprised of a stated
percentage of the three equity funds and the Fixed Return Fund.
6
<PAGE> 11
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets of the Fixed Return Fund are recorded at fair value. In determining fair
value, investments included in this fund are not subject to established, fixed
market pricing. Since such securities are not exchange traded, pricing is not
readily verifiable. Instead, pricing is provided by independent fixed income
pricing services.
Short-term common trust fund units are purchased daily for any uninvested cash
held in the Trust. These units are valued at par, which is equal to redemption
value.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Certain reclassifications have been made to the 1996 financial statements to
conform with the 1997 presentation.
3. DESCRIPTION OF THE PLAN
The Plan is a defined-contribution plan established to provide eligible
employees with an incentive to make systematic savings for retirement from
current income through payroll deductions and to afford them an opportunity to
acquire an equity interest in the Company.
All domestic employees (other than those covered by a collective bargaining
agreement, which does not provide for Plan participation) of the Company are
eligible to participate in the Plan. Employees become participants without
satisfying any service requirements.
Participation in the Plan is voluntary. Participants make contributions to the
Plan for any whole percentage up to a maximum of 14% of base pay, not to exceed
the Internal Revenue Service limit. The Company contributes an amount equal to
50% of the first 6% of participants' contributions, adjusted for any current
forfeitures and reinstatement of prior forfeitures. Participants can elect to
treat their contributions on a before and/or after-tax basis.
7
<PAGE> 12
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
3. DESCRIPTION OF THE PLAN (CONTINUED)
Participants' Company contributions are allocated among the investment funds in
accordance with participants' elections. Participants may transfer amounts from
one investment fund to another.
Participants are 100% vested in their contributions together with earnings, if
any, thereon. Company contributions and earnings thereon become vested as
follows:
YEARS OF VESTING PERCENTAGE
SERVICE IN PLAN VESTED
- ----------------------------------------------------------------
Less than 1 0%
1 but less than 2 33
2 but less than 3 66
3 or more 100
Notwithstanding the preceding schedule, Company contributions will become 100%
vested upon death, total disability from performing normal duties, or
termination of employment when eligible to retire under the provisions of a
qualified Company pension plan.
That portion of the participants' Company contribution accounts which is not
vested at the time of termination of employment is forfeited, amounts forfeited
are applied to subsequent Company contributions under the Plan. Forfeitures are
restored within 30 days of reemployment once certain conditions are met.
Active participants may obtain loans from the Plan. The maximum loan amount is
subject to certain Internal Revenue Service and Plan restrictions, and each loan
is secured by the participant's account balance. The interest rate on loans is
the Trustee's prime rate plus 1%. Loan interest rates are reviewed monthly and
adjusted prospectively.
The Company has the right to terminate, amend, modify, or suspend the Plan at
any time. In the event the Plan is terminated, the entire value of the
investment funds shall be applied for the exclusive benefit of participants, and
no part of the funds will revert to the Company. Upon termination of the Plan,
the Company will have no obligation to continue making contributions to the
Plan, and the Company contribution account for each participant will become 100%
vested and nonforfeitable.
8
<PAGE> 13
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
4. INVESTMENTS
A description of the investment funds follows:
AUTOLIV ASP, INC. STOCK FUND
This fund is invested only in the common stock of Autoliv, Inc. which
participants in the old Morton International Stock Fund received as part of the
spin-off of the new Company (see Note 1). This fund's performance depends almost
entirely on the performance of Autoliv, Inc. common stock. As with any other
stock, the market value of Autoliv, Inc. common stock can fluctuate and
participants' investments in this fund can increase or decrease in value.
Participants are also permitted to invest future contributions in this fund or
transfer any portion of their account balances not already invested in the
Autoliv ASP, Inc. Stock Fund to this fund.
LARGE COMPANY EQUITY INDEX FUND
This fund is composed of 500 stocks selected as representative of all major
industries in the broad domestic U.S. economy. The S&P 500 Index is a
market-capitalization weighted index. The Large Company Index Fund provides
diversified large-capitalization stock market returns, which mirror the risk and
return characteristics of the S&P 500 Index.
SMALL COMPANY EQUITY INDEX FUND
This fund is composed of securities number 1,001 to 3,000 in capitalization
rankings of the Frank Russell Company's Russell 3000 Index of the largest 3,000
U.S. stocks by market capitalization. The Russell 2000 represents approximately
10% of all stocks comprising the outstanding capitalization of the Russell 3000.
This fund provides diversified small capitalization stock U.S. market exposure
replicating the risk and return characteristics of the Russell 2000 Index.
INTERNATIONAL EQUITY INDEX FUND
This fund is composed of approximately 1,000 companies in 20 countries. The
Morgan Stanley Capital Investments (MSCI) EAFE Index is the most widely followed
measure of performance in the equity markets outside the U.S. Investments in
this fund provide broad-based exposure to foreign equity markets in Europe,
Australia, and the Far East. This fund is designed to mirror a modified EAFE
Index with a fixed Japan exposure of 25%.
The custodian of each of these three funds is Northern Trust Company. The
manager of all of the funds is State Street Global Administration.
9
<PAGE> 14
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
FIXED RETURN FUND
This fund's assets are in the custody of, and managed by New York Life Insurance
under group annuity contracts issued to the Trustee. The underlying assets are
separately managed and are not part of the insurance company's general account
assets. The declared effective annual yield for the year ending December 31,
1997 was 6.55% and 6.65% in 1996. The funds are primarily invested in U.S.
treasuries, high-grade corporate bonds, U.S. agency issued mortgage-backed
securities, triple A rated asset-backed securities, and commercial paper.
PRE-MIXED FUNDS A, B, AND C
These funds provide systematic investment diversification by allocating fund
assets in preset percentages among four of the other investment options. These
include the Fixed Return Fund the Large Company Index Fund, the International
Equity Index Fund, and the Small Company Equity Index Fund. Participants'
accounts are allocated to each of the component funds in accordance with preset
asset mixes. These funds differ in the proportion of funds held to coincide with
conservative, moderate and aggressive pre-mixed portfolios.
10
<PAGE> 15
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
During 1997 and 1996, the Plan's investments appreciated (depreciated) in value
as follows:
<TABLE>
<CAPTION>
NET REALIZED
AND UNREALIZED
APPRECIATION
(DEPRECIATION)
IN FAIR VALUE
DURING THE
PERIOD FAIR VALUE
--------------------------------
<S> <C> <C>
DECEMBER 31, 1997
Fair value as determined by quoted market prices: Common stocks:
Autoliv, Inc. $ (1,539,438) $ 13,105,732*
Other 6,221,800 36,124,842
Fair value as determined by independent pricing services:
Group annuity contracts (395,248) 32,173,043*
Fair value determined to be redemption or contract value:
Common trust funds (33,709) 286,974
Estimated fair values:
Loans to participants -- 6,339,529*
------------- -------------
$ 4,253,405 $ 88,030,120
============= =============
DECEMBER 31, 1996
Fair value as determined by quoted market prices: Common stocks:
Morton International, Inc. $ 13,095,516 $ 112,373,846*
Other 11,334,816 71,008,837*
Fair value as determined by independent pricing services:
Group annuity contracts (2,888,854) 124,317,312*
Fair value determined to be redemption or contract value:
Common trust funds -- 5,596,979
Estimated fair values:
Loans to participants -- 13,111,369
------------- -------------
$ 21,541,478 $ 326,408,343
============= =============
</TABLE>
*Represents 5% or more of the fair value of net assets available for benefits.
11
<PAGE> 16
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
5. MASTER SAVINGS TRUST SUMMARY
The total fair value and investment income of the Trust and the Plan's
percentage interest in the Trust at December 31, 1997 and 1996, and for the year
then ended are as follows:
<TABLE>
<CAPTION>
TOTAL PLAN'S TOTAL
FAIR VALUE PERCENTAGE FAIR VALUE
OF THE TRUST INTEREST IN OF THE PLAN
INVESTMENTS THE TRUST INVESTMENTS
------------------------------------------------------------
<S> <C> <C> <C>
DECEMBER 31, 1997
Fair value as determined by quoted market prices: Common stocks:
Autoliv, Inc. $ 13,105,732 100% $ 13,105,732
Other 36,124,842 100 36,124,842
Fair value as determined by independent pricing services:
Group annuity contracts 32,173,043 100 32,173,043
Fair value determined to be redemption or
contract value:
Common trust funds 286,974 100 286,974
Estimated fair value:
Loans to participants 6,339,529 N/A 6,339,529
--------------- ---------------
$ 88,030,120 $ 88,030,120
=============== ===============
DECEMBER 31, 1996
Fair value as determined by quoted market prices: Common stocks:
Morton International, Inc. $ 117,580,172 95.57% $ 112,373,846
Other 74,453,072 95.37 71,008,837
Fair value as determined by independent pricing services:
Group annuity contracts 129,721,532 95.83 124,317,312
Fair value determined to be redemption or
contract value:
Common trust funds 5,839,202 95.85 5,596,979
Estimated fair value:
Loans to participants 13,240,265 N/A 13,111,369
--------------- ---------------
$ 340,834,243 $ 326,408,343
=============== ===============
</TABLE>
12
<PAGE> 17
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
5. MASTER SAVINGS TRUST SUMMARY (CONTINUED)
<TABLE>
<CAPTION>
PLAN'S
TOTAL TRUST PERCENTAGE TOTAL PLAN
INVESTMENT INTEREST IN INVESTMENT
INCOME THE TRUST INCOME
-----------------------------------------------------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1997
Dividend income $ 1,480,777 100% $ 1,480,777
Interest income 3,632,758 100 3,632,758
Net realized and unrealized appreciation in
fair value of investments 4,253,405 100 4,253,405
-------------- --------------
$ 9,366,940 $ 9,366,940
============== ==============
YEAR ENDED DECEMBER 31, 1996
Dividend income $ 1,580,778 95.57% $ 1,510,704
Interest income 9,622,089 96.10 8,958,346
Net realized and unrealized appreciation in
fair value of investments 22,656,680 95.07 21,541,478
-------------- --------------
$ 33,559,547 $ 32,010,528
============== ==============
</TABLE>
6. FEDERAL INCOME TAXES
The Company has received a favorable letter of determination from the Internal
Revenue Service stating that the Plan qualifies under section 401(a) of the
Internal Revenue Code (IRC), as amended by ERISA, and is, therefore, not subject
to tax under present income tax law. The Plan is required to operate in
conformity with the IRC to maintain its qualification. The Savings Trust
Investment Committee and Savings Plan Administrative Committee are not aware of
any course of action or series of events that have occurred that might adversely
affect the Plan's qualified status.
7. TRANSACTIONS WITH PARTIES IN INTEREST
During 1997 and 1996, the Plan received dividends from the Company or it's
predecessor of $1,480,779 and $1,510,452, respectively.
13
<PAGE> 18
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
----------------------------------
<S> <C> <C>
Net assets available for benefits per the
financial statements $ 88,122,578 $ 326,287,633
Amounts allocated to withdrawing participants -- (239,873)
------------- -------------
Net assets available for benefits per the 5500 $ 88,122,578 $ 326,047,760
============= =============
</TABLE>
The following is a reconciliation of withdrawals by participants per the
financial statement to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996
---------------------------------
<S> <C> <C>
Withdrawal by participants per the financial statements $ 10,924,770 $ 18,227,526
Add: Amounts allocated to withdrawing
participants at end of year -- 239,873
Less: Amounts allocated to withdrawing
participants at beginning of year (239,873) (1,890,286)
------------ ------------
Withdrawals by participants per the Form 5500 $ 10,684,897 $ 16,577,113
============ ============
</TABLE>
14
<PAGE> 19
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements (continued)
9. YEAR 2000 ISSUE (UNAUDITED)
The Plan sponsor has developed a plan to modify its internal information
technology to be ready for the year 2000 and has begun converting critical data
processing systems. The project also includes determining whether third-party
service providers have reasonable plans in place to become year 2000 compliant.
The Plan sponsor currently expects the project to be substantially complete by
early 1999. The Plan sponsor does not expect this project to have a significant
effect on plan operations.
15
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-26303) pertaining to the Autoliv ASP, Inc. Employee Savings and
Investment Plan of our report dated June 19, 1998, with respect to the financial
statements and schedules of the Autoliv ASP, Inc. Employee Savings and
Investment Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1997.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 24, 1998
