<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, 1998
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 6/30/99 By /s/ HANS BIORCK
------------------------ -------------------------------------
(Signature)
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
<PAGE> 3
Audited Financial Statements
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE> 4
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Financial Statements
Years ended December 31, 1998 and 1997
<TABLE>
CONTENTS
<S> <C>
Report of Independent Auditors.........................................1
Financial Statements
Statement of Net Assets Available for Benefits,
With Fund Information - December 31, 1998...........................2
Statement of Net Assets Available for Benefits,
With Fund Information - December 31, 1997...........................3
Statement of Changes in Net Assets Available for Benefits,
With Fund Information - Period December 31, 1998....................4
Statement of Changes in Net Assets Available for Benefits,
With Fund Information - Period December 31, 1997....................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,
1998 and 1997, 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, 1998 and 1997, 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 basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
June 16, 1999
<PAGE> 6
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1998
FUND INFORMATION
-----------------------------------------------------------------------
LARGE
FIXED PRE-MIXED PRE-MIXED PRE-MIXED COMPANY EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Autoliv, Inc. $ - $ - $ - $ - $ -
Other - 427,963 1,142,484 3,152,964 37,428,280
----------------------------------------------------------------------
427,963 1,142,484 3,152,964 37,428,280
Group annuity contracts 35,340,655 597,824 699,746 721,247 -
Common trust funds - - - - -
Loans to participants - - - - -
----------------------------------------------------------------------
Total investments 35,340,655 1,025,787 1,842,230 3,874,211 37,428,280
Accrued interest receivable 38,324 - - - -
----------------------------------------------------------------------
Total assets 35,378,979 1,025,787 1,842,230 3,874,211 37,428,280
LIABILITIES
Distributions payable 34,193 - - 8,036 50,787
Loans payable - - - - -
----------------------------------------------------------------------
Net assets available for benefits $35,344,786 $1,025,787 $1,842,230 $3,866,175 $37,377,493
======================================================================
</TABLE>
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1998
FUND INFORMATION
----------------------------------------------------------
INTERNATIONAL SMALL
COMPANY COMPANY AUTOLIV, INC.
EQUITY EQUITY STOCK
INDEX FUND INDEX FUND FUND LOAN FUND TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
Common stocks:
Autoliv, Inc. $ - $ - $13,515,000 $ - $ 13,515,000
Other 1,845,573 5,487,287 - - 49,484,551
------------------------------------------------------------------------
1,845,573 5,487,287 13,515,000 - 62,999,551
Group annuity contracts - - - - 37,359,472
Common trust funds - - 301,327 - 301,327
Loans to participants - - - 7,459,265 7,459,265
------------------------------------------------------------------------
Total investments 1,845,573 5,487,287 13,816,327 7,459,265 108,119,615
Accrued interest receivable - - - - 38,324
------------------------------------------------------------------------
Total assets 1,845,573 5,487,287 13,816,327 7,459,265 108,157,939
LIABILITIES
Distributions payable 3,253 6,853 19,750 - 122,872
Loans payable - - 169,659 - 169,659
------------------------------------------------------------------------
Net assets available for benefits $1,842,320 $5,480,434 $13,626,918 $7,459,265 $107,865,408
========================================================================
</TABLE>
See notes to financial statements.
2
<PAGE> 7
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1997
FUND INFORMATION
--------------------------------------------------------------------------
LARGE
FIXED PRE-MIXED PRE-MIXED PRE-MIXED COMPANY 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 - - - -
-------------------------------------------------------------------------
Total assets $30,867,056 $545,540 $1,370,232 $2,795,162 $26,674,584
=========================================================================
</TABLE>
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1997
FUND INFORMATION
------------------------------------------------------------
INTERNATIONAL SMALL
COMPANY COMPANY AUTOLIV, INC.
EQUITY EQUITY STOCK
INDEX FUND INDEX FUND FUND LOAN 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
--------------------------------------------------------------------------
Total assets $1,217,738 $4,920,031 $13,392,706 $6,339,529 $88,122,578
==========================================================================
</TABLE>
See notes to financial statements.
3
<PAGE> 8
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1998
FUND INFORMATION
--------------------------------------------------------------------------
LARGE
FIXED PRE-MIXED PRE-MIXED PRE-MIXED COMPANY EQUITY
RETURN FUND FUND A FUND B FUND C INDEX FUND
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 1,024,713 $ 51,725 $ 81,095 $ 192,531 $ 1,095,215
Contributions by participants 2,620,020 136,248 236,606 553,828 3,148,661
Rollover contributions by
participants 277,830 11,161 57,753 113,248 474,840
Dividend income 1,189 - 24 79 512
Interest income 1,773,600 77,827 254,783 546,611 170,031
-------------------------------------------------------------------------
Total contributions and
investment income 5,697,352 276,961 630,261 1,406,297 4,889,259
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments 486,059 8,249 9,632 9,873 8,060,519
Withdrawals by participants (3,914,011) (81,945) (103,281) (203,302) (2,353,464)
Loans to participants:
New loans (1,973,794) (40,670) (88,981) (178,482) (1,354,516)
Loan repayments (principal) 960,218 25,641 74,302 117,527 858,973
-------------------------------------------------------------------------
Net loans to participants (1,013,576) (15,029) (14,679) (60,955) (495,543)
Transfers by participants 3,221,906 292,011 (49,935) (80,900) 602,138
-------------------------------------------------------------------------
Net increase 4,477,730 480,247 471,998 1,071,013 10,702,909
Net assets available for benefits
at beginning of period 30,867,056 545,540 1,370,232 2,795,162 26,674,584
-------------------------------------------------------------------------
Net assets available for
benefits at end of period $35,344,786 $1,025,787 $1,842,230 $3,866,175 $37,377,493
=========================================================================
</TABLE>
<TABLE>
<CAPTION>
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year ended December 31, 1998
FUND INFORMATION
------------------------------------------------------------
INTERNATIONAL SMALL
COMPANY COMPANY AUTOLIV, INC.
EQUITY EQUITY STOCK
INDEX FUND INDEX FUND FUND LOAN FUND TOTAL
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 76,611 $ 207,729 $ 933,695 $ - $ 3,663,314
Contributions by participants 229,034 633,553 2,439,599 - 9,997,549
Rollover contributions by
participants 24,065 94,948 48,582 - 1,102,427
Dividend income 28 53 (2,383) 619,204 618,706
Interest income 7,931 29,626 184,645 (619,218) 2,425,836
-------------------------------------------------------------------------
Total contributions and
investment income 337,669 965,909 3,604,138 (14) 17,807,832
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments 265,162 (105,877) 2,017,914 - 10,751,531
Withdrawals by participants (90,777) (413,256) (1,066,201) (590,296) (8,816,533)
Loans to participants:
New loans (56,100) (187,178) (951,052) 4,830,773 -
Loan repayments (principal) 52,982 159,174 871,910 (3,120,727) -
-------------------------------------------------------------------------
Net loans to participants (3,118) (28,004) (79,142) 1,710,046 -
Transfers by participants 115,646 141,631 (4,242,497) - -
-------------------------------------------------------------------------
Net increase 624,582 560,403 234,212 1,119,736 19,742,830
Net assets available for benefits
at beginning of period 1,217,738 4,920,031 13,392,706 6,339,529 88,122,578
-------------------------------------------------------------------------
Net assets available for
benefits at end of period $1,842,320 $5,480,434 $13,626,918 $7,459,265 $107,865,408
=========================================================================
4
</TABLE>
See notes to financial statements.
<PAGE> 9
<TABLE>
<CAPTION>
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
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>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 1,675,079 $ 45,930 $ 94,026 $ 173,243 $ 1,131,902
Contributions by participants 4,415,897 126,935 274,281 500,065 3,341,713
Rollover contributions by
participants 250,545 38,496 144,190 110,506 248,404
Dividend income - - - - -
Interest Income: 3,289,602 64,292 181,035 361,441 123,452
-----------------------------------------------------------------
Total contributions and
investment income 9,631,123 275,653 693,532 1,145,255 4,845,471
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments (395,248) (4,128) (6,845) (6,987) 9,075,158
Withdrawals (4,900,377) (18,579) (69,664) (81,940) (1,834,512)
Loans to participants:
New loans (1,994,939) (24,702) (75,167) (81,558) (1,307,621)
Loan repayments (principal) 1,122,980 16,350 52,246 76,606 590,523
-----------------------------------------------------------------
Net loans to participants (871,959) (8,352) (22,921) (4,952) (717,098)
Transfers by participants 8,142,989 431,828 680,138 1,427,842 7,264,944
Plan Transfers (107,913,584)(1,185,057) (1,572,167) (3,110,914) (52,362,147)
-----------------------------------------------------------------
Net increase (decrease) (96,307,056) (508,635) (297,927) (631,696) (33,728,184)
Net assets available for
benefits at beginning of
period 127,174,112 1,054,175 1,668,159 3,426,858 60,402,768
-----------------------------------------------------------------
Net assets available for
benefits at end of period $ 30,867,056 $ 545,540 $ 1,370,232 $ 2,795,162 $26,674,584
=================================================================
</TABLE>
<TABLE>
<CAPTION>
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
FUND INFORMATION
- --------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SMALL
COMPANY EQUITY COMPANY MORTON AUTOLIV, INC.
INDEX FUND EQUITY INTERNATIONAL STOCK
INDEX FUND STOCK FUND FUND LOANS TOTAL
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS AND INVESTMENT
INCOME
Contributions by Autoliv, Inc. $ 80,624 $ 154,168 $ 1,051,108 $ 887,717 $ - $ 5,293,797
Contributions by participants 255,460 484,731 2,973,456 2,376,260 - 14,748,798
Rollover contributions by
participants 40,818 80,743 158,489 45,726 1,117,917
Dividend income - - 673,384 82,541 724,852 1,480,777
Interest Income: 8,168 14,695 145,605 131,451 (686,983) 3,632,758
-----------------------------------------------------------------------------------
Total contributions and
investment income 385,070 734,337 5,002,042 3,523,695 37,869 26,274,047
Net realized and unrealized
appreciation
(depreciation) in fair
value of investments (16,377) 62,296 (2,881,317) (1,573,147) - 4,253,405
Withdrawals (89,215) (149,888) (2,787,150) (574,732) (418,713) (10,924,770)
Loans to participants:
New loans (40,727) (79,349) (1,940,800) (696,167) 6,241,030 -
Loan repayments (principal) 42,492 127,367 702,508 680,429 (3,411,501) -
-----------------------------------------------------------------------------------
Net loans to participants 1,765 48,018 (1,238,292) (15,738) 2,829,529 -
Transfers by participants 899,411 4,025,126 (25,834,470) 2,962,192 - -
Plan Transfers (2,498,848) (3,775,637) (85,199,299) 9,070,436 (9,220,525) (257,767,742)
-----------------------------------------------------------------------------------
Net increase (decrease) (1,318,194) 944,252 (112,938,486) 13,392,706 (6,771,840) (238,165,060)
Net assets available for
benefits at beginning of
period 2,535,932 3,975,779 112,938,486 13,111,369 326,287,638
-----------------------------------------------------------------------------------
Net assets available for
benefits at end of period $ 1,217,738 $ 4,920,031 $ - $13,392,706 $ 6,339,529 $ 88,122,578
==================================================================================
</TABLE>
See notes to financial statements.
5
<PAGE> 10
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to Financial Statements
December 31, 1998
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.
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.
6
<PAGE> 11
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to the Financial Statements (continued)
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.
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:
<TABLE>
<CAPTION>
YEARS OF VESTING PERCENTAGE
SERVICE IN PLAN VESTED
- -------------------------------------------------------------------------------
<S> <C>
Less than 1 0%
1 but less than 2 33
2 but less than 3 66
3 or more 100
</TABLE>
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.
7
<PAGE> 12
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to the Financial Statements (continued)
3. DESCRIPTION OF THE PLAN (CONTINUED)
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.
4. INVESTMENTS
The Plan is part of a Master Savings Trust at December 31, 1998 and 1997. The
Plan represents 100% of the total assets of the Master Savings Trust for both
years.
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 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.
8
<PAGE> 13
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to the Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
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.
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,
1998 was 6.68% and 6.55% in 1997. 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.
9
<PAGE> 14
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to the Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
During 1998 and 1997, 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, 1998
Fair value as determined by quoted market prices:
Common stocks:
Autoliv, Inc. $ 2,003,561 $ 13,515,000*
Other 8,247,558 49,484,551
Fair value as determined by independent pricing services:
Group annuity contracts 486,059 37,359,472*
Fair value determined to be redemption or contract value:
Common trust funds 14,353 301,327
Estimated fair values:
Loans to participants -- 7,459,265*
------------- -------------
$ 10,751,531 $ 108,119,615
============= =============
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
============= =============
</TABLE>
*Represents 5% or more of the fair value of net assets available for benefits.
10
<PAGE> 15
Autoliv ASP, Inc.
Employee Savings and Investment Plan
Notes to the Financial Statements (continued)
5. FEDERAL INCOME TAXES
The Plan has received a determination letter from the Internal Revenue Service
dated August 4, 1995, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
6. TRANSACTIONS WITH PARTIES IN INTEREST
During 1998 and 1997, the Plan received dividends from the Company and its
predecessor of $618,706 and $1,480,779, respectively.
7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of withdrawals by participants per the
financial statement to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1998 1997
------------ ------------
<S> <C> <C> <C>
Withdrawals by participants per the financial statements $ 8,816,533 $ 10,924,770
Less: Amounts allocated to withdrawing
participants at beginning of year -- (239,873)
------------ ------------
Withdrawals by participants per the Form 5500 $ 8,816,533 $ 10,684,897
============ ============
</TABLE>
8. 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 Plan sponsor currently expects internal information
technology modifications to be completed by fall 1999. The Plan sponsor does not
expect this project to have a significant effect on plan operations. Third-party
service providers have represented to the Plan sponsor that they are currently
year 2000 compliant.
11
<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 16, 1999, with respect to the
financial statements of the Autoliv ASP, Inc. Employee Savings and Investment
Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 1998.
/s/ Ernst & Young LLP
Salt Lake City, Utah
June 28, 1999
