UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to |
Commission File No.:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes: ☐ No:
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of October 16, 2023, there were
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are not historical facts but rather forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those that address activities, events or developments that Autoliv, Inc. (“Autoliv,” the “Company” or “we”) or its management believes or anticipates may occur in the future. All forward-looking statements are based upon our current expectations, various assumptions and/or data available from third parties. Our expectations and assumptions are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that such forward-looking statements will materialize or prove to be correct as forward-looking statements are inherently subject to known and unknown risks, uncertainties and other factors which may cause actual future results, performance or achievements to differ materially from the future results, performance or achievements expressed in or implied by such forward-looking statements.
In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words.
Because these forward-looking statements involve risks and uncertainties, the outcome could differ materially from those set out in the forward-looking statements for a variety of reasons, including without limitation: general economic conditions, including inflation; changes in light vehicle production; fluctuation in vehicle production schedules for which the Company is a supplier; global supply chain disruptions, including port, transportation and distribution delays or interruptions; supply chain disruptions and component shortages specific to the automotive industry or the Company; disruptions and impacts relating to the ongoing war between Russia and Ukraine; changes in general industry and market conditions or regional growth or decline; changes in and the successful execution of our capacity alignments: restructuring, cost reduction and efficiency initiatives and the market reaction thereto; loss of business from increased competition; higher raw material, fuel and energy costs; changes in consumer and customer preferences for end products; customer losses; changes in regulatory conditions; customer bankruptcies, consolidations or restructuring or divestiture of customer brands; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; component shortages; market acceptance of our new products; costs or difficulties related to the integration of any new or acquired businesses and technologies; continued uncertainty in pricing and other negotiations with customers; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; our ability to be awarded new business; product liability, warranty and recall claims and investigations and other litigation, civil judgements or financial penalties and customer reactions thereto; higher expenses for our pension and other postretirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of pending or future litigation or infringement claims and the availability of insurance with respect to such matters; our ability to protect our intellectual property rights; negative impacts of antitrust investigations or other governmental investigations and associated litigation relating to the conduct of our business; tax assessments by governmental authorities and changes in our effective tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; our ability to meet our sustainability targets, goals and commitments; political conditions; dependence on and relationships with customers and suppliers; and other risks and uncertainties identified in Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q, Item 1A “Risk Factors” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023.
For any forward-looking statements contained in this or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to update publicly or revise any forward-looking statements in light of new information or future events, except as required by law.
2
INDEX |
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4 |
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4 |
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1. |
10 |
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2. |
11 |
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3. |
12 |
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4. |
15 |
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5. |
15 |
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6. |
16 |
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7. |
16 |
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8. |
17 |
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9. |
18 |
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10. |
19 |
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11. |
20 |
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12. |
20 |
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13. |
20 |
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
21 |
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
34 |
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34 |
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35 |
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35 |
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35 |
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
35 |
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35 |
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35 |
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35 |
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36 |
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3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in millions, except per share data)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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$ |
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$ |
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$ |
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$ |
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( |
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( |
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( |
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Gross profit |
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Selling, general and administrative expenses |
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( |
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( |
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Research, development and engineering expenses, net |
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( |
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( |
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( |
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( |
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Amortization of intangibles |
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( |
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( |
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( |
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( |
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Other income (expense), net1) |
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( |
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( |
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( |
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Operating income |
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Income from equity method investment |
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Interest income |
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Interest expense |
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( |
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( |
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( |
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( |
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Other non-operating items, net |
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( |
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( |
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( |
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( |
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Income before income taxes |
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Income tax expense |
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( |
) |
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( |
) |
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( |
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( |
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Net income2) |
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Less: Net income attributable to non-controlling interest |
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Net income attributable to controlling interest |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share – basic |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share – diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted average number of shares outstanding, net of |
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Weighted average number of shares outstanding, |
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Cash dividend per share – declared |
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$ |
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$ |
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$ |
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$ |
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Cash dividend per share – paid |
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$ |
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$ |
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$ |
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$ |
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1)
2)
See Notes to the unaudited Condensed Consolidated Financial Statements.
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in millions)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2023 |
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2022 |
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2023 |
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2022 |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss) before tax: |
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Change in cumulative translation adjustments |
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( |
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( |
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( |
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( |
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Net change in unrealized components of defined benefit plans |
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( |
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Other comprehensive (loss), before tax |
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( |
) |
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( |
) |
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( |
) |
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( |
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Tax effect allocated to other comprehensive income (loss) |
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( |
) |
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( |
) |
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( |
) |
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Other comprehensive (loss), net of tax |
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( |
) |
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( |
) |
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( |
) |
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( |
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Comprehensive income |
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Less: Comprehensive income (loss) attributable to |
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( |
) |
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Comprehensive income attributable to |
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$ |
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$ |
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$ |
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$ |
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See Notes to the unaudited Condensed Consolidated Financial Statements.
5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
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As of |
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September 30, 2023 |
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December 31, 2022 |
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Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Receivables, net |
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Inventories, net |
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Prepaid expenses and accrued income |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Other non-current assets |
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Total assets |
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Liabilities and equity |
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Short-term debt |
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Accounts payable |
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Accrued expenses |
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Operating lease liabilities - current |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Pension liability |
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Operating lease liabilities - non-current |
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Other non-current liabilities |
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Total non-current liabilities |
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Common stock |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
) |
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( |
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Treasury stock |
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( |
) |
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( |
) |
Total controlling interest's equity |
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Non-controlling interest |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See Notes to the unaudited Condensed Consolidated Financial Statements.
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
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Nine Months Ended September 30, |
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2023 |
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2022 |
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Operating activities |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to cash provided by operating activities: |
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Depreciation and amortization |
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Gain on divestiture of property |
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( |
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Other, net |
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( |
) |
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Net change in operating assets and liabilities |
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( |
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( |
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Net cash provided by operating activities |
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Investing activities |
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Expenditures for property, plant and equipment |
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( |
) |
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( |
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Proceeds from sale of property, plant and equipment |
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Net cash used in investing activities |
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( |
) |
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( |
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Financing activities |
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Net increase (decrease) in short-term debt |
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( |
) |
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Proceeds from long-term debt |
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Repayment of long-term debt |
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( |
) |
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( |
) |
Dividends paid |
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( |
) |
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( |
) |
Stock repurchased |
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( |
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( |
) |
Common stock options exercised |
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Dividend paid to non-controlling interest |
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( |
) |
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( |
) |
Net cash used in financing activities |
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( |
) |
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( |
) |
Effect of exchange rate changes on cash and cash equivalents |
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( |
) |
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( |
) |
Net decrease in cash and cash equivalents |
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( |
) |
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( |
) |
Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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See Notes to unaudited Condensed Consolidated Financial Statements.
7
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (UNAUDITED) (Dollars in millions)
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Common |
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Additional |
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Retained |
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Accumulated |
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Treasury |
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Total |
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Non- |
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Total |
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Balances at December 31, 2022 |
$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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$ |
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||||||
Comprehensive Income: |
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Net income |
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Foreign currency translation |
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Pension liability |
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( |
) |
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( |
) |
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( |
) |
|||||
Total Comprehensive Income |
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— |
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— |
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Stock repurchased and retired |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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Stock-based compensation |
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Cash dividends declared |
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( |
) |
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( |
) |
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( |
) |
|||||
Balances at March 31, 2023 |
$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
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$ |
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$ |
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||||||
Comprehensive Income: |
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Net income |
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Foreign currency translation |
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( |
) |
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( |
) |
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( |
) |
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( |
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||||
Pension liability |
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||||||||
Total Comprehensive Income |
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— |
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— |
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( |
) |
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( |
) |
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||||
Stock repurchased and retired |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
|||
Stock-based compensation |
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Dividends paid to non-controlling interest |
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( |
) |
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( |
) |
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Cash dividends declared |
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( |
) |
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( |
) |
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( |
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Balances at June 30, 2023 |
$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
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|
$ |
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|
$ |
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Comprehensive Income: |
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Net income |
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Foreign currency translation |
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