Autoliv Releases $57 million of Tax Reserves.STOCKHOLM, Sweden -- Autoliv Inc. (NYSE NYSE See: New York Stock Exchange :ALV ALV Arvonlisävero (Finnish: value added tax) ALV Avian Leukosis Virus ALV Andorra La Vella (capital of Andorra) ALV Autonomous Land Vehicle ALV Asta La Vista ALV Alvin, Texas ALV Air Launched Vehicle )(STO:ALIV ALIV A Life in Vain (band) ), the worldwide leader in automotive safety systems, will recognize a non-cash income tax benefit in its third quarter of approximately $57 million resulting from the release of reserves for income taxes. As a result, Autoliv will report an income from income taxes on the tax line in its income statement for the third quarter and an exceptionally low effective tax rate for the nine-month period and the full year of 2006. The effect on shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of the tax reserve release will be an increase of approximately 2% due to the one-time effect that corresponds to approximately 70 cents in earnings per share. Additionally, based on the capital structure at the latest closing (i.e. June 30), operating working capital in relation to 12-month sales will be increased by approximately 1 percentage point and the return on equity will be slightly more than 2 percentage points higher on a year-to-date basis than without the release of tax reserves Background The release has been triggered by a recently completed tax examination in the U.S. and the subsequent closing, on September 18, of the statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. covering the tax returns for the six years since the formation of Autoliv Inc. on May 1, 1997 through December 31, 2002. The closing of the statute of limitations which results from the passage of time means the tax returns filed for these years have been finalized by the tax authorities and are not subject to further audit. Autoliv Inc. develops and manufactures automotive safety systems for all major automotive manufacturers in the world. Together with its joint ventures Autoliv has 80 facilities with nearly 39,000 employees in 30 vehicle-producing countries. In addition, the company has development and engineering centers in six countries around the world, including 20 test tracks, more than any other automotive safety supplier. Sales in 2005 amounted to US $6.2 billion. The Company's shares are listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE: ALV) and its Swedish Depository Receipts on the OM Stockholm Stock Ex-change (SSE (1) An earlier full-screen editor in OS/2. (2) (Streaming SIMD Extensions) A series of additional instructions built into Pentium CPU chips for improved multimedia performance by performing mathematical operations on multiple sets of data at the : ALIV). This information was brought to you by Waymaker http://www.waymaker.net |
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