Annual
Report
2024
ADVANCING THROUGH INNOVATION
Aptiv is perfectly positioned at the convergence of
three secular trends — electrification, digitization
and connectivity. Our portfolio of advanced software,
compute, interconnect and electrical architecture
solutions not only drives innovation within the
automotive industry but also enables advancements
in aerospace and defense, telecommunications,
commercial vehicle, industrial and other adjacent
markets.
In 2024, we enhanced our product portfolio by
strengthening our ADAS and intelligent cockpit
solutions with AI/ML to improve performance;
launched a commercial Linux offering, Wind River
eLxr Pro, to expand into the enterprise space; added
new features to Wind River Studio to streamline
its DevSecOps tools; and strengthened Wind
River Operator to accelerate the pace of scaled
telecommunications deployments. We also deployed
generative AI across our operations and increased
the level of automation used in our manufacturing
facilities to improve quality and productivity.
In automotive, we launched a record number of new
customer vehicle programs while further localizing
our supply chain network to include more regionally
integrated partners. We also strengthened our market
position, particularly in the Asia-Pacific region, with
investments in vision technology providers StradVision
and Maxieye, and expanded our collaboration with
local automakers, such as Geely, Chery and BYD in
China; Honda and Toyota in Japan; and Mahindra
and Tata in India.
Lastly, we experienced robust growth in adjacent
markets, which now account for almost 20 percent
of our revenue. We expanded our commercial
relationships with industry innovators such as Telus
and Boost Mobile in telecommunications, Northrop
Grumman in aerospace, Alstom in transportation and
Rockwell in industrial automation.
By providing our customers with solutions that
address their evolving needs — including increased
flexibility, improved performance and lower costs —
Aptiv continues to be their trusted partner of choice.
CONFIDENCE IN THE FUTURE
Our robust business model and talented global
workforce have enabled us to adapt quickly to
changing market dynamics, which is reflected in
our strong operating performance during 2024. We
continued to prioritize investments in modularizing
our software tech stack, expanding our portfolio of
interconnects, optimizing our global manufacturing
and engineering footprint, and diversifying our
customer and end-market exposure. We also
implemented productivity initiatives to increase the
efficiency of our manufacturing operations across
regions. As a result of these actions, we delivered
record operating income and significant margin
expansion despite near-term revenue headwinds,
and we are well positioned to drive continued strong
financial performance in the future.
Given the strength of our business foundation,
we remain confident in our ability to deliver long-
term value to our customers and shareholders. To
support our growth priorities, we have strengthened
our management team to enable our ongoing
business transformation and pursuit of strategic
opportunities within software, advanced compute,
engineered components and electrical architecture in
automotive and adjacent markets. In 2024, we funded
the repurchase of over $4 billion of Aptiv stock,
underscoring our confidence in the company’s path
to creating shareholder value.
TO OUR SHAREHOLDERS
As we reflect on 2024, I am pleased to share an update on Aptiv’s progress, the evolving
global landscape and our role in shaping a software-defined future across multiple end
markets. Despite a dynamic macroeconomic environment, Aptiv’s advanced technology
solutions and capabilities in engineering, product development, supply chain management
and manufacturing address the critical needs of our diverse customer base, accelerate the
software-defined transformation that is taking place across end markets and deliver long-
term value to our shareholders. In the year ahead, we will further increase our strategic and
operating focus with the separation of our Electrical Distribution Systems (EDS) business
from Aptiv, creating two independent leading companies with the global scale and reach that
will drive even greater market success and value creation.
2 0 2 4 A P T I V A N N U A L R E P O R T
As the next step in the company’s evolution, we are
now in the process of executing the spin-off of EDS.
The separation into two independent companies will
enable the further optimization of Aptiv’s portfolio
to better align with global megatrends fueling growth
across diverse end markets. It will also position EDS
to build on its 100-year legacy as a leader in designing
and delivering fully optimized, next-generation
electrical architecture solutions for leading OEMs in
the global automotive and commercial vehicle markets.
We are confident that this separation will create
significant value for shareholders.
We are proud of the progress we made in 2024 and
are confident in our ability to thrive in today’s dynamic
environment. Thank you for your continued trust and
support as we advance Aptiv’s mission to create a
safer, greener and more connected future.
“ BY P R O V I D I N G O U R C U S T O M E R S W I T H
S O L U T I O N S T H AT A D D R E S S T H E I R E VO LV I N G
N E E D S — I N C L U D I N G I N C R E A S E D F L E X I B I L I T Y,
I M P R O V E D P E R FO R M A N C E A N D LO W E R C O S T S —
A P T I V C O N T I N U E S T O B E T H E I R T R U S T E D
PA R T N E R O F C H O I C E .”
K E V I N P. C L A R K
Chair and Chief Executive Officer
“ O U R R O B U S T B U S I N E S S M O D E L A N D TA L E N T E D G LO B A L
W O R K FO R C E H AV E E N A B L E D U S T O A DA P T Q U I C K LY T O
C H A N G I N G M A R K E T DY N A M I C S, W H I C H I S R E F L E C T E D I N
O U R S T R O N G O P E R AT I N G P E R FO R M A N C E D U R I N G 20 24.”
K E V I N P. C L A R K
Chair and Chief Executive Officer
2 0 2 4 A P T I V A N N U A L R E P O R T
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
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 number: 001-35346
APTIV PLC
(Exact name of registrant as specified in its charter)
Jersey
98-1824200
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Spitalstrasse 5, 8200 Schaffhausen, Switzerland
(Address of principal executive offices)
+41 52 580 96 00
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Ordinary Shares. $0.01 par value per share
APTV
New York Stock Exchange
1.600% Senior Notes due 2028
APTV
New York Stock Exchange
4.350% Senior Notes due 2029
APTV
New York Stock Exchange
4.650% Senior Notes due 2029
APTV
New York Stock Exchange
3.250% Senior Notes due 2032
APTV
New York Stock Exchange
5.150% Senior Notes due 2034
APTV
New York Stock Exchange
4.250% Senior Notes due 2036
APTV
New York Stock Exchange
4.400% Senior Notes due 2046
APTV
New York Stock Exchange
5.400% Senior Notes due 2049
APTV
New York Stock Exchange
3.100% Senior Notes due 2051
APTV
New York Stock Exchange
4.150% Senior Notes due 2052
APTV
New York Stock Exchange
5.750% Senior Notes due 2054
APTV
New York Stock Exchange
6.875% Fixed-to-Fixed Reset Rate
Junior Subordinated Notes due 2054
APTV
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒. No ☐.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐. No ☒.
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. Yes ☒. No ☐.
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). Yes ☒. No ☐.
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by the 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 has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐. No ☒.
The aggregate market value of the ordinary shares held by non-affiliates of the registrant as of June 30, 2024, the last business day of
the registrant’s most recently completed second fiscal quarter, was $18,718,930,601 (based on the closing sale price of the registrant’s
ordinary shares on that date as reported on the New York Stock Exchange).
The number of the registrant’s ordinary shares outstanding, $0.01 par value per share as of January 31, 2025, was 229,446,368.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement related to the 2025 Annual General Meeting of Shareholders to be filed
subsequently are incorporated by reference into Part III of this Form 10-K.
APTIV PLC
INDEX
Page
Part I
Item 1.
Business
5
Supplementary
Item.
Executive Officers of the Registrant
14
Item 1A.
Risk Factors
16
Item 1B.
Unresolved Staff Comments
29
Item 1C.
Cybersecurity
29
Item 2.
Properties
31
Item 3.
Legal Proceedings
31
Item 4.
Mine Safety Disclosures
31
Part II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
32
Item 6.
[Reserved]
33
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
34
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
62
Item 8.
Financial Statements and Supplementary Data
65
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
139
Item 9A.
Controls and Procedures
139
Item 9B.
Other Information
140
Part III
Item 10.
Directors, Executive Officers and Corporate Governance
141
Item 11.
Executive Compensation
141
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
141
Item 13.
Certain Relationships and Related Transactions and Director Independence
141
Item 14.
Principal Accounting Fees and Services
141
Part IV
Item 15.
Exhibits, Financial Statement Schedules
142
3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K, including the exhibits being filed as part of this report, as well as other statements made by
Aptiv PLC (“Aptiv,” the “Company,” “we,” “us” and “our”), contain forward-looking statements that reflect, when made, the
Company’s current views with respect to current events, certain investments and acquisitions and financial performance. Such
forward-looking statements are subject to many risks, uncertainties and factors relating to the Company’s operations and
business environment, which may cause the actual results of the Company to be materially different from any future results,
express or implied, by such forward-looking statements. All statements that address future operating, financial or business
performance or the Company’s strategies or expectations are forward-looking statements. In some cases, you can identify these
statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “intends,” “anticipates,”
“believes,” “estimates,” “predicts,” “projects,” “potential,” “outlook” or “continue,” and other comparable terminology. Factors
that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the
following: global and regional economic conditions, including conditions affecting the credit market; global inflationary
pressures; uncertainties created by the conflict between Ukraine and Russia, and its impacts to the European and global
economies and our operations in each country; uncertainties created by the conflicts in the Middle East and their impacts on
global economies; fluctuations in interest rates and foreign currency exchange rates; the cyclical nature of global automotive
sales and production; the potential disruptions in the supply of and changes in the competitive environment for raw material and
other components integral to the Company’s products, including the ongoing semiconductor supply shortage; the Company’s
ability to maintain contracts that are critical to its operations; potential changes to beneficial free trade laws and regulations,
such as the United States-Mexico-Canada Agreement; the effects of significant increases in trade tariffs, import quotas and
other trade restrictions or actions, including retaliatory responses to such actions; changes to tax laws; future significant public
health crises; the ability of the Company to integrate and realize the expected benefits of recent transactions; the ability of the
Company to attract, motivate and/or retain key executives; the ability of the Company to avoid or continue to operate during a
strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers; and the
ability of the Company to attract and retain customers. Additional factors are discussed under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s filings with the
Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict
these events or how they may affect the Company. It should be remembered that the price of the ordinary shares and any
income from them can go down as well as up. Aptiv disclaims any intention or obligation to update or revise any forward-
looking statements, whether as a result of new information, future events and/or otherwise, except as may be required by law.
4
PART I
ITEM 1. BUSINESS
In December 2024, Old Aptiv (as defined below), a public limited company formed under the laws of Jersey on May 19,
2011, completed its previously announced reorganization transaction (the “Transaction,” or the “reorganization transaction”), in
which Old Aptiv established a new publicly-listed Jersey parent company, Aptiv Holdings Limited (“New Aptiv”), which is
resident for tax purposes in Switzerland. As a result of the Transaction, all issued and outstanding ordinary shares of Old Aptiv
were exchanged on a one-for-one basis for newly issued ordinary shares of New Aptiv. Following consummation of the
Transaction, holders of Old Aptiv shares became ordinary shareholders of New Aptiv, Old Aptiv became a wholly-owned
subsidiary of New Aptiv and New Aptiv was renamed “Aptiv PLC.” The previous publicly-listed Jersey parent company,
which was an Irish tax resident, is referred to as “Old Aptiv” throughout this Annual Report on Form 10-K. New Aptiv’s
ordinary shares are publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “APTV,” the same symbol
under which the Old Aptiv shares were previously listed. Aptiv PLC remains a public limited company incorporated under the
laws of Jersey, and continues to be subject to U.S. Securities and Exchange Commission reporting requirements.
In December 2024, following the completion of the Transaction, Old Aptiv merged with and into Aptiv Swiss Holdings
Limited (“Aptiv Swiss Holdings”), a newly formed Jersey incorporated private limited company, and a direct, wholly-owned
subsidiary of New Aptiv, with Aptiv Swiss Holdings surviving as a direct, wholly owned subsidiary of New Aptiv, and Old
Aptiv ceasing to exist. Except as otherwise noted, all property, rights, privileges, powers and franchises of Old Aptiv vested in
Aptiv Swiss Holdings, and all debts, liabilities and duties of Old Aptiv became debts, liabilities and duties of Aptiv Swiss
Holdings.
In connection with the Transaction, New Aptiv assumed Old Aptiv’s Long-Term Incentive Plans and its existing
obligations in connection with awards granted thereunder, and Aptiv Swiss Holdings (i) entered into a supplemental indenture
to each indenture in which Aptiv Swiss Holdings assumed all of Old Aptiv’s obligations under each series of Old Aptiv’s
outstanding Notes and (ii) entered into an assumption and/or supplement agreement relating to each Credit Agreement in which
New Aptiv assumed all of Old Aptiv’s obligations under each Credit Agreement as the “parent entity” thereunder. In addition,
New Aptiv (i) entered into a supplemental indenture to each indenture in which New Aptiv guaranteed the outstanding Notes
and (ii) entered into a guarantee joinder relating to each Credit Agreement in which New Aptiv guaranteed the obligations
under each Credit Agreement. Following the reorganization transaction, Aptiv Swiss Holdings replaced Old Aptiv as an obligor
under the Credit Agreements, the senior notes and the junior notes, and New Aptiv became a guarantor under the Credit
Agreements (and will act as the “parent entity” thereunder) and the indentures.
As a result of the Transaction described above, there were no material changes in Aptiv PLC’s operations or governance.
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”).
References in this Annual Report on Form 10-K, including the exhibits being filed as part of this report, to “Aptiv PLC,”
“Aptiv,” the “Company,” “we,” “us” and “our” refers to Old Aptiv (Aptiv PLC before the Transaction in December 2024) and
to New Aptiv (Aptiv PLC after the Transaction in December 2024).
Aptiv is a global technology company focused on making the world safer, greener and more connected. We deliver end-
to-end mobility solutions, enabling our customers’ transition to a more electrified, software-defined future. We design and
manufacture vehicle components and provide electrical, electronic and active safety technology to the global automotive and
commercial vehicle markets, creating the software and hardware foundation for vehicle features and functionality. Our
Advanced Safety and User Experience segment is focused on providing the necessary software and advanced computing
platforms, and our Signal and Power Solutions segment is focused on providing the requisite networking architecture required
to support the integrated systems in today’s complex vehicles. Together, our businesses develop the ‘brain’ and the ‘nervous
system’ of increasingly complex vehicles, providing integration of the vehicle into its operating environment.
We are one of the largest vehicle technology suppliers and our customers include the 25 largest automotive original
equipment manufacturers (“OEMs”) in the world. We operate 140 major manufacturing facilities and 11 major technical centers
utilizing a regional service model that enables us to efficiently and effectively serve our global customers from best cost
countries. We have a presence in 49 countries and have approximately 21,200 scientists, engineers and technicians focused on
developing market relevant product solutions for our customers.
We are focused on growing and improving the profitability of our businesses, and have implemented a strategy designed
to position the Company to deliver industry-leading long-term shareholder returns. This strategy includes disciplined investing
in our business to grow and enhance our product offerings, strategically focusing our portfolio in high-technology, high-growth
spaces in order to meet consumer preferences and leveraging an industry-leading cost structure to expand our operating
margins.
5
Planned Spin-off of Electrical Distribution Systems Business
On January 22, 2025, we announced our intention to pursue a separation of our Electrical Distribution Systems business
through a transaction expected to be treated as a tax-free spin-off to Aptiv’s shareholders. The Company plans to complete the
separation by March 31, 2026, subject to customary closing conditions.
Website Access to Company’s Reports
Aptiv’s website address is aptiv.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) are available free of charge through our website as soon as reasonably practicable
after they are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).
Our Company
We believe the automotive industry is being shaped by rapidly increasing consumer demand for new mobility solutions,
advanced technologies, including software-defined vehicles, and vehicle connectivity, as well as government regulation related
to vehicle safety, fuel efficiency and emissions control. More broadly, the “Safe,” “Green” and “Connected” mega-trends are
expected to drive higher growth for our products than the underlying markets they serve. We have organized our business into
two diversified segments, which enable us to develop technology solutions and manufacture highly-engineered products that
enable our customers to respond to these mega-trends:
•
Advanced Safety and User Experience—This segment, which includes our Active Safety, User Experience and
Smart Vehicle Compute and Software businesses, provides critical technologies and services to enhance vehicle
safety, security, comfort and convenience, including sensing and perception systems, electronic control units, multi-
domain controllers, vehicle connectivity systems, cloud-native software platforms, application software, autonomous
driving technologies and end-to-end DevOps tools.
•
Signal and Power Solutions—This segment, which includes our Engineered Components Group and Electrical
Distribution Systems businesses, provides complete design, manufacture and assembly of the vehicle’s electrical
architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable
management, electrical centers and high voltage power and safety-critical data distribution systems. Our products
provide the signal distribution and computing power backbone that supports increased vehicle content and
electrification, reduced emissions, higher fuel economy and off-vehicle connectivity.
Refer to Results of Operations by Segment in Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations and Note 22. Segment Reporting to the audited consolidated financial statements for financial
information about our business segments.
Our business is diversified across end-markets, regions, customers, vehicle platforms and products. Our customer base
includes the 25 largest automotive OEMs in the world, and in 2024, 29% of our net sales came from the Asia Pacific region,
which we have identified as a key market likely to experience substantial long-term growth. Our ten largest platforms in 2024
were with seven different OEMs. In addition, in 2024 our products were found in 17 of the 20 top-selling vehicle models in the
United States (“U.S.”), 17 of the 20 top-selling vehicle models in Europe and 12 of the 20 top-selling vehicle models in China.
We have established a worldwide design and manufacturing footprint with a regional service model that enables us to
efficiently and effectively serve our global customers from best cost countries. This regional model is structured primarily to
service the North American market from Mexico, the South American market from Brazil, the European market from Eastern
Europe and North Africa, and the Asia Pacific market from China. Our global scale and regional service model enables us to
engineer globally and execute regionally to serve the largest OEMs, which are seeking suppliers that can serve them on a
worldwide basis. Our footprint also enables us to adapt to the regional design variations the global OEMs require while also
serving key growth market OEMs.
Our Industry
The automotive technology and components industry provides critical technologies, components, systems, subsystems
and modules to OEMs for the manufacture of new vehicles, as well as to the aftermarket for use as replacement parts for current
production and older vehicles. In addition, the industry is increasingly progressing towards software-defined vehicles becoming
critical elements of the overall automotive ecosystem. Overall, we expect long-term growth of global vehicle sales and
production in the OEM market. In 2024, the industry experienced decreased global customer sales and production schedules,
and increased inventory levels, primarily driven by various global uncertainties and global inflationary pressures. Global
automotive vehicle production decreased 1% (3% on an Aptiv weighted market basis, which represents global vehicle
production weighted to the geographic regions in which the Company generates its revenue) from 2023 to 2024, reflecting
6
vehicle production declines of 5% in Europe and 2% in North America, partially offset by increased production of 4% in China
and 3% in South America, our smallest region. Demand for automotive components in the OEM market is generally a function
of the number of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors
such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends. Although OEM
demand is tied to actual vehicle production, participants in the automotive technology and components industry also have the
opportunity to grow through increasing product content per vehicle by further penetrating business with existing customers and
in existing markets, gaining new customers and increasing their presence in global markets. We believe that evolving entrants
into the global transportation industry such as mobility providers, electric vehicle developers and smart cities will provide
additional markets for our advanced technologies. We believe that as a company with a global presence and advanced
technology, engineering, manufacturing and customer support capabilities, we are well-positioned to benefit from these
opportunities.
We believe that continuously increasing societal demands have created the three “mega-trends” that serve as the basis for
the next wave of market-driven automotive technology advancement. We aim to continue developing leading edge technology
focused on addressing these mega-trends, and apply that technology toward products with sustainable margins that enable our
customers, both OEMs and others, to produce distinctive market-leading products. We have identified a core portfolio of
products that draw on our technical strengths and align with these mega-trends where we believe we can provide differentiation
to our customers.
Safe. The first mega-trend, “Safe,” represents technologies aimed not just at protecting vehicle occupants when
a crash occurs, but those that actually proactively reduce the risk of a crash occurring. OEMs continue to focus on
improving occupant and pedestrian safety in order to meet increasingly stringent regulatory requirements in various
markets. As a result, suppliers are focused on developing technologies aimed at protecting vehicle occupants when
a crash occurs, as well as advanced driver assistance systems that reduce driver distractions and automated safety
features that proactively mitigate the risk of a crash occurring. Examples of new and alternative technologies that
incorporate sophisticated detection and advanced software for collision avoidance include lane departure warning
and centering systems, adaptive cruise control and traffic jam assist, and driver and cabin monitoring systems.
Green. The second mega-trend, “Green,” represents technologies designed to help reduce emissions, increase
fuel economy and minimize the environmental impact of vehicles. Green is a key mega-trend today because of the
convergence of several issues: climate change, volatility in oil prices, an increasing number of vehicles in use
worldwide and recent and pending regulation in every region regarding fuel economy and greenhouse gas (“GHG”)
emissions. OEMs continue to focus on improving fuel efficiency and reducing emissions in order to meet
increasingly stringent regulatory requirements in various markets. On a worldwide basis, the relevant authorities in
the largest markets in which we operate have already instituted regulations requiring reductions in emissions and/or
increased fuel economy. In many cases, other authorities have initiated legislation or regulation that would further
tighten the standards through 2025 and beyond. Based on the current regulatory environment, we believe that
OEMs, including those in the U.S., the European Union (the “E.U.”) and China, will be subject to requirements for
even greater reductions in carbon dioxide (“CO2”) emissions over the next ten years. For example, in the U.S., the
Environmental Protection Agency (the “EPA”) proposed new rules in 2023 that could require as much as 67% of
all light-duty vehicles and 46% of medium-duty vehicles sold in the U.S. by model year 2032 to be all-electric, and
the California Air Resources Board approved rules in 2022, which require that all new passenger cars and light
trucks sold in California be electric vehicles or other zero-emission models by 2035. In 2023, the E.U. amended
regulations, which require that all new passenger cars and vans sold in the E.U. to have zero CO2 emissions by
2035. These and other standards will require meaningful innovation as OEMs and suppliers are challenged to find
ways to improve engine management, electrical power consumption, vehicle weight and integration of electric
vehicles and alternative technologies. As a result, suppliers are developing innovations that result in significant
improvements in fuel economy, emissions and performance for internal combustion engine vehicles. At the same
time, suppliers are also developing and marketing new and alternative technologies that support electric vehicles,
hybrid vehicles and fuel cell products to improve fuel economy and emissions. We are developing key enabling
technologies in the areas of vehicle charging and vehicle power distribution and control that are essential to the
introduction of our customers’ electrified vehicle platforms. We are also enabling the trend towards vehicle
electrification with high voltage electrification solutions that reduce CO2 emissions and increase fuel economy,
helping to make the world greener.
Connected. The third mega-trend, “Connected,” represents technologies designed to seamlessly integrate
today’s highly complex vehicles into the electronic operating environment, and provide drivers with connectivity to
the global information network. The technology content of vehicles continues to increase as consumers demand
greater safety, personalization, infotainment, productivity and convenience while driving, which in turn leads to
increasing demand for electrical architecture as a foundation for this content. Also, with increased smart device
usage in vehicles, driver distractions can be dramatically increased, which in turn results in greater risk of
7
accidents. We are pioneering vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication
technologies which enable vehicles to detect and signal danger, reducing vehicle collisions and improving driver
safety, while also maintaining connectivity to an increasing number of devices inside and outside of vehicles. We
also utilize advanced connectivity solutions such as over-the-air (OTA) technology that enable vehicles to receive
software updates remotely and collect market-relevant data from connected vehicles.
We expect these mega-trends to continue to create growth and opportunity for us. We believe we are well-positioned to
provide solutions and products to OEMs to expand the electronic and technological content of their vehicles. We also believe
electronics integration, which generally refers to products and systems that combine integrated circuits, software algorithms,
sensor technologies and mechanical components within the vehicle will allow OEMs to achieve substantial reductions in weight
and mechanical complexity, resulting in easier assembly, enhanced fuel economy, improved emissions control and better
vehicle performance.
Convergence of Safe, Green and Connected Solutions
The combination of advanced technologies being developed within these mega-trends is contributing to the digital
transformation across mission-critical industries. Intelligent, software-defined solutions, such as increasingly capable automated
driving technologies, will provide strong societal benefit as well as the opportunity for long-term growth for our product
offerings, including new potential customers such as mobility providers, telecommunications network operators and smart
cities. Societal benefits of increased vehicle automation include enhanced safety (resulting from collision avoidance and
improved vehicle control), environmental improvements (a reduction in CO2 emissions resulting from optimized driving
behavior), labor cost savings and improved productivity (as a result of alternate uses for drive time) and unlocking new
software and data-driven services. Growth opportunities in this space result from increased content, additional computing
power and software requirements, solutions to enhance lifecycle management and connectivity, increased electrification and
high-speed data interconnects. We believe the complexity of these systems will also require ongoing software support services,
as these vehicle systems will be continuously upgraded with new features and performance enhancements
As part of our strategy to harness the full potential of connected intelligent systems across industries, strengthen our
capabilities in software-defined mobility and to enable advanced smart vehicle architecture changes, we acquired Wind River
Systems, Inc. (“Wind River”) in December 2022. Wind River is a global leader in delivering software for the intelligent edge
for multiple industries, including automotive, by leveraging mixed-criticality software products and solutions enabling
customers to develop in the cloud, deploy over the air and run and manage software at the vehicle edge.
We are also continuing to develop market-leading automated driving solutions such as automated driving software,
sensing and perception technologies enhanced through artificial intelligence and machine learning, as well as the underlying
architecture technologies capable of supporting safety-critical applications. We believe we are well-aligned with industry
technology trends that will help to support sustainable future growth in this space and have partnered with leaders in their
respective fields to advance the pace of development and commercialization of these emerging technologies.
In March 2020, we completed a transaction with Hyundai Motor Group (“Hyundai”) to form Motional AD LLC
(“Motional”), a joint venture focused on the design, development and commercialization of autonomous driving technologies.
Although we believe our strategic partnerships have us well-aligned with industry technology mega-trends in these evolving
areas, the timeline necessary to produce commercially viable autonomous vehicles has been extended and is still subject to
significant uncertainty, which resulted in additional funding requirements for Motional. In April 2024, Aptiv and Hyundai
entered into an agreement to restructure Aptiv’s ownership interest in Motional and for Hyundai to provide additional funding
to Motional, which also eliminated any requirements for additional future funding from Aptiv. These transactions, which were
completed in May 2024, resulted in the reduction of our common equity interest in Motional from 50% as of December 31,
2023 to approximately 15%. The total gain recorded as a result of these transactions was approximately $641 million ($2.50 per
diluted share) during the year ended December 31, 2024, within net gain on equity method transactions in the consolidated
statements of operations. Refer to Note 5. Investments in Affiliates to the audited consolidated financial statements contained
herein for further information on these transactions.
Standardization of Sourcing by OEMs
Many OEMs are continuing to adopt global vehicle platforms to increase standardization, reduce per unit cost and
increase capital efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to manufacture
products on a worldwide basis as well as the flexibility to adapt to regional variations. Suppliers with global scale and strong
design, engineering and manufacturing capabilities, are best positioned to benefit from this trend. OEMs are also increasingly
looking to their suppliers to simplify vehicle design and assembly processes to reduce costs and weight. As a result, suppliers
that sell vehicle components directly to manufacturers (Tier I suppliers) have assumed many of the design, engineering,
research and development and assembly functions traditionally performed by vehicle manufacturers. Suppliers that can provide
fully engineered solutions, systems and pre-assembled combinations of component parts are positioned to leverage the trend
toward system sourcing.
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Shorter Product Development Cycles
As a result of government regulations and customer preferences, OEMs are requiring suppliers to respond faster with new
designs and product innovations. While these trends are more prevalent in mature markets, certain key growth markets are
advancing rapidly towards the regulatory standards and consumer preferences of the more mature markets. Suppliers with
strong technologies, robust global engineering and development capabilities will be best positioned to meet OEM demands for
rapid innovation.
Products
Our organizational structure and management reporting support the management of these core product lines:
Advanced Safety and User Experience. This segment provides critical technologies and services to enhance vehicle
safety, security, comfort and convenience, including sensing and perception systems, electronic control units, multi-domain
controllers, vehicle connectivity systems, cloud-native software platforms, application software, autonomous driving
technologies and end-to-end DevOps tools.
•
Advanced Safety primarily consists of solutions that enable advanced safety features and vehicle automation, as well
as radar, vision and other sensing technologies.
•
User Experience primarily enables in-cabin solutions around infotainment, driver interface and interior sensing
solutions.
•
Smart Vehicle Compute and Software primarily consists of zone control and centralized computing platforms, as well
as edge-to-cloud tools.
Signal and Power Solutions. This segment provides complete design, manufacture and assembly of the vehicle’s
electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable
management, electrical centers and high voltage and safety-critical distribution systems. Our products provide the signal
distribution and computing power backbone that supports increased vehicle content and electrification, reduced emissions,
higher fuel economy and off-vehicle connectivity.
•
Engineered Components Group consists of high quality connectors engineered primarily for use in automotive and
related markets, which also have applications in the industrial, telematics, aerospace, defense and medical sectors, as
well as Electrical Centers, which provide centralized electrical power and signal distribution and all of the associated
circuit protection and switching devices needed to support the optimization of the overall vehicle electrical system.
•
Electrical Distribution Systems, including 48-volt hybrid and high voltage systems, are integrated into one optimized
vehicle electrical system that can utilize smaller cable and gauge sizes and ultra-thin wall insulation (this product line
makes up approximately 42%, 43% and 44% of our total revenue for the years ended December 31, 2024, 2023 and
2022, respectively).
Competition
Although the overall number of our top competitors has decreased due to ongoing industry consolidation, the automotive
technology and components industry remains extremely competitive. Furthermore, the rapidly evolving nature of the markets in
which we compete has attracted, and may continue to attract, new entrants, particularly in best cost countries such as China and
in areas of evolving vehicle technologies such as intelligent systems software, automated driving and mobility solutions, which
has attracted competitors from outside the traditional automotive industry. OEMs rigorously evaluate suppliers on the basis of
product quality, price, reliability and timeliness of delivery, product design capability, technical expertise and development
capability, new product innovation, financial viability, application of lean principles, operational flexibility, customer service
and overall management. In addition, our customers generally require that we demonstrate improved efficiencies, through cost
reductions and/or price improvement, on a year-over-year basis.
9
Our key competitors in each of our operating segments include but are not limited to:
Segment
Competitors
Signal and Power Solutions ...................................................... • Amphenol Corporation
• Draexlmaier Group
• Lear Corporation
• Luxshare Precision Industry Co., Ltd.
• Molex, LLC (a subsidiary of Koch, Inc.)
• Sumitomo Electric Industries, Ltd.
• TE Connectivity plc
• Yazaki Corporation
Advanced Safety and User Experience ..................................... • Bosch Group
• Continental AG
• Denso Corporation
• Harman International (a subsidiary of Samsung Electronics)
• Hyundai Mobis
• LG Electronics
• Magna International, Inc.
• Panasonic Corporation
• Valeo
• Visteon Corporation
• ZF Friedrichshafen AG
Customers
We sell our products and services to the major global OEMs in every region of the world. Our ten largest customers
accounted for approximately 55% of our total net sales for the year ended December 31, 2024, none of which individually
exceeded 10%.
Supply Relationships with Our Customers
We typically supply products to our OEM customers through purchase orders, which are generally governed by general
terms and conditions established by each OEM. Although the terms and conditions vary from customer to customer, they
typically contemplate a relationship under which our customers place orders for their requirements of specific components
supplied for particular vehicles but are not required to purchase any minimum amount of products from us. These relationships
typically extend over the life of the related vehicle. Prices are negotiated with respect to each business award, which may be
subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses or
for cost reductions achieved by us. The terms and conditions typically provide that we are subject to a warranty on the products
supplied; in most cases, the duration of such warranty is coterminous with the warranty offered by the OEM to the end-user of
the vehicle. We may also be obligated to share in all or a part of recall costs if the OEM recalls its vehicles for defects
attributable to our products.
Individual purchase orders are terminable for cause or non-performance and, in most cases, upon our insolvency and
certain change of control events. In addition, many of our OEM customers have the option to terminate for convenience on
certain programs, which permits our customers to impose pressure on pricing during the life of the vehicle program, and issue
purchase contracts for less than the duration of the vehicle program, which potentially reduces our profit margins and increases
the risk of our losing future sales under those purchase contracts. We manufacture and ship based on customer release
schedules, normally provided on a weekly basis, which can vary due to cyclical automobile production or dealer inventory
levels.
Although customer programs typically extend to future periods, and although there is an expectation that we will supply
certain levels of OEM production during such future periods, customer agreements including applicable terms and conditions
do not necessarily constitute firm orders. Firm orders are generally limited to specific and authorized customer purchase order
releases placed with our manufacturing and distribution centers for actual production and order fulfillment. Firm orders are
typically fulfilled as promptly as possible from the conversion of available raw materials, sub-components and work-in-process
inventory for OEM orders and from current on-hand finished goods inventory for aftermarket orders. The dollar amount of such
purchase order releases on hand and not processed at any point in time is not believed to be significant based upon the time
frame involved.
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Materials
We procure our raw materials from a variety of suppliers around the world. Generally, we seek to obtain materials in the
region in which our products are manufactured in order to minimize transportation and other costs. The most significant raw
materials we use to manufacture our products include copper and resins. As of December 31, 2024, we have not experienced
any significant shortages of raw materials, however, as a result of our customers’ recent production volatility and cancellations,
our balance of productive, raw and component material inventories has increased substantially from customary levels. These
changes to the production environment were primarily driven by the global supply chain disruptions that impacted the
automotive industry at times during previous years. We continue to actively monitor and manage inventory levels across all
inventory types in order to maximize both supply continuity and the efficient use of working capital. Normally we do not carry
inventories of such raw materials in excess of those reasonably required to meet our production and shipping schedules.
Commodity cost volatility, most notably related to copper, petroleum-based resin products and fuel, is a challenge for us
and our industry. Recently, the industry has been subjected to increased pricing pressures, specifically in relation to these
commodities, which have experienced significant volatility in price. We have also been impacted globally by increased overall
inflation as a result of a variety of global trends. We are continually seeking to manage these and other material-related cost
pressures using a combination of strategies, including working with our suppliers to mitigate costs, seeking alternative product
designs and material specifications, combining our purchase requirements with our customers and/or suppliers, changing
suppliers, hedging of certain commodities and other means. In the case of copper, which primarily affects our Signal and Power
Solutions segment, contract clauses have enabled us to pass on some of the price increases to our customers and thereby
partially offset the impact of increased commodity costs on operating income for the related products. Other than in the case of
copper, our overall success in passing commodity cost increases on to our customers has been limited. However, we have
negotiated, and will continue to negotiate as necessary, price increases with our customers in response to global inflationary
pressures and the aforementioned global supply chain disruptions. We will continue our efforts to pass market-driven
commodity cost increases to our customers in an effort to mitigate all or some of the adverse earnings impacts, including by
seeking to renegotiate terms as contracts with our customers expire.
Seasonality
In general, our business is moderately seasonal, as our primary North American customers historically reduce production
during the month of July and halt operations for approximately one week in December. Our European customers generally
reduce production during the months of July and August and for one week in December. Our Chinese customers generally halt
operations for one week during the months of February and October. Shut-down periods in the rest of the world generally vary
by country. In addition, automotive production is traditionally reduced in the months of July, August and September due to the
launch of component production for new vehicle models.
People
As of December 31, 2024, we employed approximately 141,000 people; 31,000 salaried employees and 110,000 hourly
employees. In addition, we maintain a contingent workforce of approximately 50,000 to accommodate fluctuations in customer
demand. We are a global company serving every major worldwide market. As of December 31, 2024 our workforce is
distributed as follows:
•
51% in North America, with our largest presence in Mexico;
•
31% in the Europe, Middle East and Africa region, with our largest presence in Morocco and Serbia;
•
14% in the Asia Pacific region, with our largest presence in China and India; and
•
4% in South America, with our largest presence in Brazil.
As of December 31, 2024, approximately 50% of our total workforce were women, and approximately 25% of
management roles were held by women.
Certain of our employees are represented worldwide by numerous unions and works councils, including the International
Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America, IG Metall
and the Confederacion De Trabajadores Mexicanos. We maintain collaborative and constructive labor relationships with our
employee representatives in order to foster positive employee relations.
Our Board of Directors reviews Aptiv’s talent strategy, and our Compensation & Human Resources Committee
(“CHRC”) reviews employee retention, attrition and pay equity on a continual basis. A key accomplishment in 2024 included
sustaining pay equity by race in the United States and gender pay equity among comparable roles globally.
11
Talent Development
Our people are central to our mission of developing safer, greener and more connected solutions. We continually strive to
create and maintain an environment where innovation thrives and our employees are empowered to think and act like owners.
To this end, we continually provide training, coaching and mentoring to our employees at all levels, as well as internal job
opportunities including global rotations and stretch assignments to help our employees develop and grow their careers. This
dedication to employee growth and development was demonstrated by approximately 70% of our management role openings
being filled through internal promotions in 2024. We manage succession planning as part of our monthly operating cadence and
segment, technical, and senior executive leadership succession plans are reviewed with the CHRC, Innovation and Technology
Committees, and our Board of Directors annually.
Aptiv is committed to talent development and growing the next generation of leaders. Our established career and
leadership programs provide our leaders with the tools to be effective today while preparing them for future challenges. Our
people consistently complete formal leadership and management training to enhance their abilities. We also leverage Aptiv
Academy, our online learning management system, across the business, using in-person, online and virtual reality learning
opportunities. We continue to focus on developing great people in order to maximize organizational effectiveness.
Culture
Aptiv’s culture is a key advantage to how we do business. Our culture is based on a set of distinct values and behaviors
that guide us to always do the right thing, the right way. At Aptiv, we value each individual’s perspective and we foster an
environment of respect and inclusion. Aptiv participates in, and sponsors numerous outreach programs around the world, which
seek to promote and recruit the next generation of talent into science, technology, engineering and mathematical (STEM) fields.
Leveraging our employees’ diverse backgrounds and experiences allows us to make better decisions and supports stronger
performance. Aptiv is continuing to drive innovation through an inclusive workforce for all, where every individual feels a
sense of belonging within the organization.
Culture is a central pillar in our business and helps to drive consistent leadership behavior across our businesses. We
routinely provide training to provide managers and employees with the skills and capabilities that will lead Aptiv into the
future. Additionally, we conduct regular employee feedback surveys to ensure our employees have the opportunity to be heard
and to measure engagement, which includes assessing each employee’s commitment to our company’s goals and the overall
employee experience. In December 2024, 83% of our salaried employees responded to this survey. Aptiv saw a higher
participation rate and moved closer to the industry benchmark of 7.9 with a score of 7.7. Aptiv’s score has been consistently in
the middle range of the Technology and Manufacturing benchmarks. Our management team actively utilizes feedback at all
levels of our organization to continually improve how we engage with our people and improve our operations.
We recognize that sustaining a leadership culture requires continual focus and attention. Accordingly, senior executives
and leaders throughout the Company commit time, resources and attention to ensure our culture continues to differentiate Aptiv
as a great place to work.
Health and Safety
We prioritize the health, safety and well-being of all our employees by focusing on prevention, training, auditing and risk
mitigation in our manufacturing plants, technical centers and offices. We routinely assess occupational health and safety risks,
define controls and perform internal audits for all manufacturing sites, assessing, among other things, legal compliance, controls
and key workplace safety metrics. We are a leader in workplace safety as reflected in our lost time injury frequency rate of
0.132 cases per million hours worked and our lost workday case rate per 100 employees of 0.026 for the year ended
December 31, 2024. Our standard safety management system is aligned with ISO 45001 and we are committed to ensuring all
of our manufacturing sites are ISO 45001 certified by 2025. As of December 31, 2024, 85% of our sites are certified under this
standard.
Commitment to Environmental Sustainability
Sustainability has always been core to Aptiv’s business, values and culture. We believe this strong, foundational focus on
sustainability makes Aptiv a partner of choice for our customers, a desirable place to work for our employees and a valued
contributor to the communities in which we operate. While a key part of our business is to design solutions that help transition
the world’s vehicles to cleaner sources of power, we are also committed to reducing our environmental footprint throughout our
operations around the globe. We aim to reduce our environmental impact by decreasing our carbon footprint, reducing waste
generated and consuming less water in our operations. Expenditures required to meet our environmental sustainability goals,
which are described below, are included in our normal budgeting process.
12
Decreasing our Carbon Footprint
Aptiv has committed to the Science-Based Targets initiative (the “SBTi”) Business Ambition for 1.5℃ campaign, which
requires greenhouse gas emissions to be net-zero across Aptiv’s value chain by 2050 at the latest. Our target is to reach net-zero
by 2040. Aptiv’s targets were validated by the SBTi in November 2023. To achieve these commitments, we are targeting:
•
Reducing Scope 1 and 2 absolute CO2e emissions by 100% between the baseline year (2021) and 2030;
•
Reducing Scope 3 absolute CO2e emissions by 47% between the baseline year and 2030, and achieving 100%
reduction by 2040;
•
Maintaining annual certification of all major manufacturing sites to the ISO 14001 standard;
•
Certifying ten of the most energy-intensive sites to the ISO 50001 certification by 2025;
•
Sourcing 100% of electricity for operations from renewable sources by 2030; and
•
Delivering only carbon-neutral products by 2039, from sourcing to disposal.
Key to achieving these goals is our global Environmental, Health and Safety and Sustainability management system,
which helps to keep us aligned with stringent environmental, health and safety regulations and provides a structure for
continuous improvement. This system applies to all Aptiv sites, which means that in some countries our procedures go beyond
local regulations and requirements. This system is continuously updated to ensure that our procedures remain up to date.
Reducing our Water Usage and Waste Generated
While our operations are not water intensive, we include water in our environmental risk management approach. We
identify locations where we operate that are water-scarce and take action to reduce our water consumption accordingly, while
also striving to comply with best practices in lower-risk locations. Our goal is to reduce water consumption in high-risk (water-
scarce) locations by 2% per year through 2025.
We are also committed to reducing waste, with a waste recycled target (volume of recycled waste divided by total waste
volume) of 80%. We continue to strive to actively reduce and manage waste across our manufacturing operations, as well as in
our offices. We are creating packaging that uses less material and we continue to strive to increase the share of waste and excess
materials we divert to recycling.
Additional Sustainability Information
Additional information regarding our environmental sustainability and human capital initiatives, as well as information
on our progress towards our commitments, is available in our annual Sustainability Report located on our website at
www.aptiv.com/about/sustainability. Nothing on our website, including the aforementioned Sustainability Report, shall be
deemed incorporated by reference into this Annual Report.
13
SUPPLEMENTARY ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT
The name, age (as of February 1, 2025), current positions and description of business experience of each of our executive
officers are listed below. Our executive officers are elected annually by the Board of Directors and hold office until their
successors are elected and qualified or until the officer’s resignation or removal. Positions noted below reflect current service to
Aptiv PLC and prior service to Delphi Automotive PLC and Delphi Automotive LLP.
Kevin P. Clark, 62, is chairman of Aptiv’s board of directors and chief executive officer (CEO) of the company. Mr.
Clark was named president and CEO and became a member of the board in March 2015. Previously, Mr. Clark was chief
operating officer (COO) from October 2014 to March 2015. Prior to the COO position, Mr. Clark was chief financial officer
and executive vice president from February 2013. He was appointed vice president and chief financial officer in July 2010.
Previously, Mr. Clark was a founding partner of Liberty Lane Partners, LLC, a private-equity investment firm focused on
building and improving middle-market companies. Prior to Liberty Lane Partners, Mr. Clark served as the chief financial
officer of Fisher-Scientific International Inc., a manufacturer, distributor and service provider to the global healthcare market.
Mr. Clark served as Fisher-Scientific’s chief financial officer from the company’s initial public offering in 2001 through the
completion of its merger with Thermo Electron Corporation in 2006. Prior to becoming chief financial officer, Mr. Clark served
as Fisher-Scientific’s corporate controller and treasurer.
Varun Laroyia, 53, is Aptiv’s executive vice president and chief financial officer, effective November 2024. He joined
Aptiv from LKQ Corporation, a leading provider of alternative and specialty parts to repair and accessorize automobiles and
other vehicles, where he most recently served as senior advisor, following roles as chief executive officer, LKQ Europe from
2022 to 2023 and executive vice president and chief financial officer from 2017 to 2022. Prior to serving at LKQ, Mr. Laroyia
served as chief financial officer, Global Workplace Solutions for CBRE Group, Inc. from 2015 to 2017 and, prior to that, in a
variety of roles of increasing responsibility at Johnson Controls, Gateway, General Electric and KPMG in Europe and North
America.
Allan J. Brazier, 58, is vice president and chief accounting officer of Aptiv, a position he has held since February 2011.
Mr. Brazier joined the Company in June 2005 as senior manager of technical accounting and reporting, and prior to his current
role served as assistant controller of technical accounting and reporting. Prior to joining Aptiv, Mr. Brazier was employed for
seventeen years in financial roles of increasing responsibility at various companies. Mr. Brazier is a Certified Public Accountant
and began his career with the international public accounting firm of KPMG.
Javed Khan, 52, is president of Software and Advanced Safety and User Experience, a position he has held since August
2024. Before joining Aptiv, he served as senior vice president and general manager of Cisco Collaboration, and prior to his
tenure at Cisco, Mr. Khan was the vice president of Enterprise and Consumer Security products at Symantec. He began his
career as an engineer at Novell, before moving to leadership roles at Symantec.
Joseph T. Liotine, 52, is executive vice president, Electrical Distribution Systems, a position he has held since November
2024. Mr. Liotine joined Aptiv in April 2024 as president, Signal and Power Solutions. Prior to joining Aptiv, Mr. Liotine
served as chief executive officer at Briggs & Stratton, and previously, he spent nearly 20 years in senior executive roles at
Whirlpool Corporation, most recently as president and chief operating officer, where he led the global appliance business. Mr.
Liotine began his career at PepsiCo, where he held several positions within sales and procurement.
Obed D. Louissaint, 45, is Aptiv’s executive vice president and chief people officer. He joined Aptiv as senior vice
president in January 2023 and was elevated to executive vice president in March 2024. He joined Aptiv from IBM, where he
was senior vice president, Transformation and Culture from August 2020 through December 2022. He previously served as vice
president, Talent, Watson Health & Employee Experience from 2019 to 2020 and vice president, Human Resources, IBM
Watson, Watson Health, Research, Technical Talent & Corporate from 2015 to 2020. He began his IBM career in 2001 and
held several human resources positions of increasing responsibility. Before joining IBM, Mr. Louissaint was president at
Student Agencies, Inc.
Benjamin Lyon, 45, is senior vice president and chief technology officer of Aptiv, effective December 2022. He joined
Aptiv from Astra Space, Inc., a provider of space products and launch services to the global space industry, where he was chief
engineer and executive vice president, Operations and Engineering from February 2021 through December 2022. Prior to
joining Astra, Mr. Lyon served as senior director – Special Projects Group at Apple Inc. from April 2014 to February 2021. Mr.
Lyon joined Apple in 1999, and while there, held several positions of increasing responsibility.
14
Joseph R. Massaro, 55, is Aptiv’s vice chairman, Engineered Components Group, a position he has held from November
2024. Mr. Massaro joined the Company in October 2013 as vice president, Internal Audit, and in September 2014 was
appointed to the position of vice president, corporate controller. In March 2016, he was named senior vice president and chief
financial officer. In September 2020, he also assumed the role of senior vice president, business operations, and in 2024, was
elevated to vice chairman, business operations and chief financial officer. Previously, Mr. Massaro was a managing director at
Liberty Lane Partners from 2008 to 2010. He also served as chief financial officer of inVentiv Health Inc. from 2010 to 2013, a
Liberty Lane portfolio company. Prior to Liberty Lane, he served in a variety of finance and operational roles at Thermo Fisher
Scientific from 2002 to 2007, including senior vice president of Global Business Services where his responsibilities included
the global sourcing and information technology functions. Prior to the merger with Thermo Electron, he also served as vice
president and corporate controller of Fisher Scientific and held several other senior finance positions.
Katherine H. Ramundo, 57, is executive vice president, chief legal officer, chief compliance officer and secretary of
Aptiv. She joined Aptiv as senior vice president, chief legal officer, chief compliance officer and secretary of Aptiv in March
2021, and was elevated to executive vice president in March 2024. Prior to joining Aptiv, Ms. Ramundo was executive vice
president, chief legal officer and secretary of Howmet Aerospace Inc. (formerly Arconic Inc.), a leading global provider of
advanced engineered solutions for the aerospace and transportation industries, a role she held from November 2016 to February
2021. Prior to joining Howmet Aerospace, Ms. Ramundo was executive vice president, general counsel and secretary of ANN,
Inc., the owner of the Ann Taylor and LOFT brands. Previously, Ms. Ramundo served as vice president, deputy general counsel
and assistant secretary of Colgate-Palmolive. Among her other positions during her 15-year tenure at Colgate, she served as
general counsel of the Europe/South Pacific division, and later managed global specialty legal activities. She began her career
as a litigator, practicing at major New York-based law firms, including Cravath, Swaine & Moore and Sidley Austin.
15
ITEM 1A. RISK FACTORS
Set forth below are certain risks and uncertainties that could adversely affect our results of operations or financial
condition and cause our actual results to differ materially from those expressed in forward-looking statements made by the
Company. Also refer to the Cautionary Statement Regarding Forward-Looking Information in this Annual Report.
Risks Related to Business Environment and Economic Conditions
Disruptions in the supply of raw materials and other supplies that we and our customers use in our products may
adversely affect our profitability.
We and our customers use a broad range of materials and supplies, including copper and other metals, petroleum-based
resins, chemicals, electronic components and semiconductors. A significant disruption in the supply of these materials for any
reason could decrease our production and shipping levels, which could materially increase our operating costs and materially
decrease our profit margins.
We, as with other component manufacturers in the automotive industry, ship products to our customers’ vehicle assembly
plants throughout the world so they are delivered on a “just-in-time” basis in order to maintain low inventory levels. Our
suppliers also use a similar method. However, this “just-in-time” method makes the logistics supply chain in our industry very
complex and very vulnerable to disruptions.
Such disruptions could be caused by any one of a myriad of potential problems, such as closures of one of our or our
suppliers’ plants or critical manufacturing lines due to strikes, mechanical breakdowns or failures, electrical outages, fires,
explosions, political upheaval, terrorism or war, material shortages, as well as logistical complications due to weather, global
climate change, volcanic eruptions, or other natural or nuclear disasters, delayed customs processing, the spread of an infectious
disease, virus or other widespread illness and more. Additionally, as we focus operations in best cost countries, the risk for such
disruptions is heightened. The lack of any single subcomponent necessary to manufacture one of our products could force us to
cease production, potentially for a prolonged period. Similarly, a potential quality issue could force us to halt deliveries while
we validate the products. Even where products are ready to be shipped, or have been shipped, delays may arise before they
reach our customer. Our customers may halt or delay their production for the same reason if one of their other suppliers fails to
deliver necessary components. This may cause our customers, in turn to suspend their orders, or instruct us to suspend delivery,
of our products, which may adversely affect our financial performance.
When we fail to make timely deliveries in accordance with our contractual obligations, we generally have to absorb our
own costs for identifying and solving the “root cause” problem as well as expeditiously producing replacement components or
products. Generally, we must also carry the costs associated with “catching up,” such as overtime and premium freight.
Additionally, if we are the cause for a customer being forced to halt production, the customer may seek to recoup all of its
losses and expenses from us. These losses and expenses could be significant and may include consequential losses such as lost
profits. Any global supply chain disruption, however small, could potentially cause the complete shutdown of an assembly line
of one of our customers, and any such shutdown that is due to causes that are within our control could expose us to material
claims of compensation. Where a customer halts production because of another supplier failing to deliver on time, there can be
no assurance we will be fully compensated, if at all.
Global supply chain disruptions could also lead to interruptions in our production, which could impact our ability to fully
meet the vehicle production demands of OEMs at times due to events which are outside our control. We will continue to
actively monitor our global supply chain and will seek to aggressively mitigate and minimize the impact of any future
disruptions on our business. In addition, we are carrying critical inventory items and key components, and we continue to
procure productive, raw material and non-critical inventory components in order to satisfy our customers’ vehicle production
schedules. However, as a result of our customers’ recent production volatility and cancellations, among other things, our
balance of productive, raw and component material inventories has increased substantially from customary levels as of both
December 31, 2024 and 2023. We will continue to actively monitor and manage inventory levels across all inventory types in
order to maximize both supply continuity and the efficient use of working capital.
Public health crises and other global health pandemics, epidemics and disease outbreaks and the measures taken in
response thereto could adversely impact our business, financial condition, results of operations and cash flows.
A significant public health crisis, such as the COVID-19 pandemic, could adversely impact our business as well as those
of our suppliers and customers. For example, the COVID-19 pandemic caused extended work stoppages, travel restrictions at
our facilities and those of our customers and suppliers, decreases and volatility in consumer demand and vehicle production
schedules, disruptions to our supply chain and other adverse global economic impacts. Any future significant public health
crisis could adversely impact the global economy, our industry and the overall demand for our products. In addition,
preventative or reactionary measures taken by governmental authorities may disrupt the ability of our employees, suppliers and
other business partners to perform their respective functions and obligations relative to the conduct of our business. Our ability
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to predict and respond to future changes resulting from potential health crises is uncertain as are the ultimate potential impacts
on our business. In 2023 and 2024, our manufacturing facilities were not impacted by prolonged shutdowns directly resulting
from any public health crises.
In 2022, certain of our operations in China were impacted by lockdowns imposed by governmental authorities to mitigate
the spread of COVID-19, resulting in total indirect and direct adverse impacts to revenue of approximately $270 million during
the year ended December 31, 2022. The extent to which the COVID-19 pandemic or similar significant health crises will impact
our business in the future is uncertain. In addition, to the extent such significant health crises may adversely affect our business,
financial condition, results of operations and cash flows, they may also have the effect of heightening many of the other risk
factors in this section.
The cyclical nature of automotive sales and production can adversely affect our business.
Our business is directly related to automotive sales and automotive vehicle production by our customers. Automotive
sales and production are highly cyclical and, in addition to general economic conditions, also depend on other factors, such as
consumer confidence and consumer preferences. Lower global automotive sales would be expected to result in substantially all
of our automotive OEM customers lowering vehicle production schedules, which has a direct impact on our earnings and cash
flows. In addition, automotive sales and production can be affected by labor relations issues, regulatory requirements, trade
agreements, the availability of consumer financing, inflationary pressures, interest rate volatility, supply chain disruptions and
other factors, including global health crises. Economic declines that result in a significant reduction in automotive sales and
production by our customers have in the past had, and may in the future have, an adverse effect on our business, results of
operations and financial condition.
Our sales are also affected by inventory levels and OEMs’ production levels. We cannot predict when OEMs will decide
to increase or decrease inventory levels or whether new inventory levels will approximate historical inventory levels.
Uncertainty and other unexpected fluctuations could have a material adverse effect on our business and financial condition.
A prolonged economic downturn or economic uncertainty could adversely affect our business and cause us to require
additional sources of financing, which may not be available.
Our sensitivity to economic cycles and any related fluctuation in the businesses of our customers or potential customers
may have a material adverse effect on our financial condition, results of operations or cash flows. Global automotive vehicle
production decreased 1% (3% on an Aptiv weighted market basis, which represents global vehicle production weighted to the
geographic regions in which the Company generates its revenue) from 2023 to 2024, reflecting vehicle production declines of
5% in Europe and 2% in North America, partially offset by increased production of 4% in China and 3% in South America, our
smallest region. Uncertainty relating to global or regional economic conditions may have an adverse impact on our business. A
prolonged downturn in the global or regional automotive industry, or a significant change in product mix due to consumer
demand, could require us to shut down plants or result in impairment charges, restructuring actions or changes in our valuation
allowances against deferred tax assets, which could be material to our financial condition and results of operations. If global
economic conditions deteriorate or economic uncertainty increases, our customers and potential customers may experience
deterioration of their businesses, which may result in the delay or cancellation of plans to purchase our products. If vehicle
production were to remain at low levels for an extended period of time or if cash losses for customer defaults rise, our cash flow
could be adversely impacted, which could result in our needing to seek additional financing to continue our operations. There
can be no assurance that we would be able to secure such financing on terms acceptable to us, or at all.
A drop in the market share and changes in product mix offered by our customers can impact our revenues.
We are dependent on the continued growth, viability and financial stability of our customers. Our customers generally are
OEMs in the automotive industry. This industry is subject to rapid technological change, vigorous competition, cyclical and
short product life cycles, reduced consumer demand patterns and industry consolidation. When our customers are adversely
affected by these factors, we may be similarly affected to the extent that our customers reduce the volume of orders for our
products. As a result of changes impacting our customers, sales mix can shift which may have either favorable or unfavorable
impacts on our revenues and would include shifts in regional growth, shifts in OEM sales demand, as well as shifts in consumer
demand related to vehicle segment purchases and content penetration. For instance, a shift in sales demand favoring a particular
OEMs’ vehicle model for which we do not have a supply contract may negatively impact our revenue. A shift in regional sales
demand toward certain markets could impact the sales of our customers that have a large market share in those regions, which
in turn would be expected to impact our revenue.
The mix of vehicle offerings by our OEM customers also impacts our sales. A decrease in consumer demand for specific
types of vehicles where we have traditionally provided significant content could have a significant effect on our business and
financial condition. For example, while we have identified high voltage electrification systems as a key product market, certain
of our OEM customers have recently announced delays in their electric vehicle investment strategies amidst reduced
expectations for future consumer demand for these products, which could adversely impact the growth of this product market
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within our business. Our sales of products in the regions in which our customers operate also depend on the success of these
customers in those regions.
Our business in China is subject to aggressive competition and is sensitive to economic and market conditions.
Maintaining a strong position in the Chinese market is a key component of our global growth strategy. The automotive
technology and components market in China is highly competitive, with competition from many of the largest global
manufacturers and numerous smaller domestic manufacturers. Domestic Chinese OEMs have continued to expand their market
share in China, and as a result, several non-Chinese OEMs have experienced declines in revenue and market share, resulting in
certain traditional OEMs taking steps to reduce or restructure their operations in China. For example, in the second half of
2024, General Motors (“GM”) announced plans to restructure their operations in China given the recent challenges in the
Chinese market. As GM, along with other traditional OEMs, are among our largest customers, our business and financial results
may be adversely affected by decreases in their businesses or market share in China. As the size of the Chinese market
continues to increase over the long-term, we anticipate that additional competitors, both international and domestic, will seek to
enter the Chinese market and that existing market participants will act aggressively to increase their market share. Increased
competition may result in price reductions, reduced margins and our inability to gain or hold market share. Additionally, there
have been periods of increased market volatility and moderations in the level of economic growth in China, which resulted in
periods of lower automotive production growth rates in China than those previously experienced. Our business in China is
sensitive to economic and market conditions that drive automotive sales volumes in China and may be impacted if there are
reductions in vehicle demand in China. If we are unable to maintain our position in the Chinese market or if vehicle sales in
China continue to experience minimal growth or decrease, our business and financial results could be materially adversely
affected.
We operate in the highly competitive automotive technology and component supply industry, and are dependent on the
acceptance of new product introductions for continued growth.
The global automotive technology and component supply industry is highly competitive. Competition is based primarily
on price, technology, quality, delivery and overall customer service. There can be no assurance that our products will be able to
compete successfully with the products of our competitors. Furthermore, the rapidly evolving nature of the markets in which we
compete has attracted, and may continue to attract, new and disruptive entrants from outside the traditional automotive supply
industry, particularly in countries such as China or in areas of evolving vehicle technologies such as automated driving
technologies and advanced software. These entrants may seek to gain access to certain vehicle technology and component
markets. Any of these new competitors may develop and introduce technologies that gain greater customer or consumer
acceptance, which could adversely affect the future growth of the Company. Additionally, consolidation in the automotive
industry may lead to decreased product purchases from us. As a result, our sales levels and margins could be adversely affected
by pricing pressures from OEMs and pricing actions of competitors. These factors led to selective resourcing of business to
competitors in the past and may also do so in the future.
In addition, any of our competitors may foresee the course of market development more accurately than us, develop
products that are superior to our products, have the ability to produce similar products at a lower cost than us, adapt more
quickly than us to new technologies or evolving customer requirements or develop or introduce new products or solutions
before we do, particularly related to potential transformative technologies such as autonomous driving solutions. As a result,
our products may not be able to compete successfully with their products. These trends may adversely affect our sales as well as
the profit margins on our products. If we do not continue to innovate to develop or acquire new and compelling products that
capitalize upon new technologies, this could have a material adverse impact on our results of operations.
If we do not respond appropriately, the evolution of the automotive industry towards autonomous vehicles and mobility
on demand services could adversely affect our business.
The automotive industry is increasingly focused on the development of advanced driver assistance technologies, with the
goal of developing and introducing a commercially-viable, fully automated driving experience. The high development cost of
active safety and autonomous driving technologies may result in a higher risk of exposure to the success of new or disruptive
technologies different than those being developed by us. There has also been an increase in consumer preferences for mobility
on demand services, such as car- and ride-sharing, as opposed to automobile ownership, which may result in a long-term
reduction in the number of vehicles per capita. These evolving areas have also attracted increased competition from entrants
outside the traditional automotive industry. If we do not continue to respond quickly and effectively to this evolutionary
process, our results of operations could be adversely impacted.
We have invested substantial resources in markets and technologies where we expect growth and we may be unable to
timely alter our strategies should such expectations not be realized.
Our future growth is dependent on our making the right investments at the right time to support product development and
manufacturing capacity in geographic areas where we can support our customer base and in product areas of evolving vehicle
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technologies. We have identified the Asia Pacific region, and more specifically China, as a key geographic market, and have
identified intelligent systems software, advanced driver assistance systems, autonomous driving technologies, mobility
solutions and high voltage electrification systems as key product markets. We believe these markets are likely to experience
substantial long-term growth, and accordingly have made and expect to continue to make substantial investments, both directly
and through participation in various partnerships and joint ventures, in numerous manufacturing operations, technical centers,
research and development activities and other infrastructure to support anticipated growth in these areas. If we are unable to
deepen existing and develop additional customer relationships in the Asia Pacific region, or if we are unable to develop and
introduce market-relevant advanced driver assistance or autonomous driving technologies, we may not only fail to realize
expected rates of return on our existing investments, but we may incur losses on such investments and be unable to timely
redeploy the invested capital to take advantage of other markets or product categories, potentially resulting in lost market share
to our competitors. Our results will also suffer if these areas do not grow as quickly as we anticipate.
We may not be able to respond quickly enough to changes in regulations, technology and technological risks, and to
develop our intellectual property into commercially viable products.
We cannot provide assurance that certain of our products will not become obsolete or that we will be able to achieve the
technological advances that may be necessary for us to remain competitive and maintain or increase our revenues in the future.
We are also subject to the risks generally associated with new product introductions and applications, including lack of market
acceptance, delays in product development or production and failure of products to operate properly. The pace of our
development and introduction of new and improved products depends on our ability to implement improved technological
innovations in design, engineering and manufacturing, which requires extensive capital investment. Any capital expenditure
cuts in these areas that we may determine to implement in the future to reduce costs and conserve cash could reduce our ability
to develop and implement improved technological innovations, which may materially reduce demand for our products.
To compete effectively in the automotive technology and components industry, we must be able to launch new products
to meet changing consumer preferences and our customers’ demand in a timely and cost-effective manner. Our ability to
respond to competitive pressures and react quickly to other major changes in the marketplace, including the potential
introduction of disruptive technologies such as autonomous driving solutions or consumer desire for and availability of vehicles
with advanced driver assistance technologies or which use alternative fuels is also a risk to our future financial performance.
Changes in legislative, regulatory or industry requirements or in competitive technologies may render certain of our
products obsolete or less attractive. Our ability to anticipate changes in technology and regulatory standards and to successfully
develop and introduce new and enhanced products on a timely basis are significant factors in our ability to remain competitive
and to maintain or increase our revenues. For example, the evolving sector of automated driver assistance and autonomous
driving technologies has led to guidance issued by the U.S. Department of Transportation (“DOT”) regarding best practices for
the testing and deployment of automated driving systems, and outlining federal and state roles in the regulation of these
systems, including providing state legislatures with best practices on how to safely foster the development and introduction of
automated driving technologies onto public roads. There remains potential for the continued introduction of new and expanded
regulations in this space, including potential requirements for autonomous vehicle systems to receive approval from the DOT or
other regulatory agencies prior to commercial introduction. It is also possible that regulations in this space may diverge among
jurisdictions, leading to increased compliance costs.
We cannot provide assurance that we will be able to install and certify the equipment needed to produce products for new
product programs in time for the start of production, or that the transitioning of our manufacturing facilities and resources to
full production under new product programs will not impact production rates or other operational efficiency measures at our
facilities. Development and manufacturing schedules are difficult to predict, and we cannot provide assurance that our
customers will execute on schedule the launch of their new product programs, for which we might supply products. Our failure
to successfully launch new products, or a failure by our customers to successfully launch new programs, could adversely affect
our results.
Certain of our businesses rely on relationships with collaborative partners and other third-parties for development of
products and potential products, and such collaborative partners or other third-parties could fail to perform
sufficiently.
We believe that for certain of our businesses, success in developing market-relevant products depends in part on our
ability to develop and maintain collaborative relationships with other companies. There are certain risks involved in such
relationships, as our collaborative partners may not devote sufficient resources to the success of our collaborations; may be
acquired by other companies and subsequently terminate our collaborative arrangement; may compete with us; may not agree
with us on key details of the collaborative relationship; or may not agree to renew existing collaborations on acceptable terms.
Because these and other factors may be beyond our control, the development or commercialization of our products involved in
collaborative partnerships may be delayed or otherwise adversely affected. If we or any of our collaborative partners terminate a
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collaborative arrangement, we may be required to devote additional resources to product development and commercialization or
may need to cancel certain development programs, which could adversely affect our business and operational results.
Declines in the market share or business of our five largest customers may adversely impact our revenues and
profitability.
Our five largest customers accounted for approximately 40% of our total net sales for the year ended December 31, 2024.
Accordingly, our revenues may be adversely affected by decreases in any of their businesses or market share. For instance, the
worldwide semiconductor shortage adversely impacted the automotive industry in recent years resulting in reduced vehicle
production schedules and sales from historical levels, which adversely impacted our financial condition, operating results and
cash flows for portions of the years ended December 31, 2023 and 2022. In addition, certain United Automobile, Aerospace and
Agricultural Implement Workers of America (“UAW”) represented employees at GM, Ford Motor Company (“Ford”) and
Stellantis N.V. (“Stellantis”) initiated labor strikes in September 2023, lasting more than six weeks in duration. As GM, Ford
and Stellantis are among our largest customers, these labor strikes adversely impacted our financial condition, operating results
and cash flows for the year ended December 31, 2023. Furthermore, because our customers typically have no obligation to
purchase a specific quantity of parts, a decline in the production levels of any of our major customers, particularly with respect
to models for which we are a significant supplier, could reduce our sales and thereby adversely affect our financial condition,
operating results and cash flows.
We may not realize sales represented by awarded business.
We estimate awarded business using certain assumptions, including projected future sales volumes. Our customers
generally do not guarantee volumes. In addition, awarded business may include business under arrangements that our customers
have the right to terminate without penalty. Therefore, our actual sales volumes, and thus the ultimate amount of revenue that
we derive from such sales, are not committed. If actual production orders from our customers are not consistent with the
projections we use in calculating the amount of our awarded business, we could realize substantially less revenue over the life
of these projects than the currently projected estimate.
Continued pricing pressures, OEM cost reduction initiatives and the ability of OEMs to re-source or cancel vehicle
programs may result in lower than anticipated margins, or losses, which may have a significant negative impact on our
business.
Cost-cutting initiatives adopted by our customers result in increased downward pressure on pricing. Our customer supply
agreements generally require step-downs in component pricing over the period of production, typically one to three percent per
year. In addition, our customers often reserve the right to terminate their supply contracts for convenience, which enhances their
ability to obtain price reductions. OEMs have also possessed significant leverage over their suppliers, including us, because the
automotive technology and component supply industry is highly competitive, serves a limited number of customers, has a high
fixed cost base and historically has had excess capacity. Based on these factors, and the fact that our customers’ product
programs typically last a number of years and are anticipated to encompass large volumes, our customers are able to negotiate
favorable pricing. Accordingly, as a Tier I supplier, we are subject to substantial continuing pressure from OEMs to reduce the
price of our products. For example, our customer supply agreements generally provide for annual reductions in pricing of our
products over the period of production. It is possible that pricing pressures beyond our expectations could intensify as OEMs
pursue restructuring and cost-cutting initiatives. If we are unable to generate sufficient production cost savings in the future to
offset price reductions, our gross margin and profitability would be adversely affected. See Item 1. Supply Relationships with
Our Customers for a detailed discussion of our supply agreements with our customers.
Our supply agreements with our OEM customers are generally requirements contracts, and a decline in the production
requirements of any of our customers, and in particular our largest customers, could adversely impact our revenues
and profitability.
We receive OEM purchase orders for specific components supplied for particular vehicles. In most instances our OEM
customers agree to purchase their requirements for specific products but are not required to purchase any minimum amount of
products from us. The contracts we have entered into with most of our customers have terms ranging from one year to the life
of the model (usually three to seven years, although customers often reserve the right to terminate for convenience). Therefore,
a significant decrease in demand for certain key models or group of related models sold by any of our major customers or the
ability of a manufacturer to re-source and discontinue purchasing from us, for a particular model or group of models, could
have a material adverse effect on us. To the extent that we do not maintain our existing level of business with our largest
customers because of a decline in their production requirements or because the contracts expire or are terminated for
convenience, we will need to attract new customers or win new business with existing customers, or our results of operations
and financial condition will be adversely affected. See Item 1. Supply Relationships with Our Customers for a detailed
discussion of our supply agreements with our customers.
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Adverse developments affecting one or more of our suppliers could harm our profitability.
Any significant disruption in our supplier relationships, particularly relationships with sole-source suppliers, could harm
our profitability. Furthermore, some of our suppliers may not be able to handle commodity cost volatility and/or sharply
changing volumes while still performing as we expect. To the extent our suppliers experience supply disruptions, there is a risk
for delivery delays, production delays, production issues or delivery of non-conforming products by our suppliers. Even where
these risks do not materialize, we may incur costs as we try to make contingency plans for such risks.
The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a
significant supplier could adversely affect our financial performance.
Although we receive purchase orders from our customers, these purchase orders generally provide for the supply of a
customer’s requirements for a particular vehicle model and assembly plant, rather than for the purchase of a specific quantity of
products. The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a
significant supplier could reduce our sales and thereby adversely affect our financial condition, operating results and cash
flows.
Increases in costs of the materials and other supplies that we use in our products may have a negative impact on our
business.
Significant changes in the markets where we purchase materials, components and supplies for the production of our
products may adversely affect our profitability, particularly in the event of significant increases in demand where there is not a
corresponding increase in supply, inflation or other pricing increases. In recent periods there have been significant fluctuations
in the global prices of copper, petroleum-based resin products, semiconductors and fuel charges, which have had and may
continue to have an unfavorable impact on our business, results of operations or financial condition. We will continue efforts to
pass some supply and material cost increases onto our customers, although competitive and market pressures have limited our
ability to do that, particularly with U.S. OEMs, and may prevent us from doing so in the future, because our customers are
generally not obligated to accept price increases that we may desire to pass along to them. Even where we are able to pass price
increases through to the customer, in some cases there is a lapse of time before we are able to do so. The inability to pass on
price increases to our customers when raw material prices increase rapidly or to significantly higher than historic levels could
adversely affect our operating margins and cash flow, possibly resulting in lower operating income and profitability. We expect
to be continually challenged as demand for our principal raw materials and other supplies, including electronic components, is
significantly impacted by demand in key growth markets, particularly in China. We cannot provide assurance that fluctuations
in commodity prices will not otherwise have a material adverse effect on our financial condition or results of operations, or
cause significant fluctuations in quarterly and annual results of operations.
Our hedging activities to address commodity price fluctuations may not be successful in offsetting future increases in
those costs or may reduce or eliminate the benefits of any decreases in those costs.
In order to mitigate short-term volatility in operating results due to the aforementioned commodity price fluctuations, we
hedge a portion of near-term exposure to certain raw materials used in production. The results of our hedging practice could be
positive, neutral or negative in any period depending on price changes in the hedged exposures. Our hedging activities are not
designed to mitigate long-term commodity price fluctuations and, therefore, will not protect from long-term commodity price
increases. Our future hedging positions may not correlate to actual raw material costs, which could cause acceleration in the
recognition of unrealized gains and losses on hedging positions in operating results.
We may encounter manufacturing challenges.
The volume and timing of sales to our customers may vary due to: variation in demand for our customers’ products; our
customers’ attempts to manage their inventory; design changes; changes in our customers’ manufacturing strategy; our
customers’ production schedules; acquisitions of or consolidations among customers; and disruptions in the supply of raw
materials or other supplies used in our customers’ products. Due in part to these factors, many of our customers do not commit
to long-term production schedules. Our inability to forecast the level of customer orders with certainty makes it difficult to
schedule production and maximize utilization of manufacturing capacity.
We rely on third-party suppliers for components used in our products, and we rely on third-party manufacturers to
manufacture certain of our assemblies and finished products. Our results of operations, financial condition and cash flows could
be adversely affected if our third-party suppliers lack sufficient quality control or if there are significant changes in their
financial or business condition. If our third-party manufacturers fail to deliver products, parts and components of sufficient
quality on time and at reasonable prices, we could have difficulties fulfilling our orders, sales and profits could decline, and our
commercial reputation could be damaged.
From time to time, we have underutilized our manufacturing lines. This excess capacity means we incur increased fixed
costs in our products relative to the net revenue we generate, which could have an adverse effect on our results of operations,
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particularly during economic downturns. If we are unable to improve utilization levels for these manufacturing lines and
correctly manage capacity, the increased expense levels will have an adverse effect on our business, financial condition and
results of operations. In addition, some of our manufacturing lines are located in China or other countries that are subject to a
number of additional risks and uncertainties, including increasing labor costs, which may result from market demand or other
factors, and political, social and economic instability.
Changes in factors that impact the determination of our non-U.S. pension liabilities may adversely affect us.
Certain of our non-U.S. subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on
negotiated amounts for each year of service. Our primary funded non-U.S. plans are located in Mexico and the United Kingdom
and were underfunded by $75 million as of December 31, 2024. The funding requirements of these benefit plans, and the
related expense reflected in our financial statements, are affected by several factors that are subject to an inherent degree of
uncertainty and volatility, including governmental regulation. In addition to the defined benefit pension plans, we have
retirement obligations driven by requirements in many of the countries in which we operate. These legally required plans
require payments at the time benefits are due. Obligations, net of plan assets, related to these non-U.S. defined benefit pension
plans and statutorily required retirement obligations totaled $362 million at December 31, 2024, of which $19 million is
included in accrued liabilities, $372 million is included in long-term liabilities and $29 million is included in long-term assets in
our consolidated balance sheets. Key assumptions used to value these benefit obligations and the cost of providing such
benefits, funding requirements and expense recognition include the discount rate and the expected long-term rate of return on
pension assets. If the actual trends in these factors are less favorable than our assumptions, this could have an adverse effect on
our results of operations and financial condition.
We may suffer future asset impairment and other restructuring charges, including write downs of long-lived assets,
goodwill, or intangible assets.
We have taken, are taking, and may take future restructuring actions to realign and resize our production capacity and cost
structure to meet current and projected operational and market requirements. Charges related to these actions or any further
restructuring actions may have a material adverse effect on our results of operations and financial condition. We cannot ensure
that any current or future restructuring actions will be completed as planned or achieve the desired results.
Additionally, from time to time, we have recorded asset impairment losses relating to specific plants and operations.
Generally, we record asset impairment losses when we determine that our estimates of the future undiscounted cash flows from
an operation will not be sufficient to recover the carrying value of that facility’s building, fixed assets and production tooling.
For goodwill, we perform a qualitative assessment of whether it is more likely than not that a reporting unit’s value is less than
its carrying amount. If the qualitative assessment is not met, the Company then performs a quantitative assessment by
comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. If the fair value of the
reporting unit is less than its carrying amount, the Company recognizes an impairment loss in an amount equal to the excess,
not to exceed the amount of goodwill allocated to the reporting unit. It is possible that we could incur such charges in the future
as changes in economic or operating conditions impacting the estimates and assumptions could result in additional impairment.
See Item 7. Significant Accounting Policies and Critical Accounting Estimates for a detailed discussion of our annual goodwill
and intangible assets impairment assessment.
Employee strikes and labor-related disruptions involving us or one or more of our customers or suppliers may
adversely affect our operations.
Our business is labor-intensive and we have a number of unions, works councils and other represented employees. A
strike or other form of significant work disruption by our employees would likely have an adverse effect on our ability to
operate our business. A labor dispute involving us or one or more of our customers or suppliers or that could otherwise affect
our operations could reduce our sales and harm our profitability. A labor dispute involving another supplier to our customers
that results in a slowdown or a closure of our customers’ assembly plants where our products are included in the assembled
parts or vehicles could also adversely affect our business and harm our profitability. In addition, certain UAW-represented
employees at GM, Ford and Stellantis initiated labor strikes in September 2023, lasting more than six weeks in duration. As
GM, Ford and Stellantis are among our largest customers, these labor strikes adversely impacted our financial condition,
operating results and cash flows for the year ended December 31, 2023. In addition, our inability or the inability of any of our
customers, our suppliers or our customers’ suppliers to negotiate an extension of a collective bargaining agreement upon its
expiration could reduce our sales and harm our profitability. Significant increases in labor costs as a result of the renegotiation
of collective bargaining agreements could also adversely affect our business and harm our profitability.
We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our
financial results.
We have currency exposures related to buying, selling and financing in currencies other than the local currencies of the
countries in which we operate. Approximately 65% of our net revenue for the year ended December 31, 2024 came from sales
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outside the U.S., which were primarily invoiced in currencies other than the U.S. dollar, and we expect net revenue from non-
U.S. markets to continue to represent a significant portion of our net revenue. Accordingly, significant changes in currency
exchange rates, particularly the Euro, Chinese Yuan (Renminbi) and Mexican Peso, could cause fluctuations in the reported
results of our businesses’ operations that could negatively affect our results of operations. Price increases caused by currency
exchange rate fluctuations may make our products less competitive or have an adverse effect on our margins. Currency
exchange rate fluctuations may also disrupt the business of our suppliers by making their purchases of raw materials more
expensive and more difficult to finance.
Historically, we have reduced our currency exposure by aligning our costs in the same currency as our revenues or, if that
is impracticable, through financial instruments that provide offsets or limits to our exposures, which are opposite to the
underlying transactions. However, any measures that we may implement to reduce the effect of volatile currencies and other
risks of our global operations may not be effective.
We face risks associated with doing business in various national and local jurisdictions.
The majority of our manufacturing and distribution facilities are in Mexico, China and other countries in Asia Pacific,
Eastern and Western Europe, South America and Northern Africa. We also purchase raw materials and other supplies from
many different countries around the world. For the year ended December 31, 2024, approximately 65% of our net revenue came
from sales outside the U.S. International operations are subject to certain risks inherent in doing business globally, including:
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exposure to local economic, political and labor conditions;
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unexpected changes in laws, regulations, economic and trade sanctions, trade or monetary or fiscal policy, including
interest rates, foreign currency exchange rates and changes in the rate of inflation in the U.S. and other countries;
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tariffs, quotas, customs and other import or export restrictions and other trade barriers;
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expropriation and nationalization;
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difficulty of enforcing agreements, collecting receivables and protecting assets through certain non-U.S. legal
systems;
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reduced technology, data or intellectual property protections;
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limitations on repatriation of earnings;
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withholding and other taxes on remittances and other payments by subsidiaries;
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investment restrictions or requirements;
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violence and civil unrest in local countries, including the conflict between Ukraine and Russia and the conflicts in
the Middle East; and
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compliance with the requirements of an increasing body of applicable anti-bribery laws, including the U.S. Foreign
Corrupt Practices Act, the U.K. Bribery Act and similar laws of various other countries.
Additionally, our global operations may also be adversely affected by political events, terrorist events and hostilities,
complications due to natural, nuclear or other disasters or the spread of an infectious disease, virus or other widespread illness.
For instance, effective January 1, 2024 and January 1, 2025, the government of Mexico implemented country-wide statutory
minimum wage increases of 20% and 12%, respectively. Additionally, the government of Mexico has indicated it may
implement other labor reforms, such as a bill to shorten the work week from 48 to 40 hours. While management has
implemented measures to mitigate the impact of these labor reforms on our cost structure, we cannot predict the ultimate future
impact on our business.
Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial
duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other
requirements. Changes in laws or policies governing the terms of trade, and in particular increased trade restrictions, tariffs or
taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse
effect on our business and financial results. For example, in February 2025, the U.S. government imposed or threatened to
impose new tariffs on imported products from Mexico, Canada and China. The impact of these tariffs is subject to a number of
factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the
future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become
available. Despite recent trade negotiations between the U.S. and the Mexican, Canadian and Chinese governments, given the
uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by
the U.S., Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate
the impact of such tariffs or other trade actions will be successful. In addition, in October 2022, the U.S. government imposed
additional export control restrictions targeting the export, re-export or transfer of, among other products, certain advanced
computing semiconductors, semiconductor manufacturing items and related technology to China, which could further disrupt
supply chains and adversely impact our business. Management continues to monitor the volatile geopolitical environment to
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identify, quantify and assess proposed or threatened duties, taxes or other business restrictions which could adversely affect our
business and financial results.
In addition, the outbreak of armed conflicts in the Middle East beginning in October 2023 has created numerous
uncertainties, including the risk that the conflicts spread throughout the broader region, and their impact on the global economy
and supply chains.
Furthermore, the conflict between Ukraine and Russia, which began in February 2022, has had, and is expected to
continue to have, negative economic impacts to both countries and to the European and global economies. In response to the
conflict, the European Union (“the E.U.”), the U.S. and other nations implemented broad economic sanctions against Russia.
These countries may impose further sanctions and take other actions as the situation continues. While the sanctions announced
to date have not had a material adverse impact on us, any further sanctions imposed or actions taken by these countries, and any
retaliatory measures by Russia in response, including restrictions on energy supplies from Russia to countries in the region and
asset expropriations, could increase our costs, reduce our sales and earnings or otherwise have an adverse effect on our
operations.
Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper,
aluminum, palladium and neon gases. Disruptions in the supply and volatility in the price of these materials and other inputs
produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business
and results of operations. The conflict has also increased the possibility of cyberattacks occurring, which could either directly or
indirectly impact our operations. Furthermore, the conflict has caused our customers to analyze their and their suppliers’
continued presence in the region and future customer production plans in the region remain uncertain.
We do not have a material physical presence in either Ukraine or Russia, with less than 1% of our workforce located in
the countries as of December 31, 2024 and less than 1% of our net sales for the year ended December 31, 2024 generated from
manufacturing facilities in those countries. However, the impacts of the conflict have adversely impacted, and may continue to
adversely impact, global economies, and in particular, the European economy, a region which accounted for approximately
33% of our net sales for the year ended December 31, 2024. As a result of the conflict, the Company ceased using certain long-
lived assets in Ukraine and consequently recorded non-cash impairment charges of $11 million during the year ended
December 31, 2023. These charges were recorded within cost of sales in the consolidated statements of operations.
We continue to monitor the situation and will seek to minimize its impact to our business, while prioritizing the safety and
well-being of our employees located in both countries and our compliance with applicable laws and regulations in the locations
where we operate. Any of the impacts mentioned above, among others, could adversely affect our business, business
opportunities, results of operations, financial condition and cash flows.
Increasing our manufacturing footprint in Asian markets, including China, and our business relationships with Asian
automotive manufacturers are important elements of our long-term strategy. In addition, our strategy includes increasing
revenue and expanding our manufacturing footprint in lower-cost regions. As a result, our exposure to the risks described above
may be greater in the future. The likelihood of such occurrences and their potential impact on us vary from country to country
and are unpredictable.
If we fail to manage our growth effectively or to integrate successfully any new or future business ventures,
acquisitions or strategic alliance into our business, our business could be materially adversely harmed. In addition, the
failure to realize the expected benefits of any past or future acquisition could adversely affect our business.
We have completed a number of acquisitions in recent years, including the acquisitions of Wind River and Intercable
Automotive Solutions S.r.l. in 2022. We expect to continue to pursue business ventures, acquisitions, and strategic alliances that
leverage our technology capabilities and enhance our customer base, geographic penetration and scale to complement our
current businesses and we regularly evaluate potential opportunities, some of which could be material. While we believe that
such transactions are an integral part of our long-term strategy, there are risks and uncertainties related to these activities.
Assessing a potential growth opportunity involves extensive due diligence. However, the amount of information we can obtain
about a potential growth opportunity may be limited, and we can give no assurance that new business ventures, acquisitions,
and strategic alliances will positively affect our financial performance or will perform as planned.
Furthermore, we may not be successful in fully or partially integrating companies that we acquire, including their
personnel, financial systems, distribution, operations and general operating procedures. We may also encounter challenges in
achieving appropriate internal control over financial reporting in connection with the integration of an acquired company. If we
fail to assimilate or integrate acquired companies successfully, our business, reputation and operating results could be
materially impacted. Likewise, our failure to integrate and manage acquired companies profitably may lead to future
impairment of any associated goodwill and intangible asset balances. Furthermore, if the expected benefits of an acquisition do
not meet the expectations of investors or securities analysts, the market price of our ordinary shares prior to the closing of the
acquisition may decline.
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We face risks related to cybersecurity for both our infrastructure and products and any cybersecurity breach or failure
of one or more key information technology systems, or those of third-parties with which we do business could have a
material adverse impact on our business or reputation.
Our ability to keep our business operating effectively depends on the functional and efficient operation of information
technology capabilities, both internally and externally. Our capabilities, as well as those of our customers, suppliers, partners
and service providers, are crucial to our operations and may contain confidential personal information, business-related
information or intellectual property. These capabilities are also susceptible to interruptions (including those caused by systems
failures, cyber-attacks and other natural or man-made incidents or disasters), which may be prolonged or go undetected. Cyber-
attacks are continually increasing in their frequency, sophistication and intensity. Additionally, some actors are using artificial
intelligence technology to launch more automated, targeted and coordinated attacks which further heightens these risks.
Although we have and continue to employ capabilities, processes and other security and privacy measures designed to prevent,
detect and mitigate the risk of such events, including but not limited to geographically diverse and resilient infrastructure, third-
party risk management and the implementation of proactive security and privacy measures, a significant or large-scale
interruption of our information technology capabilities could result in a confidentiality, integrity or availability data breach, and
adversely affect our ability to manage and keep operations running efficiently and effectively, and could result in significant
costs, regulatory investigations, fines or litigation. Incidents that result in a wider or sustained disruption to our business or
products, or result in a personal data breach, could have a material adverse effect on our business, reputation, financial
condition and results of operations. In addition, some of our employees work from home on a full-time or part-time basis,
which may increase our vulnerability to cyber and other information technology risks.
Some of our products, including but not limited to safety-critical products, contain complex digital technologies designed
to support today’s increasingly connected vehicles. Although we continue to employ capabilities, processes and other security
and privacy measures designed to reduce risks of cyber-attacks against our products, such measures may not provide absolute
security (and, in turn, privacy) and may not sufficiently mitigate all potential risks under all scenarios. Failure of such products
to effectively protect against attacks targeted at our products can negatively affect our brand and harm our business, prospects,
customers, financial condition and operating results.
Further, engineering and maintaining security for our systems and products may require significant costs. However,
failing to properly respond to and invest in information technology and cybersecurity advancements may limit our ability to
attract and retain customers, prevent us from offering similar products and services as those offered by our competitors or
inhibit our ability to meet regulatory, industry or other compliance requirements.
To date, we have not experienced a system failure, cyber-attack or security breach that has resulted in a material
interruption in our operations or material adverse effect on our financial condition. Our Board of Directors regularly reviews
relevant information technology and cybersecurity matters and receives periodic updates from information technology and
cybersecurity subject matter experts as part of its risk assessment procedures, including analysis of existing and emerging risks,
as well as plans and strategies to address those risks. While we continuously seek to expand and improve our information
technology systems and maintain adequate disclosure controls and procedures, there can be no assurance that we can adequately
anticipate all trends of the market, technology landscapes and threat landscapes, and there can be no assurance that such
measures will prevent interruptions or security breaches that could adversely affect our business.
Refer to Item 1C. Cybersecurity of this Annual Report on Form 10-K for further information on the Company’s risk
management, strategy and governance over cybersecurity matters.
Risks Related to Legal, Regulatory, Tax and Accounting Matters
We may incur material losses and costs as a result of warranty claims, product recalls, product liability and intellectual
property infringement actions that may be brought against us.
We face an inherent business risk of exposure to warranty claims and product liability in the event that our products fail
to perform as expected and, in the case of product liability, such failure of our products results in bodily injury and/or property
damage. The fabrication of the products we manufacture is a complex and precise process. Our customers specify quality,
performance and reliability standards. If flaws in either the design or manufacture of our products were to occur, we could
experience a rate of failure in our products that could result in significant delays in shipment and product re-work or
replacement costs. Although we engage in extensive product quality programs and processes, these may not be sufficient to
avoid product failures, which could cause us to:
•
lose net revenue;
•
incur increased costs such as warranty expense and costs associated with customer support;
•
experience delays, cancellations or rescheduling of orders for our products;
•
experience increased product returns or discounts; or
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•
damage our reputation,
all of which could negatively affect our financial condition and results of operations.
If any of our products are or are alleged to be defective, we may be required to participate in a recall involving such
products. Each vehicle manufacturer has its own practices regarding product recalls and other product liability actions relating
to its suppliers. However, as suppliers become more integrally involved in the vehicle design process and assume more of the
vehicle assembly functions, OEMs continue to look to their suppliers for contribution when faced with recalls and product
liability claims. A recall claim brought against us, or a product liability claim brought against us in excess of our available
insurance, may have a material adverse effect on our business. OEMs also require their suppliers to guarantee or warrant their
products and bear the costs of repair and replacement of such products under new vehicle warranties. Depending on the terms
under which we supply products to a vehicle manufacturer, a vehicle manufacturer may attempt to hold us responsible for some
or all of the repair or replacement costs of products under new vehicle warranties when the OEM asserts that the product
supplied did not perform as warranted. Although we cannot ensure that the future costs of warranty claims by our customers
will not be material, we believe our established reserves are adequate to cover potential warranty settlements. Our warranty
reserves are based on our best estimates of amounts necessary to settle future and existing claims. We regularly evaluate the
level of these reserves and adjust them when appropriate. However, the final amounts determined to be due related to these
matters could differ materially from our recorded estimates.
In addition, as we adopt new technology, we face an inherent risk of exposure to the claims of others that we have
allegedly violated their intellectual property rights. We cannot ensure that we will not experience any material warranty,
product liability or intellectual property claim losses in the future or that we will not incur significant costs to defend such
claims.
We may be adversely affected by laws or regulations, including environmental, health and safety and climate change,
regulation, litigation or other liabilities.
We are subject to various U.S. federal, state and local, and non-U.S., laws and regulations, including those related to
environmental, health and safety, financial and other matters.
We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof. The
introduction of new laws or regulations or changes in existing laws or regulations, or the interpretations thereof, could increase
the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial
condition, operating results and cash flows.
We are subject to laws and regulations governing, among other things:
•
the generation, storage, handling, use, transportation, presence of, or exposure to hazardous materials;
•
the emission and discharge of hazardous materials into the ground, air or water;
•
climate change;
•
the incorporation of certain chemical substances into our products, including electronic equipment; and
•
the health and safety of our employees.
We are also required to obtain permits from governmental authorities for certain operations. We cannot assure you that
we have been or will be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to
comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators. We could also be held
liable for any and all consequences arising out of human exposure to hazardous substances or other environmental damage.
Certain environmental laws impose liability, sometimes regardless of fault, for investigating or cleaning up contamination
on or emanating from our currently or formerly owned, leased or operated property, as well as for damages to property or
natural resources and for personal injury arising out of such contamination. Some of these environmental laws may also assess
liability on persons who arrange for hazardous substances to be sent to third-party disposal or treatment facilities when such
facilities are found to be contaminated. At this time, we are involved in various stages of investigation and cleanup related to
environmental remediation matters at a number of present and former facilities. The ultimate cost to us of site cleanups is
difficult to predict given the uncertainties regarding the extent of the required cleanup, the potential for ongoing environmental
monitoring and maintenance that could be required for many years, the interpretation of applicable laws and regulations,
alternative cleanup methods, and potential agreements that could be reached with governmental and third parties. While we
have environmental reserves of approximately $4 million at December 31, 2024 for the cleanup of presently-known
environmental contamination conditions, it cannot be guaranteed that actual costs will not significantly exceed these reserves.
We also could be named as a potentially responsible party at additional sites in the future and the costs associated with such
future sites may be material.
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Environmental laws and regulations are complex, change frequently and have tended to become more stringent over time.
Specifically, increased public awareness and concern regarding global climate change may continue to result in more
international, regional, federal, state and local requirements, or pressure from key stakeholders, to reduce or mitigate climate
change, which could impose significant operational restrictions, costs and compliance burdens upon our business or our
products. While we have budgeted for future capital and operating expenditures to maintain compliance with environmental
laws and regulations, we cannot ensure that environmental laws and regulations will not change or become more stringent in the
future. Therefore, we cannot ensure that our costs of complying with current and future environmental, health and safety laws
and regulations, and our liabilities arising from past or future releases of, or exposure to, hazardous substances will not
adversely affect our business, results of operations or financial condition. For example, adoption of GHG or climate change
rules in jurisdictions in which we operate facilities could require installation of emission controls, acquisition of emission
credits, emission reductions, or other measures that could be costly, and could also impact utility rates and increase the amount
we spend annually for energy. Furthermore, if we fail to achieve our sustainability goals and reduce our impact on the
environment, or if there becomes a public perception that we have failed to act responsibly regarding climate change and
sustainability, we could be exposed to negative publicity, which could adversely affect our business and reputation.
We may identify the need for additional environmental remediation or demolition obligations relating to facility
divestiture, closure and decommissioning activities.
As we sell, close and/or demolish facilities around the world, environmental investigations and assessments will need to
be performed. We may identify previously unknown environmental conditions or further delineate known conditions that may
require remediation or incur additional costs related to demolition or decommissioning activities, such as abatement of asbestos
containing materials or removal of storage tanks. Such costs could exceed our reserves.
We are involved from time to time in legal proceedings and commercial or contractual disputes, which could have an
adverse impact on our profitability and consolidated financial position.
We are involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant.
These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual
disputes, including warranty claims and other disputes with customers and suppliers; intellectual property matters; personal
injury claims; environmental, health and safety issues; tax matters; and employment matters.
While we believe our reserves are adequate, the final amounts required to resolve these matters could differ materially
from our recorded estimates and our results of operations could be materially affected.
For further information regarding our legal matters, see Item 3. Legal Proceedings. No assurance can be given that such
proceedings and claims will not have a material adverse effect on our profitability and consolidated financial position.
Developments or assertions by us or against us relating to intellectual property rights could materially impact our
business.
We own significant intellectual property, including a large number of patents and trade names, and are involved in
numerous licensing arrangements. Our intellectual property plays an important role in maintaining our competitive position in a
number of the markets we serve. Developments or assertions by or against us relating to intellectual property rights could
negatively impact our business. Significant technological developments by others also could materially and adversely affect our
business and results of operations and financial condition.
Taxing authorities could challenge our historical and future tax positions.
Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory
rates and changes in tax laws, or their interpretation, including the Organisation for Economic Co-operation’s (“OECD”) Pillar
Two Framework, and changes related to tax holidays or tax incentives. Our taxes could increase if certain tax holidays or
incentives are not renewed upon expiration, or if tax rates or regimes applicable to us in such jurisdictions are otherwise
increased. Existing income tax laws, regulations and related international agreements provide guidance and direction on the
allocations of income and applicable taxing rights among the countries in which we operate. Changes in these guidelines are
being contemplated at the local, national, regional (particularly in the European Union), and global levels (through
organizations like the G20 and the OECD). Any changes, especially if made inconsistently, could have a materially adverse
impact on our financial results.
The amount of tax we pay is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. We
have taken and will continue to take tax positions based on our interpretation of such tax laws. Additionally, in determining the
adequacy of our provision for income taxes, we regularly assess the likelihood of adverse outcomes resulting from tax
examinations. While it is often difficult to predict the final outcome or the timing of the resolution of a tax examination, our
reserves for uncertain tax benefits reflect the outcome of tax positions that are more likely than not to occur. While we believe
that we have complied with all applicable tax laws, there can be no assurance that a taxing authority will not have a different
27
interpretation of the law and assess us with additional taxes. Should additional taxes be assessed, this may result in a material
adverse effect on our results of operations and financial condition.
Risks Related to the Change in Tax Residency
We may be subject to various Swiss taxes as a result of the reorganization transaction.
In December 2024, Aptiv PLC completed a reorganization transaction, as defined in Item 1. Business of this Annual
Report on Form 10-K for further information on the Company’s reorganization transaction, in which Old Aptiv established a
new publicly-listed Jersey parent company, Aptiv Holdings Limited (“New Aptiv”), which is resident for tax purposes in
Switzerland. New Aptiv will be subject to annual capital taxes and corporate income taxes at the federal, cantonal and
communal levels. The overall (federal, cantonal, communal) effective corporate income tax rate may vary, but amount to a
maximum of approximately 15% in 2024 for companies resident in Schaffhausen, Switzerland.
Aptiv is subject to a 35% Swiss withholding tax on gross dividend payment amounts and share repurchases unless such
dividend payment or share repurchase is made out of qualifying capital contribution reserves or such payment is made via a
virtual second line of trading through a third party bank. Aptiv received a Swiss tax ruling confirming the creation of a material
qualifying capital contribution reserve. Aptiv expects to pay distributions to shareholders out of such reserves, and as a result,
any such distributions to shareholders would be exempt from the Swiss withholding tax. However, there can be no assurance
that the Swiss withholding rules will not be changed in the future, the amount of qualifying capital contribution reserves may be
depleted over time as Aptiv uses such reserves for distributions to shareholders or share repurchases and banks may not be
offering second line of trading services at the time the distribution is made. If Aptiv is unable to make a distribution out of
qualifying capital contribution reserves, it may consider making the distribution through a third party bank via a second line of
trading if available and if doing so would avoid the withholding tax. If it does not have capital reserves and is not able to secure
an efficient second line of trading, then any dividends paid by Aptiv or share repurchases by Aptiv will generally be subject to a
Swiss withholding tax at a rate of 35%.
Finally, Aptiv is also subject to a Swiss issuance stamp tax levied at a rate of 1% on the fair value of share issuances and
increases of our equity, other than in connection with qualifying restructurings like the Transaction. In addition, Aptiv is subject
to certain other Swiss indirect taxes (e.g., VAT and Swiss securities transfer stamp tax).
Refer to Item 1. Business of this Annual Report on Form 10-K for further information on the Company’s reorganization
transaction.
Planned Spin-off of Electrical Distribution Systems Business
We are pursuing a plan to separate our Electrical Distributions Systems business into an independent, publicly traded
company. The proposed separation is contingent upon the satisfaction of a number of conditions, may not be
completed on the currently contemplated timeline, or at all, and may not achieve the intended benefits.
On January 22, 2025, we announced our intent to pursue a separation of our Electrical Distribution Systems business
through a spin-off to our shareholders. The proposed spin-off is subject to various conditions, is complex in nature, and may be
affected by unanticipated developments, credit and equity markets, or changes in market conditions. As independent, publicly
traded companies, each business will be smaller and less diversified, with a narrower business focus and may be more
vulnerable to changing market conditions. The planned separation is intended to qualify as a tax-free transaction for both Swiss
and U.S. federal income tax purposes. Completion of the spin-off will be contingent upon customary closing conditions.
These or other unanticipated developments could delay or prevent the proposed spin-off or cause the proposed spin-off to
occur on terms or conditions that are less favorable than anticipated. Further, our Board of Directors could decide, either
because of a failure to satisfy closing conditions or because of market or other factors, to abandon the proposed spin-off.
We may not be able to achieve the full strategic and financial benefits that we anticipate to result from the spin-off, or
such benefits may be delayed or not occur at all. The anticipated benefits of the spin-off are based on a number of assumptions,
some of which may prove incorrect. We also expect to incur significant expenses in connection with the spin-off, certain of
which will be incurred even if the spin-off is not completed. Executing the spin-off will require significant resources, time and
attention from our senior management and employees, which could divert attention and resources away from other projects and
the day-to-day operation of our business We may experience negative reactions from financial markets if we do not complete
the spin-off in a reasonable time period. Following the proposed separation, the combined value of the ordinary shares of the
two publicly-traded companies may not be equal to or greater than what the value of our ordinary shares would have been had
the proposed separation not occurred.
Any of these factors could have a material adverse effect on our business, financial condition, results of operations, cash
flows or the price of our ordinary shares.
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General Risk Factors
Any changes in consumer credit availability or cost of borrowing could adversely affect our business.
Declines in the availability of consumer credit and increases in consumer borrowing costs have negatively impacted
global automotive sales and resulted in lower production volumes in the past. Substantial declines in automotive sales and
production by our customers could have a material adverse effect on our business, results of operations and financial condition.
In addition, the recent and acute volatility among certain financial institutions in the U.S., have raised questions regarding
the stability of the banking sector in the U.S. and, while such volatility has not adversely affected our operations, it has had an
adverse impact on the equity and credit markets. Any reoccurrence of these conditions has the potential to adversely impact
consumer credit availability or the cost of borrowing, which in turn could adversely impact our business.
We may lose or fail to attract and retain key salaried employees and management personnel.
An important aspect of our competitiveness is our ability to attract and retain key salaried employees and management
personnel. Our ability to do so is influenced by a variety of factors, including the compensation we award and the competitive
market position of our overall compensation package. We may not be as successful as competitors at recruiting, assimilating
and retaining highly skilled personnel. The loss of the services of any member of senior management or a key salaried
employee could have an adverse effect on our business.
ITEM 1B. UNRESOLVED STAFF COMMENTS
We have no unresolved SEC staff comments to report.
ITEM 1C. CYBERSECURITY
Aptiv has a risk-based cybersecurity program, dedicated to protecting our data, products and information technology
systems as well as data belonging to our customers, suppliers and employees. Our ability to keep our business operating
effectively depends on the functional and efficient operation of information technology capabilities, both internally and
externally. Our capabilities, as well as those of our customers, suppliers, partners and service providers, are crucial to our
operations and may contain confidential personal information, sensitive business-related information or intellectual property.
These capabilities are also susceptible to interruptions (including those caused by systems failures, cyber-attacks and other
natural or man-made incidents or disasters), which may be prolonged or go undetected.
Risk Management and Strategy
Our cross-functional cybersecurity teams are responsible for addressing both enterprise and product cybersecurity risks.
These teams, which are comprised of experts both within the organization and externally, utilize a defensive cybersecurity
strategy with multiple layers of cybersecurity controls to protect our data (and data of others in our possession), systems and
products.
Enterprise and product cybersecurity are incorporated into the Company’s overall risk management process. On a
monthly basis, the Company’s cross-functional Enterprise Risk Management Committee meets to discuss short-term and long-
term enterprise-wide risks and necessary action plans to mitigate those risks. The Chief Information Security Officer (the
“CISO”) regularly presents to the Company’s Enterprise Risk Management Committee on key cybersecurity risks, threats and
developments, as well as the Company’s strategies to mitigate those risks.
Enterprise Cybersecurity
The Company’s Enterprise Cybersecurity team, led by the Chief Information Officer (“CIO”), is responsible for
identifying, assessing the severity of, managing and remediating cybersecurity risks to the Company’s information technology
infrastructure. Risks are identified through vulnerability hunting, infrastructure penetration testing, threat intelligence activities
and other processes defined by the infrastructure Governance, Risk and Compliance (“GRC”) assessment program utilized by
the Company. Furthermore, this team seeks to reduce cybersecurity risks through a number of activities, including annual
cybersecurity training for the majority of the Company’s employees, phishing tests, compliance assessments, vulnerability and
noncompliance remediation and the implementation and maintenance of new cybersecurity technology.
Third-party service providers are also utilized by the Enterprise Cybersecurity team to play a supporting role in incident
response, threat intelligence, firewall management, vulnerability management and endpoint management and detection.
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Aptiv is also exposed to cybersecurity risks at third-parties, such as suppliers, customers, service providers and
consultants. Third-party risk to the Company is identified through an internal third-party risk management process, which
involves analyzing third parties for cybersecurity risk at onboarding and throughout the duration of their relationship with the
Company. For third-parties with a high cyber risk, we also utilize external firms to monitor such third-parties for threats and to
provide remediation support as needed.
Product Cybersecurity
The Company’s Product Cybersecurity team, led by the Chief Technology Officer (the “CTO”), is responsible for
assessing and managing the Company’s cybersecurity risk as it relates to Aptiv’s product portfolio. Risks are identified through
threat intelligence, security testing, including penetration testing, audits and other processes defined by the Company’s product
cybersecurity GRC program. The processes by which the Product Cybersecurity team manages automotive product security
risks have been audited, assessed and certified as compliant with various applicable international regulatory standards by
independent third-party auditors.
Governance
Enterprise Cybersecurity
The Company’s Enterprise Cybersecurity Security Operation’s Center (“SOC”), which is supervised by the CIO, is
responsible for identifying, assessing and managing the Company’s risks from cybersecurity threats, as well as for responding
to cybersecurity incidents. The SOC management team carries a diverse array of applicable cybersecurity and information
technology credentials and generally has over twenty years of experience in cybersecurity. When an infrastructure cybersecurity
incident occurs, the SOC initiates communications to the appropriate groups within the Company, which may include various
members of the Company’s management, including the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer
and Chief Operating Officer.
Depending on the severity and the nature of the incident, an investigation and impact mitigation protocols may be
triggered. External experts or agencies may also be engaged in accordance with the Company’s policies and procedures. Upon
conclusion of the active investigation of an incident, the SOC is required to identify the cause of the incident, formally report to
Company leadership, and initiate changes to protect against a recurrence of the incident, among other procedures.
Table top exercises are also held annually and are designed to practice and validate existing incident response plans, as
well as to identify the plans’ respective strengths and weaknesses. These exercises test the response capabilities of both
technical and executive level resources, including key vice presidents, senior company leaders and cross-functional capabilities,
such as with the Product Cybersecurity team as well as with the Legal, Privacy and Sales teams.
Product Cybersecurity
The Product Security Incident Response Team (the “PSIRT”), which is supervised by the CTO, is responsible for
responding to product related cybersecurity incidents, which at times involve collaborating with the Enterprise Cybersecurity
SOC. The PSIRT team regularly analyzes vulnerabilities reported by threat intelligence and public vulnerability reporting
databases and determines whether any of those vulnerabilities are present in the Company’s products. Vulnerabilities identified
are reviewed by the Vice President of Product Security on a weekly basis with involvement from the CTO and the Company’s
legal staff as necessary. For all vulnerabilities identified, the PSIRT reviews whether adequate mitigations are already in place.
In situations where adequate mitigations are not present, the PSIRT works with the customer to address the concern which may
involve adding additional mitigations to the product.
Board of Directors Oversight
The Company’s Board of Directors (the “Board”) takes an active role in risk oversight related to cybersecurity matters,
primarily through the Audit Committee (the “AC”), which covers enterprise cybersecurity risk, and the Innovation and
Technology Committee (the “ITC”), which covers product cybersecurity risk. The Board, individually and through the AC and
ITC, regularly reviews relevant information technology and cybersecurity matters and receives periodic updates from
information technology and cybersecurity subject matter experts as part of its risk assessment procedures, including analysis of
existing and emerging risks, as well as plans and strategies to address those risks. In connection with the Board’s risk
management oversight responsibility, the entire Board receives a full briefing from management annually on cybersecurity
matters, as well as periodic briefings based on specific requests or current events. On a regular basis, the Board also reviews the
Company’s enterprise risk management program, within which the Company’s cybersecurity processes have been integrated, as
described above.
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The Board and AC regularly review the identification and management of enterprise cybersecurity risks and review
regular reports from management on system vulnerabilities and security measures in effect to deter or mitigate breaches or
hacking activities. The AC also reviews our guidelines and policies with respect to risk assessment and management of our
major financial and information technology risk exposures, including enterprise cybersecurity, along with the monitoring and
mitigation of identified exposures.
The Board and ITC regularly review the identification and management of product cybersecurity risks and review regular
reports from management on risks and mitigation strategies in effect to reduce product cybersecurity risk. The ITC also reviews
our guidelines and policies with respect to risk assessment and management of product security risks, including both our
approach toward a secure systems development lifecycle and product security incident response.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially
affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all
risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident. For
more information about these risks, please refer to Item 1A. Risk Factors of this Annual Report on Form 10-K — “We face
risks related to cybersecurity for both our infrastructure and products and any cybersecurity breach or failure of one or more key
information technology systems, or those of third-parties with which we do business could have a material adverse impact on
our business or reputation.”
ITEM 2. PROPERTIES
As of December 31, 2024, we owned or leased 140 major manufacturing sites and 11 major technical centers. A
manufacturing site may include multiple plants and may be wholly or partially owned or leased. We also have many smaller
manufacturing sites, sales offices, warehouses, engineering centers, joint ventures and other investments strategically located
throughout the world. We have a presence in 49 countries. The following table shows the regional distribution of our major
manufacturing sites by the operating segment that uses such facilities:
North America
Europe,
Middle East
& Africa
Asia Pacific
South America
Total
Signal and Power Solutions ...............................
46
42
38
5
131
Advanced Safety and User Experience ..............
2
4
3
—
9
Total ...............................................................
48
46
41
5
140
In addition to these manufacturing sites, we had 11 major technical centers: four in North America; two in Europe,
Middle East and Africa; and five in Asia Pacific.
Of our 140 major manufacturing sites and 11 major technical centers, which include facilities owned or leased by our
consolidated subsidiaries, 66 are primarily owned and 85 are primarily leased.
We frequently review our real estate portfolio and develop footprint strategies to support our customers’ global plans,
while at the same time supporting our technical needs and controlling operating expenses. We believe our evolving portfolio
will meet current and anticipated future needs.
ITEM 3. LEGAL PROCEEDINGS
We are from time to time subject to various actions, claims, suits, government investigations, and other proceedings
incidental to our business, including those arising out of alleged defects, breach of contracts, competition and antitrust matters,
product warranties, intellectual property matters, personal injury claims and employment-related matters. It is our opinion that
the outcome of such matters will not have a material adverse impact on our consolidated financial position, results of
operations, or cash flows. With respect to warranty matters, although we cannot ensure that the future costs of warranty claims
by customers will not be material, we believe our established reserves are adequate to cover potential warranty settlements.
However, the final amounts required to resolve these matters could differ materially from our recorded estimates.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
31
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s ordinary shares are publicly listed on the New York Stock Exchange under the symbol “APTV.”
As of January 31, 2025, there was 1 shareholder of record of our ordinary shares.
The following graph reflects the comparative changes in the value from December 31, 2019 through December 31, 2024,
assuming an initial investment of $100 and the reinvestment of dividends, if any in (1) our ordinary shares, (2) the S&P 500
index and (3) the Automotive Peer Group. Historical performance may not be indicative of future shareholder returns.
Stock Performance Graph
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Aptiv PLC (1)
S&P 500 (2)
Automotive Peer Group (3)
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
*
$100 invested on December 31, 2019 in our stock or in the relevant index, including reinvestment of dividends. Fiscal year ended December 31, 2024.
(1)
Aptiv PLC
(2)
S&P 500 – Standard & Poor’s 500 Total Return Index
(3)
Automotive Peer Group – Adient plc, American Axle & Manufacturing Holdings, Inc., Aptiv PLC, Blink Charging Co., BorgWarner Inc., Canoo Inc.,
Cooper-Standard Holdings Inc., Dana Incorporated, Dorman Products, Inc., Driven Brands Holdings Inc., Ford Motor Company, Fox Factory Holding
Corp., General Motors Company, Gentex Corporation, Gentherm Incorporated, Genuine Parts Company, Holley Inc., Lear Corporation, LKQ
Corporation, Lucid Group, Inc., Luminar Technologies, Inc., Monro, Inc., PHINIA Inc., QuantumScape Corporation, Rivian Automotive, Inc., SES AI
Corporation, Standard Motor Products, Inc., Stoneridge, Inc., Tesla, Inc., The Goodyear Tire & Rubber Company, Valvoline Inc.,Visteon Corporation,
and XPEL, Inc.
Aptiv PLC (1) ...........................................
$
100.00 $
137.52 $
174.11 $
98.30 $
94.70 $
63.84
S&P 500 (2) ..............................................
$
100.00 $
118.40 $
152.39 $
124.79 $
157.59 $
197.02
Automotive Peer Group (3) ......................
$
100.00 $
291.17 $
433.35 $
183.92 $
296.83 $
434.04
Company Index
December 31,
2019
December 31,
2020
December 31,
2021
December 31,
2022
December 31,
2023
December 31,
2024
32
Equity Compensation Plan Information
The table below contains information about securities authorized for issuance under equity compensation plans. The
features of these plans are discussed further in Note 21. Share-Based Compensation to our audited consolidated financial
statements.
Plan Category
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights (a)
Weighted-Average Exercise
Price of Outstanding
Options, Warrants and
Rights (b)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(excluding securities
reflected in column (a)) (c)
Equity compensation plans approved by
security holders .............................................
2,908,742 (1)
$
— (2)
8,118,910 (3)
Equity compensation plans not approved by
security holders .............................................
—
—
—
Total .............................................................
2,908,742
$
—
8,118,910
(1)
Includes (a) 30,497 outstanding restricted stock units granted to our Board of Directors which were granted under the 2024 Aptiv PLC Long Term
Incentive Plan, as amended and restated effective April 24, 2024 (the “2024 LTIP”) and (b) 2,878,245 outstanding time- and performance-based
restricted stock units granted to our employees, of which 524,323 were granted under the 2024 LTIP and 2,353,922 were granted under the Aptiv PLC
Long-Term Incentive Plan, as amended and restated effective April 23, 2015.
(2)
The restricted stock units have no exercise price.
(3)
Remaining shares available under the 2024 LTIP.
Repurchase of Equity Securities
There were no repurchases of equity securities during the quarter ended December 31, 2024. In July 2024, the Board of
Directors authorized a new share repurchase program of up to $5.0 billion. This program commenced following completion of
the Company’s January 2019 share repurchase program of up to $2.0 billion, which was approved by the Board of Directors in
January 2019. On August 1, 2024, under the existing and new authorizations, the Company entered into an accelerated share
repurchase program to repurchase an aggregate amount of $3.0 billion of Aptiv’s ordinary shares (the “ASR Agreements”).
Under the terms of the ASR Agreements, the Company made an aggregate payment of $3.0 billion (the “Repurchase Price”)
and received initial deliveries of approximately 30.8 million ordinary shares in aggregate, with a value of $2.25 billion, which
were retired immediately and recorded as a reduction to shareholders’ equity. The final settlements under the ASR Agreements
are scheduled to occur no later than the second quarter of 2025, and in each case may be accelerated at the option of the
applicable counterparty. As of December 31, 2024, approximately $2,515 million remained available remained available under
the July 2024 program.
ITEM 6. [RESERVED]
Not applicable.
33
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is
intended to help you understand the business operations and financial condition of the Company for the year ended
December 31, 2024. This discussion should be read in conjunction with Item 8. Financial Statements and Supplementary Data.
Our MD&A is presented in seven sections:
•
Executive Overview
•
Consolidated Results of Operations
•
Results of Operations by Segment
•
Liquidity and Capital Resources
•
Off-Balance Sheet Arrangements
•
Significant Accounting Policies and Critical Accounting Estimates
•
Recently Issued Accounting Pronouncements
Executive Overview
Our Business
We are a global technology company focused on making the world safer, greener and more connected. We deliver end-
to-end mobility solutions, enabling our customers’ transition to a more electrified, software-defined future. We design and
manufacture vehicle components and provide electrical, electronic and active safety technology to the global automotive and
commercial vehicle markets, creating the software and hardware foundation for vehicle features and functionality. Our
Advanced Safety and User Experience segment is focused on providing the necessary software and advanced computing
platforms, and our Signal and Power Solutions segment is focused on providing the requisite networking architecture required
to support the integrated systems in today’s complex vehicles. Together, our businesses develop the ‘brain’ and the ‘nervous
system’ of increasingly complex vehicles, providing integration of the vehicle into its operating environment.
We are one of the largest vehicle technology suppliers and our customers include the 25 largest automotive OEMs in the
world.
In December 2024, Old Aptiv (as defined below) completed its previously announced reorganization transaction (the
“Transaction,” or the “reorganization transaction”), in which Old Aptiv established a new publicly-listed Jersey parent
company, Aptiv Holdings Limited (“New Aptiv”), which is resident for tax purposes in Switzerland. As a result of the
Transaction, all issued and outstanding ordinary shares of Old Aptiv were exchanged on a one-for-one basis for newly issued
ordinary shares of New Aptiv. Following consummation of the Transaction, holders of Old Aptiv shares became ordinary
shareholders of New Aptiv, Old Aptiv became a wholly-owned subsidiary of New Aptiv and New Aptiv was renamed “Aptiv
PLC.” The previous publicly-listed Jersey parent company, which was an Irish tax resident, is referred to as “Old Aptiv”
throughout this Annual Report on Form 10-K. New Aptiv’s ordinary shares are publicly traded on the New York Stock
Exchange (“NYSE”) under the symbol “APTV,” the same symbol under which the Old Aptiv shares were previously listed.
Aptiv PLC remains a public limited company incorporated under the laws of Jersey, and continues to be subject to U.S.
Securities and Exchange Commission reporting requirements.
In December 2024, following the completion of the Transaction, Old Aptiv merged with and into Aptiv Swiss Holdings
Limited (“Aptiv Swiss Holdings”), a newly formed Jersey incorporated private limited company, and a direct, wholly-owned
subsidiary of New Aptiv, with Aptiv Swiss Holdings surviving as a direct, wholly owned subsidiary of New Aptiv, and Old
Aptiv ceasing to exist. Except as otherwise noted, all property, rights, privileges, powers and franchises of Old Aptiv vested in
Aptiv Swiss Holdings, and all debts, liabilities and duties of Old Aptiv became debts, liabilities and duties of Aptiv Swiss
Holdings. As a result of the Transaction described above, there were no material changes in Aptiv PLC’s operations or
governance.
In connection with the Transaction, New Aptiv assumed Old Aptiv’s Long-Term Incentive Plans and its existing
obligations in connection with awards granted thereunder, and Aptiv Swiss Holdings (i) entered into a supplemental indenture
to each indenture in which Aptiv Swiss Holdings assumed all of Old Aptiv’s obligations under each series of Old Aptiv’s
outstanding Notes and (ii) entered into an assumption and/or supplement agreement relating to each Credit Agreement in which
New Aptiv assumed all of Old Aptiv’s obligations under each Credit Agreement as the “parent entity” thereunder. In addition,
New Aptiv (i) entered into a supplemental indenture to each indenture in which New Aptiv guaranteed the outstanding Notes
and (ii) entered into a guarantee joinder relating to each Credit Agreement in which New Aptiv guaranteed the obligations
under each Credit Agreement. Following the reorganization transaction, Aptiv Swiss Holdings replaced Old Aptiv as an obligor
34
under the Credit Agreements, the senior notes and the junior notes, and New Aptiv became a guarantor under the Credit
Agreements (and will act as the “parent entity” thereunder) and the indentures.
Planned Spin-off of Electrical Distribution Systems Business
On January 22, 2025, we announced our intention to pursue a separation of our Electrical Distribution Systems business
through a transaction expected to be treated as a tax-free spin-off to Aptiv’s shareholders. The Company plans to complete the
separation by March 31, 2026, subject to customary closing conditions.
Business Strategy
We believe the Company is well-positioned for growth from the industry’s accelerating transition to software-defined
vehicles, the commercialization of active safety, the adoption of autonomous driving technologies, enhanced user experiences
and connected services, and providing the software, advanced computing platforms and networking architecture required to do
so. We have successfully created a competitive cost structure while investing in research and development to grow our product
offerings, which are aligned with the high-growth industry mega-trends, and re-aligned our manufacturing footprint into an
efficient, low-cost regional service model, focused on increasing our profit margins.
Our 2024 performance reflects our solid execution and cost reduction initiatives despite declines in volume and the global
inflationary environment. Our recent financial and business achievements include the following:
•
Generating new business awards of approximately $31 billion, based on expected volumes and prices, validating our
industry leading portfolio of advanced technologies tied to the accelerating megatrends in our industry
•
Delivering strong earnings growth over the prior year despite declines in volume and the global inflationary
environment
•
Producing $1.8 billion of operating income, or $2.4 billion of adjusted operating income, and cash flow from
operations of $2.4 billion, demonstrating strong operating execution in the face of continuing material cost inflation
◦
Delivering expanded operating income margin of 9.3%, or adjusted operating income margin of 12.0%,
driven by strong operating performance and cost reduction initiatives
•
Funding $4.1 billion in share repurchases, including $3.0 billion under the terms of the Company’s accelerated share
repurchase program (“ASR”)
•
Refinancing over $1.4 billion in near-term debt maturities and successfully maintaining a well-laddered debt maturity
profile, providing financial flexibility and reducing short-term refinancing risks
•
Restructuring our Motional AD LLC (“Motional”) joint venture ownership, reducing our common equity interest in
Motional from 50% to 15%, eliminating future cash funding requirements while maintaining access to insights and
market intelligence
•
Continuing our relentless focus on cost structure and operational optimization
◦
Maximizing our operational flexibility and profitability at all points in the normal automotive business cycle,
by having approximately 97% of our hourly workforce based in best cost countries, and approximately 31%
of our hourly workforce composed of contingent employees.
•
Enhancing our optimized full system, edge-to-cloud capabilities
◦
Ongoing advancement in adapting advanced driver assistance systems to leverage containerized, service-
based software architecture; and
◦
Increasing our customer choice and regional flexibility through investments in computer vision providers
StradVision, Inc. (“StradVision”) and MAXIEYE Automotive Technology (Ningbo) Co., Ltd. (“Maxieye”).
•
Meeting the sustainability-linked targets for greenhouse gas emissions and workplace safety within our Credit
Agreement.
Our strategy is to build on these accomplishments and continue to develop and manufacture innovative market-relevant
products for a diverse base of customers around the globe and leverage our lean and flexible cost structure to achieve strong and
disciplined earnings growth and returns on invested capital. Through our culture of innovation and world class engineering
capabilities we intend to employ our rigorous, forward-looking product development process to deliver new technologies that
provide solutions to our customers. We are committed to creating value for our shareholders, including through the continued
repurchase of shares. Our key strategic priorities include:
Commercializing the high-tech evolution of the automotive industry. The automotive industry is increasingly evolving
towards the implementation of software-dependent components and solutions. In particular, the industry is focused on the
development of advanced driver assistance technologies, with the goal of developing and introducing a commercially-viable,
fully automated driving experience. We expect automated driving technologies will provide strong societal benefit as well as
the opportunity for long-term growth for our product offerings in this space. We are focused on enabling and delivering end-to-
35
end smart mobility solutions, enabling our customers’ transition to more electrified, software-defined vehicles, accelerating the
commercialization of active safety and autonomous driving technologies and providing enhanced user experience and
connected services.
As part of our strategy to harness the full potential of connected intelligent systems across industries, strengthen our
capabilities in software-defined mobility and to enable advanced smart vehicle architecture changes, we acquired Wind River in
December 2022. Wind River is a global leader in delivering software for the intelligent edge for multiple industries, including
automotive, by leveraging mixed-criticality software products and solutions enabling customers to develop in the cloud, deploy
over the air and run and manage software at the vehicle edge.
We are also continuing to develop market-leading automated driving solutions such as automated driving software,
sensing and perception technologies enhanced through artificial intelligence and machine learning, as well as the underlying
architecture technologies capable of supporting safety-critical applications. We believe we are well-aligned with industry
technology trends that will help to support sustainable future growth in this space and have partnered with leaders in their
respective fields to advance the pace of development and commercialization of these emerging technologies.
In March 2020, we completed a transaction with Hyundai Motor Group (“Hyundai”) to form Motional, a joint venture
focused on the design, development and commercialization of autonomous driving technologies. Although we believe our
strategic partnerships have us well-aligned with industry technology mega-trends in these evolving areas, the timeline necessary
to produce commercially viable autonomous vehicles has been extended and is still subject to significant uncertainty, which
resulted in additional funding requirements for Motional. In April 2024, Aptiv and Hyundai entered into an agreement to
restructure Aptiv’s ownership interest in Motional and for Hyundai to provide additional funding to Motional, which also
eliminated any requirements for additional future funding from Aptiv. These transactions, which were completed in May 2024,
resulted in the reduction of our common equity interest in Motional from 50% as of December 31, 2023 to approximately 15%.
The total gain recorded as a result of these transactions was approximately $641 million ($2.50 per diluted share) during the
year ended December 31, 2024, within net gain on equity method transactions in the consolidated statements of operations.
Refer to Note 5. Investments in Affiliates to the audited consolidated financial statements contained herein for further
information on these transactions.
There are many risks associated with these evolving areas, including the high development costs of active safety and
autonomous driving technologies, the uncertain timing of customer and consumer adoption of these technologies, increased
competition from entrants outside the traditional automotive industry and evolving regulations, such as the guidance for
automated driving systems published by the U.S. Department of Transportation. While we believe we are well-positioned in
these markets, the high development cost of active safety and autonomous driving technologies may result in a higher risk of
exposure to the success of new or disruptive technologies different than those being developed by us or our partners and
ultimately there can be no assurance that we will be successful in our efforts to develop these technologies.
Leveraging our engineering and technological capabilities. We seek to leverage our strong product portfolio tied to the
industry’s key mega-trends with our global footprint to increase our revenues, as well as committing to substantial annual
investment in research and development to maintain and enhance our leadership in new mobility solutions across each of our
product lines.
Targeting the right business with the right customers. We intend to be strategic in our pursuit of new business and
customers in order to achieve disciplined, above-market growth. We conduct in-depth analysis of market share and product
trends by region in order to prioritize research, development and engineering spend for the customers that we believe will be
successful. Collaboration with customers in our 11 major technical centers around the world helps us develop innovative
product solutions designed to meet their needs. As more OEMs design vehicles for global platforms, where the same vehicle
architecture is shared among different regions, we are well suited to provide global design and engineering support while
manufacturing these products for a specific regional market.
Capitalizing on our scale, global footprint and established position in key growth markets. We intend to generate
sustained growth by capitalizing on the breadth and scale of our operating capabilities. Our global footprint provides us
important proximity to our customers’ manufacturing facilities and allows us to serve them in every region in which they
operate. We anticipate that we will continue to build upon our extensive geographic reach to capitalize on growing automotive
markets, particularly in China. In addition, our presence in best cost countries positions us to realize incremental margin
improvements as the global balance of automotive production shifts towards key growth markets.
Leveraging our lean and flexible cost structure to deliver profitability and cash flow. We recognize the importance of
maintaining a lean and flexible cost structure in order to deliver stable earnings and cash flow in a cyclical industry. Our focus
is on maximizing and optimizing manufacturing output to meet increasing production requirements with minimal additions to
our fixed-cost base. Additionally, we are continuing to use a meaningful amount of temporary workers to ensure we have the
appropriate operational flexibility to scale our operations so that we can maintain our profitability as industry production levels
increase or contract.
36
Advancing and maintaining an efficient capital structure. We actively manage our capital structure in order to maintain
an investment grade credit rating and healthy capital ratios to support our business and maximize shareholder value. We will
continue to make adjustments to our capital structure in light of changes in economic conditions or as opportunities arise to
provide us with additional financial flexibility to invest in our business and execute our strategic objectives going forward.
Pursuing selected acquisitions and strategic investments. In recent years, we continued to complete selected acquisitions
and strategic investments in order to continue to leverage our technology capabilities and enhance and expand our
commercialization of new mobility solutions, product offerings, customer base, geographic penetration and scale to
complement our current businesses, while continuing to enhance our product offerings and competitive position in growing
market segments.
Accelerating an electric, zero-emissions future. We are committed to becoming carbon-neutral in our global operations
by 2030 and to achieving net carbon neutrality by 2040 as we transition away from carbon-intensive energy and processes in
our global operations. We also continue to focus on minimizing the overall environmental impact of vehicles as a key part of
our overall business strategy. We believe that this strong, foundational focus on sustainability makes Aptiv a partner of choice
for our customers, a desirable place to work for our employees and a valued contributor to the communities in which we
operate.
Trends, Uncertainties and Opportunities
Economic conditions. Our business is directly related to automotive sales and automotive vehicle production by our
customers. Automotive sales depend on a number of factors, including global and regional economic conditions. Global
automotive vehicle production decreased 1% (3% on an Aptiv weighted market basis, which represents global vehicle
production weighted to the geographic regions in which the Company generates its revenue, “AWM”) from 2023 to 2024,
reflecting vehicle production declines of 5% in Europe and 2% in North America, partially offset by increased production of
4% in China and 3% in South America, our smallest region. Refer to Note 22. Segment Reporting of the notes to the audited
consolidated financial statements, included in Item 8. Financial Statements and Supplementary Data of this Annual Report for
financial information concerning principal geographic areas.
On September 15, 2023, several of our largest customers’ collective bargaining agreements with the International Union,
United Automobile, Aerospace and Agricultural Implement Workers of America (the “UAW”), expired and the UAW
subsequently went on strike against General Motors (“GM”), Ford Motor Company (“Ford”) and Stellantis N.V. (“Stellantis”)
in the United States (the “U.S.”), causing work stoppages at certain of these customers’ vehicle production and parts
distribution facilities, which lasted approximately six weeks. Aptiv’s estimated total indirect and direct adverse impacts of these
labor strikes to revenue during 2023 were approximately $180 million. Refer to Part I, Item 1A. Risk Factors for further
discussion of the risks related to significant disruptions at our or our customers’ manufacturing facilities.
Economic volatility or weakness in North America, Europe, China or, to a lesser extent, South America, could result in a
significant reduction in automotive sales and production by our customers, which would have an adverse effect on our business,
results of operations and financial condition. Global inflationary pressures have, at times, both reduced consumer demand for
automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability,
which may continue in 2025. There is also potential that geopolitical factors could adversely impact the U.S. and other
economies, and specifically the automotive sector. In particular, changes to international trade agreements, such as the United
States-Mexico-Canada Agreement, increases in trade tariffs, import quotas and other trade restrictions or actions, including
retaliatory responses to such actions, or other political pressures could affect the operations of our OEM customers, resulting in
reduced automotive production in certain regions or shifts in the mix of production to higher cost regions. Increases in interest
rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit
availability. Additionally, economic weakness may result in shifts in the mix of future automotive sales (from vehicles with
more content such as luxury vehicles, trucks and sport utility vehicles toward smaller passenger cars). While our diversified
customer and geographic revenue base, along with our flexible cost structure, have well positioned us to withstand the impact
of industry downturns and benefit from industry upturns, shifts in the mix of global automotive production to higher cost
regions or to vehicles with less content could adversely impact our profitability.
Ukraine/Russia conflict. The conflict between Ukraine and Russia, which began in February 2022, has had, and is
expected to continue to have, negative economic impacts to both countries and to the European and global economies. In
response to the conflict, the European Union (the “E.U.”), the U.S. and other nations implemented broad economic sanctions
against Russia. These countries may impose further sanctions and take other actions as the situation continues.
Given the sanctions put in place by the E.U., U.S. and other governments, which restrict our ability to conduct business in
Russia, we initiated a plan in the second quarter of 2022 to exit our 51% owned subsidiary in Russia. As a result, the Company
determined that this subsidiary, which was reported within the Signal and Power Solutions segment, initially met the held for
sale criteria as of June 30, 2022. Consequently, during the year ended December 31, 2022, the Company recorded a pre-tax
charge of $51 million to impair the carrying value of the Russian subsidiary’s net assets to fair value.
37
On May 30, 2023, the Company completed the sale of its entire interest in the Russian subsidiary to JSC Samara Cables
Company, the sole minority shareholder in the Russian subsidiary, for a nominal amount in exchange for all of the Company’s
shares in the subsidiary. The Company did not record any incremental gain or loss resulting from this disposition. Refer to Note
20. Acquisitions and Divestitures to the audited consolidated financial statements contained herein for further detail on this
transaction.
Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper,
aluminum, palladium and neon gases. Disruptions in the supply and volatility in the price of these materials and other inputs
produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business
and results of operations. The conflict has also increased the possibility of cyberattacks occurring, which could either directly or
indirectly impact our operations. Furthermore, the conflict has caused our customers to analyze their continued presence in the
region and future customer production plans in the region remain uncertain.
We do not have a material physical presence in either Ukraine or Russia, with less than 1% of our workforce located in
the countries as of December 31, 2024 and less than 1% of our net sales for the year ended December 31, 2024 generated from
manufacturing facilities in those countries. However, the impacts of the conflict have adversely impacted, and may continue to
adversely impact, global economies, and in particular, the European economy, a region which accounted for approximately
33% of our net sales for the year ended December 31, 2024. As a result of the conflict, the Company ceased using certain long-
lived assets in Ukraine and consequently recorded non-cash impairment charges of $11 million during the year ended
December 31, 2023. These charges were recorded within cost of sales in the consolidated statements of operations.
Furthermore, as a result of the conflict, we estimate that the adverse impacts to revenue from Russia operations were
approximately $65 million during the year ended December 31, 2022.
We continue to monitor the situation and will seek to minimize its impact to our business, while prioritizing the safety and
well-being of our employees located in both countries and our compliance with applicable laws and regulations in the locations
where we operate. Any of the impacts mentioned above, among others, could adversely affect our business, business
opportunities, results of operations, financial condition and cash flows.
Global supply chain disruptions. Global supply chain disruptions could lead to interruptions in our production, which
could impact our ability to fully meet the vehicle production demands of OEMs at times due to events which are outside our
control. We will continue to actively monitor our global supply chain and will seek to aggressively mitigate and minimize the
impact of any future disruptions on our business.
In addition, we are carrying critical inventory items and key components, and we continue to procure productive, raw
material and non-critical inventory components in order to satisfy our customers’ vehicle production schedules. However, as a
result of our customers’ recent production volatility and cancellations, among other things, our balance of productive, raw and
component material inventories has increased substantially from customary levels as of both December 31, 2024 and 2023. We
will continue to actively monitor and manage inventory levels across all inventory types in order to maximize both supply
continuity and the efficient use of working capital.
Key growth markets. There have been periods of increased market volatility and moderation in the level of economic
growth in China, which resulted in periods of lower automotive production growth rates in China than those previously
experienced. Automotive production in China experienced growth of 4% in 2024, which follows growth of 10% in 2023.
Despite the market volatility and moderation in the level of economic growth in China, rising income levels in China and other
key growth markets are expected to result in stronger growth rates in these markets over the long-term. Our strong global
presence, and presence in these markets, has positioned us to experience above-market growth rates over the long-term. We
continue to expand our established presence in key growth markets, positioning us to benefit from the expected long-term
growth opportunities in these regions. We are capitalizing on our long-standing relationships with the global OEMs and further
enhancing our positions with the key growth market OEMs to continue expanding our worldwide leadership. We continue to
build upon our extensive geographic reach to capitalize on fast-growing automotive markets. We believe that our presence in
best cost countries positions us to realize incremental margin improvements as the global balance of automotive production
shifts towards the key growth markets.
We have a strong local presence in China, including a major manufacturing base and well-established customer
relationships. Each of our business segments have operations and sales in China. Our business in China remains sensitive to
economic and market conditions that impact automotive sales volumes in China, and may be affected if the pace of growth
slows as the Chinese market matures or if there are reductions in vehicle demand in China, such as during the COVID-19
pandemic and related governmental lockdowns in 2022. Estimated total indirect and direct adverse impacts to revenue as a
result of these lockdowns during 2022 was approximately $270 million. Our business in China may also be impacted by the
expanding market share of domestic Chinese OEMs in the China market, which has led to declines in revenue and market share
of non-Chinese OEMs, resulting in certain traditional OEMs taking steps to reduce or restructure their operations in China.
38
However, we continue to believe this market will benefit from long-term demand for new vehicles and stringent governmental
regulation driving increased vehicle content, including accelerated demand for electrified vehicles.
Market driven products. Our product offerings satisfy the OEMs’ needs to meet increasingly stringent government
regulations and meet consumer preferences for products that address the mega-trends of Safe, Green and Connected, leading to
increased content per vehicle, greater profitability and higher margins. With these offerings, we believe we are well-positioned
to benefit from the growing demand for vehicle content and technology related to safety, electrification, high speed data,
connectivity to the global information network and automated driving technologies. We are benefiting from the substantial
increase in vehicle content, software and electrification that requires a complex and reliable electrical architecture and systems
to operate, such as automated advanced driver assistance technologies, electrical vehicle monitoring, active safety systems, lane
departure warning systems, integrated vehicle cockpit displays, navigation systems and technologies that enable connected
infotainment in vehicles. Our ability to design a reliable electrical architecture that optimizes power distribution and/or
consumption is key to satisfying the OEMs’ needs to reduce emissions while continuing to meet consumer demand for
increased vehicle content and technology. While we have identified high voltage electrification systems as a key product
market, certain of our OEM customers have recently announced delays in their electric vehicle investment strategies amidst
reduced expectations for future consumer demand for these products.
Global capabilities. Many OEMs are continuing to adopt global vehicle platforms to increase standardization, reduce per
unit cost and increase capital efficiency and profitability. As a result, OEMs are selecting suppliers that have the capability to
manufacture products on a worldwide basis, as well as the flexibility to adapt to regional variations. Suppliers with global scale
and strong design, engineering and manufacturing capabilities, are best positioned to benefit from this trend. Our global
footprint enables us to serve the global OEMs on a worldwide basis as we gain market share with key growth market OEMs.
This regional model is structured primarily to service the North American market from Mexico, the South American market
from Brazil, the European market from Eastern Europe and North Africa, and the Asia Pacific market from China, and we have
continued to rotate our manufacturing footprint to best cost locations within these regions.
Our operations are subject to certain risks inherent in doing business globally, including military conflicts in regions in
which we operate, changes in laws or regulations governing labor, trade, or other monetary or tax fiscal policy changes,
including the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two Framework (the “Framework”),
tariffs, quotas, customs and other import or export restrictions or trade barriers.
Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial
duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other
requirements. Changes in laws or policies governing the terms of trade, and in particular increased trade restrictions, tariffs or
taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse
effect on our business and financial results. For example, in February 2025, the U.S. government imposed or threatened to
impose new tariffs on imported products from Mexico, Canada and China. The impact of these tariffs is subject to a number of
factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the
future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become
available. Despite recent trade negotiations between the U.S. and the Mexican, Canadian and Chinese governments, given the
uncertainty regarding the scope and duration of any new tariffs, as well as the potential for additional tariffs or trade barriers by
the U.S., Mexico, Canada, China or other countries, we can provide no assurance that any strategies we implement to mitigate
the impact of such tariffs or other trade actions will be successful. In addition, in October 2022, the U.S. government imposed
additional export control restrictions targeting the export, re-export or transfer of, among other products, certain advanced
computing semiconductors, semiconductor manufacturing items and related technology to China, which could further disrupt
supply chains and adversely impact our business. Management continues to monitor the volatile geopolitical environment to
identify, quantify and assess proposed or threatened duties, taxes or other business restrictions which could adversely affect our
business and financial results.
In addition, effective January 1, 2024 and January 1, 2025, the government of Mexico implemented country-wide
statutory minimum wage increases of 20% and 12%, respectively. Additionally, the government of Mexico has indicated it may
implement other labor reforms, such as a bill to shorten the work week from 48 to 40 hours. While management has
implemented measures to mitigate the impact of these labor reforms on our cost structure, we cannot predict the ultimate future
impact on our business.
Furthermore, the outbreak of armed conflicts in the Middle East beginning in October 2023 has created numerous
uncertainties, including the risk that the conflicts spread throughout the broader region, and their impact on the global economy
and supply chains. In addition, as described above, the conflict between Ukraine and Russia has also created numerous
economic uncertainties, including the potential for further sanctions against Russia, the impact on the global supply chain for
raw materials produced in each country, as well as increased logistics costs and transit times, and the actions of automotive
OEMs and suppliers as they relate to production plans in each country and within the region. We are also subject to risks
associated with actions taken by governmental authorities to impose changes in laws or regulations that restrict certain business
39
operations, trade or travel in response to a pandemic or widespread outbreak of an illness. The impacts of any of these factors
mentioned above, among others, could adversely affect our business, business opportunities, results of operations, financial
condition and cash flows.
Product development. The automotive technology and components industry is highly competitive and is characterized by
rapidly changing technology, evolving industry standards and changes in customer needs. Our ability to anticipate changes in
technology and regulatory standards and to successfully develop and introduce new and enhanced products on a timely and cost
competitive basis will be a significant factor in our ability to remain competitive. To compete effectively in the automotive
technology and components industry, we must be able to develop and launch new products to meet our customers’ demands in
a timely manner. With our innovative technologies and robust global engineering and development capabilities we are well
positioned to meet the increasingly stringent vehicle manufacturer demands and consumer preferences for high-technology
content in automobiles.
OEMs are increasingly looking to their suppliers to simplify vehicle design and assembly processes to reduce costs and
weight. As a result, suppliers that sell vehicle components directly to manufacturers (Tier I suppliers) have assumed many of
the design, engineering, research and development and assembly functions traditionally performed by vehicle manufacturers.
Suppliers that can provide fully-engineered solutions, systems and pre-assembled combinations of component parts are
positioned to leverage the trend toward system sourcing.
Engineering, design and development. Our history and culture of innovation have enabled us to develop significant
intellectual property and design and development expertise to provide advanced technology solutions that meet the demands of
our customers. We have a team of approximately 21,200 scientists, engineers and technicians focused on developing leading
product solutions for our key markets, located at 11 major technical centers in China, Germany, India, Mexico, Poland,
Singapore and the United States. Our total investment in research and development, including engineering, was approximately
$1.6 billion, $1.8 billion and $1.5 billion for the years ended December 31, 2024, 2023 and 2022, respectively, which includes
approximately $535 million, $492 million and $379 million of co-investment by customers and government agencies. Each year
we share some engineering expenses with OEMs and government agencies which generally ranges from 25% to 35% of
engineering expenses. This level of co-investment supports product development, accelerates the pace of innovation and
reduces the risk associated with successful commercialization of technological breakthroughs. We also encourage “open
innovation” and collaborate extensively with peers in the industry, government agencies and academic institutions.
In the past, suppliers often incurred the initial cost of engineering, designing and developing automotive component parts,
and recovered their investments over time by including a cost recovery component in the price of each part based on expected
volumes. Recently, we and many other suppliers have negotiated for cost recovery payments independent of volumes. This
trend reduces our economic risk.
We utilize a Technology Advisory Council, a panel of prominent global technology thought leaders, which helps us
anticipate cutting-edge technology trends and guides our product strategies and investments in technology with a focus on
developing advanced technologies to drive growth and foster innovation. This independent perspective assists Aptiv in pursuing
investments in the right technologies that create the most value for all of its stakeholders. We believe that our engineering and
technical expertise, together with our emphasis on continuing research and development, allow us to use the latest technologies,
materials and processes to solve problems for our customers and to bring new, innovative products to market. We believe that
continued engineering activities are critical to maintaining our pipeline of technologically advanced products. Given our strong
financial discipline, we seek to effectively manage fixed costs and efficiently rationalize capital spending by critically
evaluating the profit potential of new and existing customer programs, including investment in innovation and technology. We
maintain our engineering activities around our focused product portfolio and allocate our capital and resources to those products
with distinctive technologies. We expect expenditures for research and development activities, including engineering, net of co-
investment, to be approximately $1.1 billion for the year ended December 31, 2025.
We maintain a large portfolio of approximately 11,000 patents and protective rights in the operation of our business as of
December 31, 2024. While no individual patent or group of patents, taken alone, is considered material to our business, taken in
the aggregate, these patents provide meaningful protection for our products and technical innovations. Similarly, while our
trademarks are important to identify our position in the industry, we do not believe that any of these are individually material to
our business. We are actively pursuing marketing opportunities to commercialize and license our technology to both automotive
and non-automotive industries and we have selectively taken licenses from others to support our business interests. These
activities foster optimization of intellectual property rights.
Pricing. Cost-cutting initiatives adopted by our customers result in increased downward pressure on pricing. Our
customer supply agreements generally require step-downs in component pricing over the periods of production and OEMs have
historically possessed significant leverage over their outside suppliers because the automotive component supply industry is
fragmented and serves a limited number of automotive OEMs. Our profitability depends in part on our ability to generate
sufficient production cost savings in the future to offset price reductions. In addition, during recent years, global economies and
40
our industry were subjected to significant inflationary cost pressures, and these pressures may continue in 2025. We continue to
work with our customers, both through price recoveries and adjustments as well as future pricing adjustments as contracts
renew, to mitigate the impact of these inflationary pressures on our results of operations.
We are focused on maintaining a low fixed cost structure that provides us flexibility to remain profitable at all points of
the traditional vehicle industry production cycle. As a result, approximately 97% of our hourly workforce is located in best cost
countries. Furthermore, we have substantial operational flexibility by leveraging a large workforce of contingent workers,
which represented approximately 31% of the hourly workforce as of December 31, 2024. However, we will continue to adjust
our cost structure and optimize our manufacturing footprint in response to changes in the global and regional automotive
markets and in order to increase investment in advanced technologies and engineering, as evidenced by our ongoing
restructuring programs focused on reducing our global overhead costs and on the continued rotation of our manufacturing
footprint to best cost locations in Europe. As we continue to operate in a cyclical industry that is impacted by movements in the
global and regional economies, we continually evaluate opportunities to further refine our cost structure. Assuming constant
product mix and pricing, based on our 2024 results, we estimate that our EBITDA breakeven level would be reached if we
experienced a 45% downturn to current product volumes.
We have a strong balance sheet with gross debt of approximately $8.5 billion and substantial available liquidity of
approximately $3.6 billion consisting of cash and cash equivalents and available financing under our Revolving Credit Facility
and committed European accounts receivable factoring facility (as defined below in Liquidity and Capital Resources) as of
December 31, 2024, and no significant U.S. defined benefit or workforce postretirement health care benefits and employer-paid
postretirement basic life insurance benefits liabilities. We intend to maintain strong financial discipline by targeting industry-
leading earnings growth, cash flow generation and return on invested capital and to maintain sufficient liquidity to sustain our
financial flexibility throughout the industry cycle.
OEM product recalls. The number of vehicles recalled globally by OEMs has increased above historical levels. These
recalls can either be initiated by the OEMs or influenced by regulatory agencies. Although there are differing rules and
regulations across countries governing recalls for safety issues, the overall transition towards global vehicle platforms may also
contribute to increased recalls outside of the U.S., as automotive components are increasingly standardized across regions.
Given the sensitivity to safety issues in the automotive industry, including increased focus from regulators and consumers, we
anticipate the number of automotive recalls may remain above historical levels in the near future. Although we engage in
extensive product quality programs and processes, it is possible that we may be adversely affected in the future if the pace of
these recalls continues.
Efficient use of capital. The global vehicle components industry is generally capital intensive and a portion of a supplier’s
capital equipment is frequently utilized for specific customer programs. Lead times for procurement of capital equipment are
long and typically exceed start of production by one to two years. Substantial advantages exist for suppliers that can leverage
their prior investments in capital equipment or amortize the investment over higher volume global customer programs.
Industry consolidation and disruptive new entrants. Consolidation among worldwide OEMs and suppliers is expected to
continue as these companies seek to achieve operating synergies and value stream efficiencies, acquire complementary
technologies and build stronger customer relationships. Additionally, the rise of advanced software and technologies in vehicles
has attracted new and disruptive entrants from outside the traditional automotive supply industry. These entrants may seek to
gain access to certain vehicle technology and component markets. Any of these new competitors may develop and introduce
technologies that gain greater customer or consumer acceptance, which could adversely affect the future growth of the
Company. We believe companies with strong balance sheets and financial discipline are in the best position to take advantage
of these trends.
Consolidated Results of Operations
Our total net sales during the year ended December 31, 2024 were $19.7 billion, a decrease of approximately 2%
compared to 2023. Our overall volumes decreased 2%, which was driven in part by decreased global automotive production of
1% (3% on an AWM basis) for the year ended December 31, 2024, compared to 2023 production rates. Despite declines in
volume and the global inflationary environment, our overall lean cost structure has enabled us to achieve strong levels of
operating income, while continuing to strategically invest in the future.
Aptiv typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and
the net of new and lost business (which we refer to collectively as volume), increased prices attributable to escalation clauses in
our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in
foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we
refer to as contractual price reductions) and engineering changes. Changes in sales mix can have either favorable or unfavorable
impacts on revenue. Such changes can be the result of shifts in regional growth, shifts in OEM sales demand, as well as shifts in
41
consumer demand related to vehicle segment purchases and content penetration. For instance, a shift in sales demand favoring a
particular OEM’s vehicle model for which we do not have a supply contract may negatively impact our revenue. A shift in
regional sales demand toward certain markets could favorably impact the sales of those of our customers that have a large
market share in those regions, which in turn would be expected to have a favorable impact on our revenue.
We typically experience (as described below) fluctuations in operating income due to:
•
Volume, net of contractual price reductions—changes in volume offset by contractual price reductions (which
typically range from 1% to 3% of net sales) and changes in mix;
•
Operational performance—changes to costs for materials and commodities or manufacturing and engineering
variances; and
•
Other—including restructuring costs and any remaining variances not included in Volume, net of contractual price
reductions or Operational performance.
The automotive technology and component supply industry is traditionally subject to inflationary pressures with respect
to raw materials and labor which may place operational and profitability burdens on the entire supply chain. For instance, the
industry has recently been subjected to increased pricing pressures, specifically in relation to copper and petroleum-based resin
products, which have experienced significant volatility in price. We have also been impacted globally by increased overall
inflation as a result of a variety of global trends. Due to various factors, the industry has recently been impacted by increased
operating and logistics challenges from certain global supply chain disruptions, including a worldwide semiconductor supply
shortage. This shortage has resulted in increased pricing pressures on semiconductors as well. Although the severity of these
disruptions abated during the second half of 2023, we expect semiconductor supply cost and commodity cost volatility to have a
continual impact on future earnings and/or operating cash flows. As such, we continually seek to mitigate both inflationary
pressures and our material-related cost exposures using a number of approaches, including combining purchase requirements
with customers and/or other suppliers, using alternate suppliers or product designs, negotiating cost reductions and/or
commodity cost contract escalation clauses into our vehicle manufacturer supply contracts and hedging. We have also
negotiated, and will continue to negotiate, price increases with our customers in response to the aforementioned increased
overall inflation and global supply chain disruptions.
This section discusses our consolidated results of operations and results of operations by segment for the years ended
December 31, 2024 versus 2023. A detailed discussion of our consolidated results of operations and results of operations by
segment for the years ended December 31, 2023 versus 2022 can be found under 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, 2023, which was filed with the SEC on February 6, 2024.
42
2024 versus 2023
The results of operations for the years ended December 31, 2024 and 2023 were as follows:
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(dollars in millions)
Net sales .............................................................................................................. $
19,713
$
20,051
$
(338)
Cost of sales ........................................................................................................
16,002
16,612
610
Gross margin .......................................................................................................
3,711 18.8%
3,439 17.2%
272
Selling, general and administrative ................................................................
1,465
1,436
(29)
Amortization ...................................................................................................
211
233
22
Restructuring ..................................................................................................
193
211
18
Operating income ................................................................................................
1,842
1,559
283
Interest expense ..............................................................................................
(337)
(285)
(52)
Other income, net ...........................................................................................
41
63
(22)
Net gain on equity method transactions .........................................................
605
—
605
Income before income taxes and equity loss .......................................................
2,151
1,337
814
Income tax (expense) benefit .........................................................................
(223)
1,928
(2,151)
Income before equity loss ...................................................................................
1,928
3,265
(1,337)
Equity loss, net of tax .....................................................................................
(118)
(299)
181
Net income ..........................................................................................................
1,810
2,966
(1,156)
Net income attributable to noncontrolling interest ..............................................
24
28
(4)
Net loss attributable to redeemable noncontrolling interest ................................
(1)
—
(1)
Net income attributable to Aptiv .........................................................................
1,787
2,938
(1,151)
Mandatory convertible preferred share dividends ...............................................
—
(29)
29
Net income attributable to ordinary shareholders ............................................... $
1,787
$
2,909
$
(1,122)
Total Net Sales
Below is a summary of our total net sales for the years ended December 31, 2024 versus 2023.
Year Ended December 31,
Variance Due To:
2024
2023
Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions
FX
Commodity
pass-
through
Other
Total
(in millions)
(in millions)
Total net sales .................. $ 19,713 $ 20,051 $
(338)
$
(331) $
(85) $
78 $
— $ (338)
Total net sales for the year ended December 31, 2024 decreased 2% compared to the year ended December 31, 2023. Our
volumes decreased 2% for the period, which reflects decreased global automotive production of 1% (3% on an AWM basis),
primarily in Europe and North America. The declines in volumes were partially offset by the impacts of favorable pricing, net
of contractual price reductions, of $167 million. In addition, our net sales reflect net unfavorable foreign currency impacts,
primarily related to the Chinese Yuan Renminbi.
Cost of Sales
Cost of sales is primarily comprised of material, labor, manufacturing overhead, freight, fluctuations in foreign currency
exchange rates, product engineering, design and development expenses, depreciation, warranty costs and other operating
expenses. Gross margin is revenue less cost of sales and gross margin percentage is gross margin as a percentage of net sales.
Cost of sales decreased $610 million for the year ended December 31, 2024 compared to the year ended December 31,
2023, as summarized below. The Company’s material cost of sales was approximately 50% and 55% of net sales for the years
ended December 31, 2024 and 2023, respectively.
43
Year Ended December 31,
Variance Due To:
2024
2023
Favorable/
(unfavorable)
Volume (a)
FX
Operational
performance
Other
Total
(dollars in millions)
(in millions)
Cost of sales .................... $ 16,002
$ 16,612
$
610
$
371 $
101 $
356 $
(218) $
610
Gross margin ................... $ 3,711
$ 3,439
$
272
$
40 $
16 $
356 $
(140) $
272
Percentage of net sales ....
18.8 %
17.2 %
(a)
Presented net of contractual price reductions for gross margin variance.
The decrease in cost of sales reflects the impacts of improved operational performance, decreased volumes and currency
exchange. Cost of sales was also impacted by the following items in Other above:
•
Approximately $60 million of increased depreciation, primarily as a result of a higher fixed asset base;
•
$78 million of increased commodity pass-through costs; and
•
Approximately $40 million of increased costs due to customer volume-related inefficiencies and warranty matters.
Selling, General and Administrative Expense
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(dollars in millions)
Selling, general and administrative expense ............................................................... $
1,465
$
1,436
$
(29)
Percentage of net sales ................................................................................................
7.4 %
7.2 %
Selling, general and administrative expense (“SG&A”) remained consistent as a percentage of net sales for the year ended
December 31, 2024 as compared to 2023, and primarily includes administrative expenses, information technology costs,
incentive compensation related costs, acquisition and project portfolio costs and selling and marketing expenses.
Amortization
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Amortization ................................................................................................................ $
211 $
233 $
22
Amortization expense reflects the non-cash charge related to definite-lived intangible assets. Amortization during the
years ended December 31, 2024 and 2023 reflects the continued amortization of our definite-lived intangible assets, which
resulted primarily from our acquisitions, over their estimated useful lives. Refer to Note 20. Acquisitions and Divestitures to the
audited consolidated financial statements included herein for further detail of our business acquisitions, including details of the
intangible assets recorded in each transaction.
In 2025, we expect to incur non-cash amortization charges of approximately $210 million.
Restructuring
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(dollars in millions)
Restructuring ............................................................................................................... $
193
$
211
$
18
Percentage of net sales ................................................................................................
1.0 %
1.1 %
The Company recorded employee-related and other restructuring charges totaling approximately $193 million during the
year ended December 31, 2024, which reflects programs to align manufacturing capacity with the current levels of automotive
44
production in each region. The charges recorded during the year ended December 31, 2024 also included the recognition of
approximately $25 million and $57 million for programs initiated in the fourth quarter of 2024 and 2023, respectively, focused
on global salaried workforce optimization, primarily in the North American and European regions. We expect to recognize
additional charges of approximately $35 million in 2025 related to the restructuring program initiated in the fourth quarter of
2024, with cash payments expected to be principally completed in 2025. We expect to make cash payments of approximately
$100 million in 2025 pursuant to currently implemented restructuring programs.
The Company recorded employee-related and other restructuring charges totaling approximately $211 million during the
year ended December 31, 2023, of which $68 million was recognized for a program initiated in the fourth quarter of 2023
focused on global salaried workforce optimization, primarily in the North American and European regions. The charges
recorded during the year ended December 31, 2023 also included the recognition of approximately $27 million of employee-
related and other costs related to the initiation of the closure of a Western European manufacturing site within the Advanced
Safety and User Experience segment pursuant to the Company’s ongoing European footprint rotation strategy.
We expect to continue to incur additional restructuring expense in 2025 and beyond, primarily related to programs
focused on reducing global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in
Europe and aligning manufacturing capacity with the levels of automotive production, which includes approximately $55
million (of which approximately $40 million relates to the Signal and Power Solutions segment and approximately $15 million
relates to the Advanced Safety and User Experience segment) for programs approved as of December 31, 2024, inclusive of
$35 million related to the global salaried headcount reduction program described above, and are expected to be incurred within
the next twelve months. Additionally, as we continue to operate in a cyclical industry that is impacted by movements in the
global and regional economies, we continually evaluate opportunities to further adjust our cost structure and optimize our
manufacturing footprint. The Company plans to implement additional restructuring activities in the future, if necessary, in order
to align manufacturing capacity and other costs with prevailing regional automotive production levels and locations, to improve
the efficiency and utilization of other locations and in order to increase investment in advanced technologies and engineering.
Such future restructuring actions are dependent on market conditions, customer actions and other factors.
Refer to Note 10. Restructuring to the audited consolidated financial statements included herein for additional
information.
Interest Expense
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Interest expense ........................................................................................................... $
337 $
285 $
(52)
The increase in interest expense during the year ended December 31, 2024 compared to 2023 primarily reflects the
issuance of €750 million in aggregate principal amount of 4.25% Euro-denominated senior unsecured notes due 2036 in June
2024, the proceeds of which were ultimately used to redeem the €700 million in aggregate principal amount of 1.50% Euro-
denominated senior unsecured notes due 2025, the $2.5 billion senior unsecured bridge facility borrowings under a Bridge
Credit Agreement (the “Bridge Credit Agreement”) entered into in August 2024, the $600 million term loan (the “Term Loan
A”) issued under the senior unsecured Term Loan A Credit Agreement entered into in August 2024, the issuance of $1,650
million in aggregate principal amount of senior unsecured notes (the “2024 Senior Notes) in September 2024 and the issuance
of $500 million in aggregate principal amount of junior subordinated notes (the “2024 Junior Notes”) in September 2024,
partially offset by the redemption of the $700 million in aggregate principal amount of 2.396% senior unsecured notes due 2025
(the “2.396% Senior Notes”) in September 2024.
The Bridge Credit Agreement, which was utilized to initially fund a portion of the accelerated share repurchase program,
was fully repaid and terminated during the third quarter of 2024 using proceeds from the issuance of the new Term Loan A, the
2024 Senior Notes and the 2024 Junior Notes. Refer to Note 11. Debt and Note 15. Shareholders’ Equity and Net Income Per
Share to the audited consolidated financial statements included herein for additional information.
45
Other Income, Net
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Other income, net ........................................................................................................ $
41 $
63 $
(22)
Other income, net for the year ended December 31, 2024 includes interest income of $87 million. During the year ended
December 31, 2024, the Company also recorded a loss on extinguishment of debt of $15 million in conjunction with the
repayment and termination of the Bridge Credit Agreement, the redemption of the 2.396% Senior Notes and the partial
repayment on the Term Loan A, as further discussed in Note 11. Debt to the audited consolidated financial statements included
herein. The Company also recorded $26 million during the year ended December 31, 2024 related to the components of net
periodic pension and postretirement benefit cost other than service costs, as further described in Note 12. Pension Benefits to
the audited consolidated financial statements included herein.
Other income, net for the year ended December 31, 2023 includes interest income of $111 million, partially offset by an
impairment loss of $18 million recognized for Aptiv’s equity investments without readily determinable fair values. The
Company also recorded $28 million during the year ended December 31, 2023 related to the components of net periodic
pension and postretirement benefit cost other than service costs, as further described in Note 12. Pension Benefits to the audited
consolidated financial statements included herein.
Refer to Note 19. Other Income, Net to the audited consolidated financial statements included herein for additional
information.
Net Gain on Equity Method Transactions
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Net gain on equity method transactions ...................................................................... $
605 $
— $
605
Net gain on equity method transactions includes a gain of approximately $641 million recorded as a result of the
Motional funding and ownership restructuring transactions completed in May 2024, partially offset by a non-cash, pre-tax
impairment charge of approximately $36 million related to its equity method investment in TTTech Auto AG. Refer to Note 5.
Investments in Affiliates to the audited consolidated financial statements included herein for additional information.
Income Taxes
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Income tax expense (benefit) ....................................................................................... $
223 $
(1,928) $
(2,151)
The Company’s tax rate is affected by the fact that its parent entity is a Swiss resident taxpayer, and was an Irish resident
taxpayer prior to the December 2024 reorganization transaction, the tax rates in Switzerland, Ireland and other jurisdictions in
which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of losses or income
for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate is also
impacted by the receipt of certain tax incentives and holidays that reduce the effective tax rate for certain subsidiaries below the
statutory rate.
The Company’s effective tax rate was 10% and (144)% for the years ended December 31, 2024 and 2023, respectively.
The effective tax rate for the year ended December 31, 2024 includes discrete tax benefits primarily associated with
intercompany reorganizations. Also included as a discrete item in the effective tax rate for the year ended December 31, 2024 is
the beneficial impact of approximately 4 points resulting from the Motional funding and ownership restructuring transactions,
as described further in Note 5. Investments in Affiliates to the audited consolidated financial statements included herein. There
46
was no tax expense associated with these gains as Aptiv’s interest in Motional is exempt from capital gains tax in the
jurisdiction in which it is owned.
The effective tax rate for the year ended December 31, 2023 was primarily impacted by the Company’s transfers of
intellectual property, as described below.
On December 15, 2022, the European Union (the “E.U.”) Member States formally adopted the Framework, which
generally provides for a minimum effective tax rate of 15%, as established by the OECD. Many countries have enacted
legislation consistent with the Framework effective at the beginning of 2024. The OECD continues to release additional
guidance on these rules. The Company has proactively responded to these tax policy changes, as described below, and will
continue to closely monitor developments. Our effective tax rate for the year ended December 31, 2024 includes an unfavorable
impact from the enacted Framework.
In response to the Framework, the Company initiated changes to its corporate entity structure, including intercompany
transfers of certain intellectual property to one of its subsidiaries in Switzerland, during the second half of 2023. Furthermore,
during the third quarter of 2023, the Company’s Swiss subsidiary was granted a ten-year tax incentive, beginning in 2024. The
measurement of certain deferred tax assets and associated income tax benefits resulting from these transactions was impacted
by tax legislation in Switzerland enacted in the fourth quarter of 2023, which increased the statutory income tax rate, resulting
in additional deferred tax benefit impacts, net of valuation allowances. During the year ended December 31, 2023, the total
income tax benefit recorded as a result of the intercompany transfers of intellectual property and tax incentive, all as described
above, combined with other related additional current year tax expense as a result of the transactions, was approximately $2,080
million.
On January 15, 2025, the OECD released Administrative Guidance (the “Guidance) on Article 9.1 of the Global Anti-
Base Erosion Model Rules (the “Model Rules”) which amends the Pillar Two Framework. This Guidance may lead to an
adjustment to the tax incentive granted to the Company’s Swiss subsidiary in 2023 under the terms of the incentive agreement
and a reduction of deferred tax assets of up to approximately $300 million, net of valuation allowance. The Company is
continuing to analyze the impacts of the Guidance and will recognize any resulting provisions in the first quarter of 2025.
Refer to Note 14. Income Taxes to the audited consolidated financial statements included herein for additional
information.
Equity Loss
Year Ended December 31,
2024
2023
Favorable/
(unfavorable)
(in millions)
Equity loss, net of tax .................................................................................................. $
118 $
299 $
181
Equity loss, net of tax reflects the Company’s interest in the results of ongoing operations of entities accounted for as
equity method investments. The decrease in equity losses recognized by Aptiv during the year ended December 31, 2024
compared to 2023 is primarily attributable to the decrease in Aptiv’s common equity interest in Motional from 50% to
approximately 15% as a result of the Motional funding and ownership restructuring transactions that were completed in May
2024. Refer to Note 5. Investments in Affiliates to the audited consolidated financial statements included herein for additional
information.
Results of Operations by Segment
We operate our core business along the following operating segments, which are grouped on the basis of similar product,
market and operating factors:
•
Signal and Power Solutions, which includes complete electrical architecture and component products.
•
Advanced Safety and User Experience, which includes vehicle technology and services in advanced safety, user
experience and smart vehicle compute and software, as well as cloud-native software platforms, autonomous driving
technologies and DevOps tools.
•
Eliminations and Other, which includes i) the elimination of inter-segment transactions, and ii) certain other expenses
and income of a non-operating or strategic nature.
47
Generally, Aptiv evaluates segment performance based on stand-alone segment net income before interest expense, other
income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, amortization, restructuring, other
acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute
product portfolio transformation actions, including business and product acquisitions and divestitures), asset impairments and
other related charges, compensation expense related to acquisitions and gains (losses) on business divestitures and other
transactions (“Adjusted Operating Income”).
Our management utilizes Adjusted Operating Income as the key performance measure of segment income or loss to
evaluate segment performance, and for planning and forecasting purposes to allocate resources to the segments, as management
believes this measure is most reflective of the operational profitability or loss of our operating segments. Segment Adjusted
Operating Income should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be
considered an alternative to net income attributable to Aptiv, which is the most directly comparable financial measure to
Adjusted Operating Income that is prepared in accordance with U.S. GAAP. Segment Adjusted Operating Income, as
determined and measured by Aptiv, should also not be compared to similarly titled measures reported by other companies.
Refer to Note 22. Segment Reporting to the audited consolidated financial statements included herein for additional
information.
Net sales, gross margin as a percentage of net sales and Adjusted Operating Income by segment for the years ended
December 31, 2024 and 2023 are as follows:
Net Sales by Segment
Year Ended December 31,
Variance Due To:
2024
2023
Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions
FX
Commodity
Pass-
through
Other
Total
(in millions)
(in millions)
Signal and Power Solutions ..... $ 13,983 $ 14,404 $
(421)
$
(415) $ (84) $
78 $
— $
(421)
Advanced Safety and User
Experience ...........................
5,791
5,695
96
97
(1)
—
—
96
Eliminations and Other ............
(61)
(48)
(13)
(13)
—
—
—
(13)
Total .................................... $ 19,713 $ 20,051 $
(338)
$
(331) $ (85) $
78 $
— $
(338)
Gross Margin Percentage by Segment
Year Ended December 31,
2024
2023
Signal and Power Solutions ..................................................................................................................
18.7 %
18.0 %
Advanced Safety and User Experience ................................................................................................
19.0 %
15.0 %
Total .................................................................................................................................................
18.8 %
17.2 %
Adjusted Operating Income by Segment
Year Ended December 31,
Variance Due To:
2024
2023
Favorable/
(unfavorable)
Volume, net of
contractual
price
reductions
Operational
performance
Other
Total
(in millions)
(in millions)
Signal and Power Solutions ....... $
1,652 $
1,676 $
(24)
$
4 $
86 $
(114) $
(24)
Advanced Safety and User
Experience ..............................
714
451
263
36
270
(43)
263
As noted in the table above, Adjusted Operating Income for the year ended December 31, 2024 as compared to the year
ended December 31, 2023 was impacted by operational performance, volume, including product mix, as well as the impacts of
48
favorable pricing, net of contractual price reductions, of $167 million. Adjusted Operating Income was also impacted by the
following items included within Other in the table above:
•
Approximately $65 million of increased depreciation, primarily as a result of a higher fixed asset base;
•
$29 million of increased SG&A expense, not including the impact of other acquisition and portfolio project costs;
•
Approximately $40 million of increased costs due to customer volume-related inefficiencies and warranty matters;
partially offset by
•
$17 million of favorable foreign currency impacts.
Liquidity and Capital Resources
Overview of Capital Structure
Our liquidity requirements are primarily to fund our business operations, including capital expenditures and working
capital requirements, as well as to fund debt service requirements and operational restructuring activities. Our primary sources
of liquidity are cash flows from operations, our existing cash balance, and as necessary and available, borrowings under credit
facilities and issuance of long-term debt and equity. To the extent we generate discretionary cash flow we may consider using
this additional cash flow for optional prepayments of existing indebtedness, strategic acquisitions or investments, additional
share repurchases and/or general corporate purposes. We also continually explore ways to enhance our capital structure.
As of December 31, 2024, we had cash and cash equivalents of $1.6 billion and net debt (defined as outstanding debt less
cash and cash equivalents) of $6.8 billion. We also have access to additional liquidity pursuant to the terms of the $2.0 billion
Revolving Credit Facility and the committed European accounts receivable factoring facility, as described below. The following
table summarizes our available liquidity, which includes cash, cash equivalents and funds available under our significant
committed credit facilities, as of December 31, 2024.
December 31,
2024
(in millions)
Cash and cash equivalents ...................................................................................................................................... $
1,573
Revolving Credit Facility, unutilized portion (1) ...................................................................................................
1,998
Committed European accounts receivable factoring facility, unutilized portion (2) ..............................................
18
Total available liquidity ..................................................................................................................................... $
3,589
(1)
Availability reduced by $2 million in letters of credit issued under the Credit Agreement as of December 31, 2024.
(2)
Based on December 31, 2024 foreign currency rates, subject to the availability of eligible accounts receivable.
We expect existing cash, available liquidity and cash flows from operations to continue to be sufficient to fund our global
operating activities, including restructuring payments, capital expenditures and debt obligations. In addition, we expect to
continue to repurchase outstanding ordinary shares pursuant to our authorized ordinary share repurchase program, as further
described below.
We also continue to expect to be able to move funds between different countries to manage our global liquidity needs
without material adverse tax implications, subject to current monetary policies. We utilize a combination of strategies, including
dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds
necessary to meet our global liquidity needs. There are no significant restrictions on the ability of our subsidiaries to pay
dividends or make other distributions to Aptiv. As of December 31, 2024, the Company’s cash and cash equivalents held by our
non-U.S. subsidiaries totaled approximately $1.5 billion. If additional non-U.S. cash was needed for our U.S. operations, we
may be required to accrue and pay withholding if we were to distribute such funds from non-U.S. subsidiaries to the U.S.;
however, based on our current liquidity needs and strategies, we do not anticipate a need to accrue and pay such additional
amounts.
Based on these factors, we believe we possess sufficient liquidity to fund our global operations and capital investments in
2025 and beyond.
Share Repurchase Programs
In July 2024, the Board of Directors authorized a share repurchase program of up to $5.0 billion of ordinary shares, which
commenced in August 2024 following completion of the Company’s $2.0 billion January 2019 share repurchase program. This
share repurchase program provides for share purchases in the open market or in privately negotiated transactions (which may
49
include derivative transactions, including an accelerated share repurchase program (“ASR”)), depending on share price, market
conditions and other factors, as determined by the Company.
As part of the Company’s share repurchase program, on August 1, 2024, the Company entered into ASR agreements with
each of Goldman Sachs International and JPMorgan Chase Bank, N.A. to repurchase an aggregate of $3.0 billion of Aptiv’s
ordinary shares (the “ASR Agreements”).
Under the terms of the ASR Agreements, on August 2, 2024, the Company made an aggregate payment of $3.0 billion
(the “Repurchase Price”) and received initial deliveries of approximately 30.8 million ordinary shares with a value of $2.25
billion, which were retired immediately and recorded as a reduction to shareholders’ equity. Aptiv incurred approximately $4
million of direct costs in connection with the ASR Agreements. Given the Company’s ability to settle in shares, as described
below, the remaining $750 million prepaid forward contract was classified as a reduction to additional paid-in capital as of
December 31, 2024. In January 2025, a portion of the ASR Agreements were settled, and Aptiv received approximately
5.6 million ordinary shares, which were retired immediately.
The Company initially funded the accelerated share repurchase program with cash on hand and borrowings under the
Bridge Credit Agreement. The Bridge Credit Agreement was subsequently repaid and terminated during the third quarter of
2024 using proceeds from the Term Loan A and issuance of the 2024 Senior Notes and 2024 Junior Notes, as further described
in Note 11. Debt to the audited consolidated financial statements included herein.
The total number of shares to be repurchased under each ASR Agreement will be based on the average daily volume-
weighted average price of our ordinary shares on specified dates during the term of such ASR Agreement, less a discount and
subject to adjustments pursuant to the terms and conditions of the ASR Agreements.
Upon final settlement of the ASR Agreements, under certain circumstances, the relevant counterparty may be required to
deliver additional ordinary shares, or we may be required to deliver ordinary shares or to make a cash payment to the relevant
counterparty, at our election. The final settlements under the ASR Agreements are scheduled to occur no later than the second
quarter of 2025, and in each case may be accelerated at the option of the applicable counterparty.
A summary of the ordinary shares repurchased during the years ended December 31, 2024 and 2023 is as follows:
Year Ended December 31,
2024
2023
Total number of shares repurchased ............................................................................................
44,431,332
4,701,558
Average price paid per share ....................................................................................................... $
75.40 $
84.59
Total (in millions) ................................................................................................................... $
3,350 $
398
There were no shares repurchased during the year ended December 31, 2022. As of December 31, 2024, approximately
$2,515 million of share repurchases remained available under the July 2024 share repurchase program. All previously
repurchased shares were retired, and are reflected as a reduction of ordinary share capital for the par value of the shares, with
the excess applied as reductions to additional paid-in-capital and retained earnings.
Dividends from Equity Investments
During the years ended December 31, 2024, 2023 and 2022, Aptiv received dividends of $12 million, $5 million and $5
million, respectively, from its equity method investments. The dividends were recognized as a reduction to the investment and
represented a return on investment included in cash flows from operating activities.
Acquisitions and Other Transactions
Höhle—On April 3, 2023, Aptiv acquired 100% of the equity interests of Höhle Ltd. (“Höhle”), a manufacturer of
microducts, for total consideration of $42 million. The results of operations of Höhle are reported within the Signal and Power
Solutions segment from the date of acquisition. The Company acquired Höhle utilizing cash on hand.
Wind River—On December 23, 2022, Aptiv acquired 100% of the equity interests of Wind River, a global leader in
delivering software for the intelligent edge, for total consideration of approximately $3.5 billion. The results of operations of
Wind River are reported within the Advanced Safety and User Experience segment from the date of acquisition. The Company
acquired Wind River utilizing cash on hand, which included proceeds from the 2022 Senior Notes. Upon completion of the
acquisition, Aptiv incurred transaction related expenses totaling approximately $43 million, which were recorded within other
income (expense), net in the consolidated statements of operations in the fourth quarter of 2022.
Intercable Automotive—On November 30, 2022, Aptiv acquired 85% of the equity interests of Intercable Automotive
Solutions S.r.l. (“Intercable Automotive”), a manufacturer of high-voltage busbars and interconnect solutions, for total
consideration of $609 million. The results of operations of Intercable Automotive are reported within the Signal and Power
50
Solutions segment from the date of acquisition. The Company acquired its interest in Intercable Automotive utilizing cash on
hand. Upon completion of the acquisition, Aptiv incurred transaction related expenses totaling approximately $10 million,
which were recorded within other income (expense), net in the consolidated statements of operations in the fourth quarter of
2022.
Concurrent with the acquisition, the Company entered into an agreement with the noncontrolling interest holders that
provides the Company with the right to purchase, and the noncontrolling interest holders with the right to sell, the remaining
15% of Intercable Automotive for cash of up to €155 million, beginning in 2026. The final purchase price is contractually
defined and will be determined based on Intercable Automotive’s 2025 operating results.
Sale of Interest in Majority Owned Russian Subsidiary—Given the sanctions put in place by the E.U., U.S. and other
governments, which restrict our ability to conduct business in Russia, we initiated a plan in the second quarter of 2022 to exit
our 51% owned subsidiary in Russia. As a result, the Company determined that this subsidiary, which was reported within the
Signal and Power Solutions segment, initially met the held for sale criteria as of June 30, 2022. Consequently, during the year
ended December 31, 2022, the Company recorded a pre-tax charge of $51 million to impair the carrying value of the Russian
subsidiary’s net assets to fair value.
On May 30, 2023, the Company completed the sale of its entire interest in the Russian subsidiary to JSC Samara Cables
Company, the sole minority shareholder in the Russian subsidiary, for a nominal amount in exchange for all of the Company’s
shares in the subsidiary. As a result of this transaction, the net assets held for sale of the Russian subsidiary were deconsolidated
from the Company’s consolidated financial statements and the Company did not record any incremental gain or loss resulting
from this disposition. Furthermore, losses relating to the Russian subsidiary during the held for sale period were de minimis.
The former Russian subsidiary is not considered to be a related party of the Company after deconsolidation.
Refer to Note 20. Acquisitions and Divestitures to the audited consolidated financial statements included herein for
further detail of the Company’s business acquisitions and divestitures.
Motional Joint Venture Funding and Ownership Restructuring Transactions
On April 19, 2024, Aptiv and Hyundai Motor Group (“Hyundai”) entered into an agreement to restructure Aptiv’s
ownership interest in Motional and for Hyundai to provide additional funding to Motional, each as described below. Prior to
these transactions, Motional was 50% owned by each of Aptiv and Hyundai.
As part of the agreement, on May 2, 2024, Hyundai invested $475 million in Motional AD LLC (“Motional”) in
exchange for an additional 11.7% common equity interest. Aptiv did not participate in this funding round. This transaction
resulted in the dilution of Aptiv’s common equity interest in Motional from 50% to approximately 44%, prior to the completion
of any further transactions as described below. As these units were issued at a valuation greater than the carrying value of our
investment in Motional, the Company recognized a gain of approximately $91 million during the year ended December 31,
2024, within net gain on equity method transactions in the consolidated statements of operations.
Also as part of the agreement, on May 16, 2024, Aptiv sold 11% of its common equity interest in Motional to Hyundai
for approximately $448 million of cash consideration. Aptiv also exchanged approximately 21% of its common equity in
Motional for a like number of Motional preferred shares. These transactions resulted in the reduction of Aptiv’s common equity
interest in Motional from approximately 44% to approximately 15%. As a result of these transactions, the Company recognized
a gain of approximately $550 million during the year ended December 31, 2024, within net gain on equity method transactions
in the consolidated statements of operations.
The total gain recorded as a result of the Motional funding and ownership restructuring transactions completed in May
2024, all as described above, was approximately $641 million ($2.50 per diluted share) for the year ended December 31, 2024.
Investment in TTTech Auto—On March 15, 2022, Aptiv acquired approximately 20% of the equity interests of TTTech
Auto AG (“TTTech Auto”), a leading provider of safety-critical middleware solutions for advanced driver-assistance systems
and autonomous driving applications, for €200 million (approximately $220 million, using foreign currency rates on the
investment date). The Company made the investment in TTTech Auto utilizing cash on hand.
The shareholders of TTTech Auto entered into an agreement for the sale of 100% of TTTech Auto to an unrelated third
party. As a result, the Company determined there was an other-than-temporary impairment to its equity method investment in
TTTech Auto in the fourth quarter of 2024 based on the anticipated acquisition value of TTTech Auto. During the year ended
December 31, 2024, the Company’s equity investment in TTTech Auto was written down to its estimated fair value of $147
million, resulting in a non-cash, pre-tax impairment charge of approximately $36 million within net gain on equity method
transactions in the consolidated statements of operations. Upon completion of the sale, Aptiv will no longer hold an equity
interest in TTTech Auto. The sale is anticipated to occur in 2025 and is subject to regulatory approvals and customary closing
conditions.
51
Technology Investments—In September 2024, the Company’s Advanced Safety and User Experience segment made an
investment totaling approximately 399 million Chinese Yuan Renminbi (“RMB”) (approximately $57 million, using foreign
currency rates on the investment date) in preferred equity of MAXIEYE Automotive Technology (Ningbo) Co., Ltd.
(“Maxieye”), a provider of advanced driver-assistance systems and autonomous driving applications. Due to the Company’s
redemption rights, the Company’s investment in Maxieye is classified as an available-for-sale debt security within other long-
term assets in the consolidated balance sheets, with changes in fair value recorded in other comprehensive income. The
Company also agreed to invest an additional 171 million RMB (approximately $24 million, using December 31, 2024 foreign
currency rates) in preferred equity of Maxieye, contingent on the achievement of certain technical milestones, which have not
yet been met as of December 31, 2024, and the satisfaction of customary closing conditions.
In July 2024, the Company’s Advanced Safety and User Experience segment made an investment of approximately 33
billion Korean Won (“KRW”) (approximately $24 million, using foreign currency rates on the investment date) in convertible
redeemable preferred shares of StradVision, Inc. (“StradVision”), a provider of deep learning-based camera perception software
for automotive applications. The Company previously made KRW-denominated investments in StradVision totaling
approximately $40 million in the first quarter of 2024 and approximately $44 million in prior years (using foreign currency
rates on the date of the respective investments). Due to the Company’s redemption rights, the Company’s investment in
StradVision is classified as an available-for-sale debt security within other long-term assets in the consolidated balance sheets,
with changes in fair value recorded in other comprehensive income.
Refer to Note 5. Investments in Affiliates to the audited consolidated financial statements included herein for further
detail of the Company’s investments.
Credit Agreement
Aptiv PLC and its wholly-owned subsidiary Aptiv Corporation entered into a credit agreement (the “Credit Agreement”)
with, among others, JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), under which it
maintains a senior unsecured credit facility currently consisting of a revolving credit facility of $2 billion (the “Revolving
Credit Facility”). The Revolving Credit Facility matures on June 24, 2026. Aptiv Global Financing Designated Activity
Company (“AGF DAC,” formerly known as Aptiv Global Financing Limited), a wholly-owned subsidiary of Aptiv PLC,
previously executed a joinder agreement to the Credit Agreement, which allows it to act as a borrower under the Credit
Agreement, and a guaranty supplement, under which AGF DAC guarantees the obligations under the Credit Agreement, subject
to certain exceptions. As a result of the reorganization transaction, Aptiv Swiss Holdings replaced Old Aptiv as an obligor
under the Credit Agreement.
The Credit Agreement was entered into in March 2011 and has been subsequently amended and restated on several
occasions, most recently on June 24, 2021, and was further amended on April 19, 2023. The June 2021 amendment, among
other things, (1) refinanced and replaced the term loan A and revolver with a new term loan A with an original maturity in
2026, and a new five-year revolving credit facility with aggregate commitments of $2 billion, (2) utilized the Company’s
existing sustainability-linked metrics and commitments, that, if achieved, would change the facility fee and interest rate margins
as described below, and (3) established the leverage ratio maintenance covenant that requires the Company to maintain total net
leverage (as calculated in accordance with the Credit Agreement) of less than 3.5 to 1.0 (or 4.0 to 1.0 for four full fiscal quarters
following completion of material acquisitions, as defined in the Credit Agreement) and allowed for dividends and other
payments on equity. Effective from the date of the April 2023 amendment, all interest rate benchmarks within the Credit
Agreement that were previously based on the London Interbank Offered Rate were transitioned to a rate based on the Secured
Overnight Financing Rate (“SOFR”). The Credit Agreement also contains an accordion feature that permits Aptiv to increase,
from time to time, the aggregate borrowing capacity under the Credit Agreement by up to an additional $1 billion upon Aptiv’s
request, the agreement of the lenders participating in the increase, and the approval of the Administrative Agent. Borrowings
under the Credit Agreement are prepayable at Aptiv’s option without premium or penalty.
As of December 31, 2024, Aptiv had no amounts outstanding under the Revolving Credit Facility and approximately $2
million in letters of credit were issued under the Credit Agreement. Letters of credit issued under the Credit Agreement reduce
availability under the Revolving Credit Facility. No amounts were drawn on the Revolving Credit Facility during the year
ended December 31, 2024.
Loans under the Credit Agreement bear interest, at Aptiv’s option, at either (a) the Administrative Agent’s Alternate Base
Rate (“ABR” as defined in the Credit Agreement) or (b) SOFR plus in either case a percentage per annum as set forth in the
table below (the “Applicable Rate”). The rates under the Credit Agreement on the specified dates are set forth below:
December 31, 2024
December 31, 2023
SOFR plus
ABR plus
SOFR plus
ABR plus
Revolving Credit Facility .....................................................
1.06 %
0.06 %
1.06 %
0.06 %
52
The Applicable Rate under the Credit Agreement, as well as the facility fee, may increase or decrease from time to time
based on changes in the Company’s credit ratings and whether the Company achieves or fails to achieve certain sustainability-
linked targets with respect to greenhouse gas emissions and workplace safety. Such adjustments may be up to 0.04% per annum
on interest rate margins on the Revolving Credit Facility, 0.02% per annum on interest rate margins on the Tranche A Term
Loan (prior to its repayment, as described above) and 0.01% per annum on the facility fee. Accordingly, the interest rate is
subject to fluctuation during the term of the Credit Agreement based on changes in the ABR, SOFR, changes in the Company’s
corporate credit ratings or whether the Company achieves or fails to achieve its sustainability-linked targets. The Credit
Agreement also requires that Aptiv pay certain facility fees on the Revolving Credit Facility, which are also subject to
adjustment based on the sustainability-linked targets as described above, and certain letter of credit issuance and fronting fees.
The Company achieved the sustainability-linked targets for the 2023 calendar year, and the interest rate margins and facility
fees were reduced from the Applicable Rates, by the amounts specified above, effective in the third quarter of 2024.
The Credit Agreement contains certain covenants that limit, among other things, the Company’s (and the Company’s
subsidiaries’) ability to incur certain additional indebtedness or liens or to dispose of substantially all of its assets. In addition,
the Credit Agreement requires that the Company maintain a consolidated leverage ratio (the ratio of Consolidated Total
Indebtedness to Consolidated EBITDA, each as defined in the Credit Agreement) of not more than 3.5 to 1.0 (or 4.0 to 1.0 for
four full fiscal quarters following completion of material acquisitions, as defined in the Credit Agreement).
The Credit Agreement also contains events of default customary for financings of this type. The Company was in
compliance with the Credit Agreement covenants as of December 31, 2024.
As of December 31, 2024, all obligations under the Credit Agreement were borrowed by Aptiv Corporation and jointly
and severally guaranteed by AGF DAC, Aptiv PLC and Aptiv Swiss Holdings, subject to certain exceptions set forth in the
Credit Agreement.
Previously, the Company also maintained a senior unsecured credit facility in the form of a term loan (the “Tranche A
Term Loan”). On October 27, 2023, the Company fully repaid the outstanding principal balance of $301 million on the Tranche
A Term Loan, utilizing cash on hand. As a result, Aptiv recognized a loss on debt extinguishment of approximately $1 million
during the year ended December 31, 2023 within other income (expense), net in the consolidated statements of operations.
Term Loan A Credit Agreement
On August 19, 2024, Aptiv PLC and its wholly-owned subsidiaries AGF DAC and Aptiv Corporation entered into a new
senior unsecured term loan A credit agreement (the “Term Loan A Credit Agreement”) with, among others, JPMorgan Chase
Bank, N.A., as Administrative Agent, under which it maintains a senior unsecured credit facility consisting of a term loan (the
“Term Loan A”) in aggregate principal amount of $600 million. Aptiv incurred approximately $2 million of issuance costs in
connection with the Term Loan A.
Proceeds from the Term Loan A were used to repay a portion of the loans incurred under the Bridge Credit Agreement
during the three months ended September 30, 2024. This transaction was accounted for as a modification of debt in accordance
with ASC Topic 470-50, Debt Modifications and Extinguishments. Accordingly, a pro-rata portion of the unamortized fees
from the Bridge Credit Agreement in the amount of $4 million was transferred to the Term Loan A and, together with the $2
million of direct issuance costs referenced above, will be amortized to interest expense over the term of the Term Loan A.
On December 20, 2024, the Company repaid $350 million of the outstanding principal balance on the Term Loan A,
utilizing cash on hand. As a result, Aptiv recognized a loss on debt extinguishment of approximately $3 million during the year
ended December 31, 2024 within other income (expense), net in the consolidated statements of operations.
The Term Loan A matures on August 19, 2027. Borrowings under the Term Loan A Credit Agreement are prepayable at
Aptiv’s option without premium or penalty. No principal payment is required until the outstanding principal amount is due in
full on the maturity date. In the first quarter of 2025, the Company fully repaid the remaining outstanding principal balance of
$250 million on the Term Loan A, utilizing cash on hand.
Loans under the Term Loan A Credit Agreement bear interest, at Aptiv’s option, at either (a) ABR or (b) SOFR plus in
either case a percentage per annum as set forth in the table below (the “Term Loan Applicable Rate”). The rates under the Term
Loan A Credit Agreement on the specified dates are set forth below:
December 31, 2024
December 31, 2023
SOFR plus
ABR plus
SOFR plus
ABR plus
Term Loan A .........................................................................
1.25 %
0.25 %
N/A
N/A
The Term Loan Applicable Rate under the Term Loan A Credit Agreement may increase or decrease from time to time
based on changes in the Company’s credit ratings. The interest rate is subject to fluctuation during the term of the Term Loan A
Credit Agreement based on changes in the ABR, SOFR or changes in the Company’s corporate credit ratings.
53
The interest rate period with respect to SOFR interest rate options can be set at one-, three-, or six-months as selected by
Aptiv in accordance with the terms of the Term Loan A Credit Agreement (or other period as may be agreed by the applicable
lenders). Aptiv may elect to change the selected interest rate option in accordance with the provisions of the Term Loan A
Credit Agreement. As of December 31, 2024, Aptiv selected the one-month SOFR interest rate option on the Term Loan A, and
the rate effective as of December 31, 2024, as detailed in the table below, was based on the Company’s current credit rating and
the Term Loan Applicable Rate for the Term Loan A Credit Agreement:
Borrowings as of
Term Loan
December 31, 2024
Rates effective as of
Applicable Rate
(in millions)
December 31, 2024
Term Loan A ...........................................................................
SOFR plus 1.25%
$
250
5.72 %
The Term Loan A Credit Agreement contains certain covenants that limit, among other things, the Company’s (and the
Company’s subsidiaries’) ability to incur certain additional indebtedness or liens or to dispose of substantially all of its assets.
In addition, the Term Loan A Credit Agreement requires that the Company maintain a consolidated leverage ratio (the ratio of
Consolidated Total Indebtedness to Consolidated EBITDA, each as defined in the Term Loan A Credit Agreement) of not more
than 3.5 to 1.0 (or 4.0 to 1.0 for four full fiscal quarters following completion of material acquisitions, as defined in the Term
Loan A Credit Agreement).
The Term Loan A Credit Agreement also contains events of default customary for financings of this type. The Company
was in compliance with the Term Loan A Credit Agreement covenants as of December 31, 2024.
As of December 31, 2024, all obligations under the Term Loan A Credit Agreement were borrowed by AGF DAC and
jointly and severally guaranteed by Aptiv PLC, Aptiv Corporation and Aptiv Swiss Holdings.
Senior and Junior Unsecured Notes
As of December 31, 2024, the Company had the following senior and junior unsecured notes issued and outstanding:
Aggregate Principal
Amount
(in millions)
Stated Coupon
Rate
Issuance Date
Maturity Date
Interest Payment Date
$
520
1.60%
September 2016
September 2028
September 15
$
300
4.35%
March 2019
March 2029
March 15 and September 15
$
550
4.65%
September 2024
September 2029
March 13 and September 13
$
800
3.25%
February 2022
March 2032
March 1 and September 1
$
550
5.15%
September 2024
September 2034
March 13 and September 13
$
781
4.25%
June 2024
June 2036
June 11
$
300
4.40%
September 2016
October 2046
April 1 and October 1
$
350
5.40%
March 2019
March 2049
March 15 and September 15
$
1,500
3.10%
November 2021
December 2051
June 1 and December 1
$
1,000
4.15%
February 2022
May 2052
May 1 and November 1
$
550
5.75%
September 2024
September 2054
March 13 and September 13
$
500
6.875% (1)
September 2024
December 2054
June 15 and December 15
(1)
Represents fixed-to-fixed reset rate junior subordinated unsecured notes.
Although the specific terms of each indenture governing each series of senior and junior notes vary, the senior indentures
contain certain restrictive covenants, including with respect to Aptiv’s (and Aptiv’s subsidiaries’) ability to incur liens, enter
into sale and leaseback transactions and merge with or into other entities. As of December 31, 2024, the Company was in
compliance with the provisions of all series of the outstanding senior and junior notes. Refer to Note 11. Debt to the audited
consolidated financial statements included herein for additional information.
54
Guarantor Summarized Financial Information
As further described in Note 11. Debt to the audited consolidated financial statements included herein, Aptiv PLC, Aptiv
Corporation, AGF DAC and Aptiv Swiss Holdings are each potential borrowers under the Credit Agreement and the Term
Loan A Credit Agreement, under which such borrowings would be guaranteed by each of the other entities. Old Aptiv issued
the 2016 Euro-denominated Senior Notes, 2016 Senior Notes, 2019 Senior Notes and 2021 Senior Notes. In February 2022,
Aptiv Corporation and AGF DAC were added as guarantors on each series of outstanding senior notes previously issued by Old
Aptiv. AGF DAC was added as a joint and several co-issuer of the 2021 Senior Notes in December 2021, effective as of the
date of issuance. Old Aptiv and Aptiv Corporation jointly issued the 2022 Senior Notes, which are guaranteed by AGF DAC. In
2024, Old Aptiv and AGF DAC jointly issued the 2024 Euro-denominated Senior Notes, the 2024 Senior Notes, and the 2024
Junior Notes, which are all guaranteed by Aptiv Corporation. In December 2024, with respect to each series of outstanding
senior and junior notes previously issued by Old Aptiv, Aptiv Swiss Holdings succeeded to Old Aptiv as obligor, and Aptiv
PLC was added as a guarantor. Together, Aptiv PLC, Aptiv Corporation, AGF DAC and Aptiv Swiss Holdings comprise the
“Obligor Group.” All other consolidated direct and indirect subsidiaries of Aptiv PLC are not subject to any guarantee under
any series of notes outstanding (the “Non-Guarantors”). The guarantees rank equally in right of payment with all of the
guarantors’ existing and future senior indebtedness, are effectively subordinated to any of their existing and future secured
indebtedness to the extent of the value of the collateral securing such indebtedness and are structurally subordinated to the
indebtedness of each of their existing and future subsidiaries that is not a guarantor.
The below summarized financial information is presented on a combined basis after the elimination of intercompany
balances and transactions among the Obligor Group and equity in earnings from and investments in the Non-Guarantors. The
below summarized financial information should be read in conjunction with the Company’s audited consolidated financial
statements included herein, as the financial information may not necessarily be indicative of results of operations or financial
position had the subsidiaries operated as independent entities.
Obligor Group
Year Ended December 31, 2024
(in millions)
Net sales ................................................................................................................................................................ $
—
Gross margin ......................................................................................................................................................... $
—
Operating loss ....................................................................................................................................................... $
(10)
Net loss .................................................................................................................................................................. $
(197)
Net loss attributable to Aptiv ................................................................................................................................ $
(197)
As of December 31, 2024
Current assets (1) ................................................................................................................................................... $
6,969
Long-term assets (1) .............................................................................................................................................. $
692
Current liabilities (2) ............................................................................................................................................. $
5,683
Long-term liabilities (2) ........................................................................................................................................ $
8,126
Noncontrolling interest .......................................................................................................................................... $
—
As of December 31, 2023
Current assets (1) ................................................................................................................................................... $
4,699
Long-term assets (1) .............................................................................................................................................. $
562
Current liabilities (2) ............................................................................................................................................. $
6,090
Long-term liabilities (2) ........................................................................................................................................ $
6,419
Noncontrolling interest .......................................................................................................................................... $
—
(1)
Includes current assets of $6,212 million and $3,826 million, and long-term assets of $687 million and $555 million, due from Non-Guarantors as of
December 31, 2024 and December 31, 2023, respectively.
(2)
Includes current liabilities of $5,481 million and $6,013 million, and long-term liabilities of $226 million and $226 million, due to Non-Guarantors as of
December 31, 2024 and December 31, 2023, respectively.
55
Other Financing
Receivable factoring—Aptiv maintains a €450 million European accounts receivable factoring facility that is available on
a committed basis and allows for factoring of receivables denominated in both Euros and U.S. dollars (“USD”). This facility is
accounted for as short-term debt and borrowings are subject to the availability of eligible accounts receivable. Collateral is not
required related to these trade accounts receivable. This facility became effective on January 1, 2021 and had an initial term of
three years, and was renewed for an additional three year term, effective November 2023, subject to Aptiv’s right to terminate
at any time with three months’ notice. After expiration of the new three-year term, either party can terminate with three months’
notice. Borrowings denominated in Euros under the facility bear interest at the three-month Euro Interbank Offered Rate
(“EURIBOR”) plus 0.50% and USD borrowings bear interest at two-month SOFR plus 0.50%, with borrowings under either
denomination carrying a minimum interest rate of 0.20%. As of December 31, 2024, Aptiv had $450 million outstanding under
the European accounts receivable factoring facility. As of December 31, 2023, Aptiv had no amounts outstanding under the
European accounts receivable factoring facility. The maximum amount drawn under the European accounts receivable factoring
facility during the year ended December 31, 2024 was $450 million, primarily to manage intra-month working capital
requirements.
Finance leases and other—As of December 31, 2024 and 2023, approximately $64 million and $21 million, respectively,
of other debt primarily issued by certain non-U.S. subsidiaries and finance lease obligations were outstanding.
Letter of credit facilities—In addition to the letters of credit issued under the Credit Agreement, Aptiv had approximately
$4 million outstanding through other letter of credit facilities as of December 31, 2024 and 2023, primarily to support
arrangements and other obligations at certain of its subsidiaries.
Contractual Commitments
The following table summarizes our expected cash outflows resulting from financial contracts and commitments as of
December 31, 2024, with amounts denominated in foreign currencies translated using foreign currency rates as of December 31,
2024. We have not included information on our recurring purchases of materials for use in our manufacturing operations. These
amounts are generally consistent from year to year, closely reflect our levels of production, and are not long-term in nature. The
amounts below exclude the gross liability for uncertain tax positions of $227 million as of December 31, 2024. We do not
expect a significant payment related to these obligations to be made within the next twelve months. We are not able to provide a
reasonably reliable estimate of the timing of future payments relating to the non-current portion of obligations associated with
uncertain tax positions. For more information, refer to Note 14. Income Taxes to the audited consolidated financial statements
included herein.
Payments due by Period
Total
2025
2026 & 2027
2028 & 2029
Thereafter
(in millions)
Debt and finance lease obligations (excluding interest) ......... $
8,465 $
509 $
254 $
1,371 $
6,331
Estimated interest costs related to debt and finance lease
obligations ..........................................................................
6,173
338
643
612
4,580
Operating lease obligations ....................................................
605
144
227
118
116
Contractual commitments for capital expenditures ................
194
192
2
—
—
Other contractual purchase commitments, including
information technology .......................................................
329
178
120
31
—
Total ................................................................................... $
15,766 $
1,361 $
1,246 $
2,132 $
11,027
In addition to the obligations discussed above, certain of our non-U.S. subsidiaries sponsor defined benefit pension plans,
some of which are funded. We have minimum funding requirements with respect to certain of our pension obligations and may
periodically elect to make discretionary contributions to the plans in support of risk management initiatives. We will also have
payments due with respect to our other postretirement benefit obligations. We do not fund our other postretirement benefit
obligations and payments are made as costs are incurred by covered retirees. Refer to Note 12. Pension Benefits to the audited
consolidated financial statements included herein for additional detail regarding our expected contributions to our pension plans
and expected distributions to participants in future periods.
Capital Expenditures
Supplier selection in the automotive industry is generally finalized several years prior to the start of production of the
vehicle. Therefore, current capital expenditures are based on customer commitments entered into previously, generally several
years ago when the customer contract was awarded. As of December 31, 2024, we had approximately $194 million in
56
outstanding cancellable and non-cancellable capital commitments. Capital expenditures by operating segment and geographic
region for the periods presented were:
Year Ended December 31,
2024
2023
2022
(in millions)
Signal and Power Solutions ............................................................................. $
580 $
639 $
573
Advanced Safety and User Experience ...........................................................
201
207
196
Other (1) ..........................................................................................................
49
60
75
Total capital expenditures ........................................................................... $
830 $
906 $
844
North America ................................................................................................. $
299 $
355 $
312
Europe, Middle East & Africa .........................................................................
295
288
271
Asia Pacific ......................................................................................................
226
252
249
South America .................................................................................................
10
11
12
Total capital expenditures ........................................................................... $
830 $
906 $
844
(1)
Other includes capital expenditures attributable to corporate administrative and support functions, including corporate headquarters and certain
technical centers.
Cash Flows
Intra-month cash flow cycles vary by region, but in general we are users of cash through the first half of a typical month
and we generate cash during the latter half of a typical month. Due to this cycle of cash flows, we may utilize short-term
financing, including our Revolving Credit Facility and European accounts receivable factoring facility, to manage our intra-
month working capital needs. Our cash balance typically peaks at month end.
We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan structures and
other distributions and advances to provide the funds necessary to meet our global liquidity needs. We utilize a global cash
pooling arrangement to consolidate and manage our global cash balances, which enables us to efficiently move cash into and
out of a number of the countries in which we operate.
Operating activities—Net cash provided by operating activities totaled $2,446 million and $1,896 million for the years
ended December 31, 2024 and 2023, respectively. Cash flows provided by operating activities for the year ended December 31,
2024 consisted primarily of net earnings of $1,810 million, increased by $1,023 million for non-cash charges for depreciation,
amortization, pension costs and extinguishment of debt, partially offset by $605 million for non-cash net gains on equity
method transactions and $16 million related to changes in operating assets and liabilities, net of restructuring and pension
contributions. Cash flows provided by operating activities for the year ended December 31, 2023 consisted primarily of net
earnings of $2,966 million, increased by $956 million for non-cash charges for depreciation, amortization and pension costs,
partially offset by $2,164 million related to non-cash changes in deferred income taxes, primarily resulting from the tax benefit
associated with the intercompany transfers of certain intellectual property, and $293 million related to changes in operating
assets and liabilities, net of restructuring and pension contributions.
Investing activities—Net cash used in investing activities totaled $507 million and $1,002 million for the years ended
December 31, 2024 and 2023, respectively. Cash flows used in investing activities for the year ended December 31, 2024
primarily consisted of capital expenditures of $830 million and technology investments of $121 million, partially offset by
proceeds from the sale of equity method investments of $448 million. Cash flows used in investing activities for the year ended
December 31, 2023 consisted primarily of capital expenditures of $906 million.
Financing activities—Net cash used in financing activities totaled $1,965 million and $807 million for the years ended
December 31, 2024 and 2023. Cash flows used in financing activities for the year ended December 31, 2024 primarily included
$4,104 million paid to repurchase ordinary shares, $1,440 million for the repayment of senior notes and $350 million for the
partial repayment of the Term Loan A, partially offset by net proceeds of $2,920 million received from the issuance of senior
and junior notes, net proceeds of $598 million received from the issuance of the Term Loan A and $454 million for borrowings
under other short-term debt agreements. Cash flows used in financing activities for the year ended December 31, 2023 primarily
included $398 million paid to repurchase ordinary shares, $309 million in repayments of term loans and $32 million of MCPS
dividend payments.
57
Off-Balance Sheet Arrangements
We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material
current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Significant Accounting Policies and Critical Accounting Estimates
Our significant accounting policies are described in Note 2. Significant Accounting Policies to the audited consolidated
financial statements included herein. Certain of our accounting policies require the application of significant judgment by
management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are
subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts,
our evaluation of trends in the industry, information provided by our customers and information available from other outside
sources, as appropriate.
We consider an accounting estimate to be critical if:
•
It requires us to make assumptions about matters that were uncertain at the time we were making the estimate, and
•
Changes in the estimate or different estimates that we could have selected would have had a material impact on our
financial condition or results of operations.
Acquisitions and Other Transactions
In accordance with the accounting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 805, Business Combinations, we allocate the purchase price of an acquired business to its
identifiable assets and liabilities based on estimated fair values. The excess of the purchase price over the amount allocated to
the assets and liabilities, if any, is recorded as goodwill. The process to estimate fair value described herein is generally
applicable to other transactions, including the fair value estimates used in establishing the identifiable assets, liabilities and
goodwill recorded upon formation of Motional, Aptiv’s autonomous driving joint venture, and the resulting equity method
investment recorded on Aptiv’s balance sheet.
An acquisition may include a contingent consideration component. The fair value of the contingent consideration is
estimated as of the date of the acquisition and is recorded as part of the purchase price. This estimate is updated in future
periods and any changes in the estimate, which are not considered an adjustment to the purchase price, are recorded in our
consolidated statements of operations.
An acquisition may also include a redeemable noncontrolling interest component. The fair value of the noncontrolling
interest is recorded to temporary equity in the consolidated balance sheet and is estimated as of the date of acquisition using a
Monte Carlo simulation approach, which includes several assumptions including estimated future profitability, expected
volatility rate and risk free rate. The redeemable noncontrolling interest is then adjusted each reporting period for the income
(loss) attributable to the noncontrolling interest, and for any measurement period adjustments necessary to record the
redeemable noncontrolling interest at the higher of its redemption value, assuming it was redeemable at the reporting date, or its
carrying value. Any measurement period adjustments are recorded to retained earnings, with a corresponding increase or
reduction to net income attributable to Aptiv.
We use all available information to estimate fair values. We typically engage outside appraisal firms to assist in the fair
value determination of identifiable intangible assets and any other significant assets or liabilities. We adjust the preliminary
purchase price allocation, as necessary, up to one year after the acquisition closing date as we obtain more information
regarding asset valuations and liabilities assumed.
Our purchase price allocation methodology contains uncertainties because it requires management to make assumptions
and to apply judgment to estimate the fair value of acquired assets and liabilities. Management estimates the fair value of assets
and liabilities based upon quoted market prices, the carrying value of the acquired assets and widely accepted valuation
techniques, including discounted cash flows and market multiple analyses. Unanticipated events or circumstances may occur
which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and
business strategies.
Other estimates used in determining fair value include, but are not limited to, future cash flows or income related to
intangibles, market rate assumptions, actuarial assumptions for benefit plans and appropriate discount rates. Our estimates of
fair value are based upon assumptions believed to be reasonable, but that are inherently uncertain, and therefore, may not be
realized. Accordingly, there can be no assurance that the estimates, assumptions, and values reflected in the valuations will be
realized, and actual results could vary materially.
58
Warranty Obligations and Product Recall Costs
Estimating warranty obligations requires us to forecast the resolution of existing claims and expected future claims on
products sold. We base our estimate on historical trends of units sold and payment amounts, combined with our current
understanding of the status of existing claims and discussions with our customers. The key factors which impact our estimates
are (1) the stated or implied warranty period; (2) OEM source; (3) OEM policy decisions regarding warranty claims; and
(4) OEMs seeking to hold suppliers responsible for product warranties. These estimates are re-evaluated on an ongoing basis.
Actual warranty obligations could differ from the amounts estimated requiring adjustments to existing reserves in future
periods. Due to the uncertainty and potential volatility of the factors contributing to developing these estimates, changes in our
assumptions could materially affect our results of operations.
In addition to our ordinary warranty provisions with customers, we are also at risk for product recall costs, which are
costs incurred when a customer or the Company recalls a product through a formal campaign soliciting return of that product.
In addition, the National Highway Traffic Safety Administration (“NHTSA”) has the authority, under certain circumstances, to
require recalls to remedy safety concerns. Product recall costs typically include the cost of the product being replaced as well as
the customer’s cost of the recall, including labor to remove and replace the recalled part. The Company accrues for costs related
to product recalls as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated.
Actual costs incurred could differ from the amounts estimated, requiring adjustments to these reserves in future periods. It is
possible that changes in our assumptions or future product recall issues could materially affect our financial position, results of
operations or cash flows.
Legal and Other Contingencies
We are involved from time to time in various legal proceedings and claims, including commercial or contractual disputes,
product liability claims, government investigations, product warranties and environmental and other matters, that arise in the
normal course of business. We routinely assess the likelihood of any adverse judgments or outcomes related to these matters, as
well as ranges of probable losses, by consulting with internal personnel involved with such matters as well as with outside legal
counsel handling such matters. We have accrued for estimated losses for those matters where we believe that the likelihood of a
loss has occurred, is probable and the amount of the loss is reasonably estimable. The determination of the amount of such
reserves is based on knowledge and experience with regard to past and current matters and consultation with internal personnel
involved with such matters and with outside legal counsel handling such matters. The amount of such reserves may change in
the future due to new developments or changes in circumstances. The inherent uncertainty related to the outcome of these
matters can result in amounts materially different from any provisions made with respect to their resolution. Refer to Note 13.
Commitments and Contingencies to the audited consolidated financial statements included herein for additional information.
Restructuring
Accruals have been recorded in conjunction with our restructuring actions. These accruals include estimates primarily
related to employee termination costs, contract termination costs and other related exit costs in conjunction with workforce
reduction and programs related to the rationalization of manufacturing and engineering processes. Actual costs may vary from
these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are appropriately
recognized when identified.
Pensions
We use actuarial estimates and related actuarial methods to calculate our obligation and expense. We are required to
select certain actuarial assumptions, which are determined based on current market conditions, historical information and
consultation with and input from our actuaries and asset managers. Refer to Note 12. Pension Benefits to the audited
consolidated financial statements included herein for additional details. The key factors which impact our estimates are
(1) discount rates; (2) asset return assumptions; and (3) actuarial assumptions such as retirement age and mortality which are
determined as of the current year measurement date. We review our actuarial assumptions on an annual basis and make
modifications to the assumptions based on current rates and trends when appropriate. Experience gains and losses, as well as
the effects of changes in actuarial assumptions and plan provisions are recognized in other comprehensive income. Cumulative
actuarial gains and losses in excess of 10% of the projected benefit obligation (“PBO”) for a particular plan are amortized over
the average future service period of the employees in that plan.
59
The principal assumptions used to determine the pension expense and the actuarial value of the projected benefit
obligation for the U.S. and non-U.S. pension plans were:
Assumptions used to determine benefit obligations at December 31:
Pension Benefits
U.S. Plans
Non-U.S. Plans
2024
2023
2024
2023
Weighted-average discount rate ..................................................................................
4.90 %
5.50 %
6.23 %
5.91 %
Weighted-average rate of increase in compensation levels .........................................
N/A
N/A
2.66 %
2.93 %
Assumptions used to determine net expense for years ended December 31:
Pension Benefits
U.S. Plans
Non-U.S. Plans
2024
2023
2022
2024
2023
2022
Weighted-average discount rate ...............................................
5.50 %
5.20 %
1.90 %
5.91 %
5.95 %
3.09 %
Weighted-average rate of increase in compensation levels ......
N/A
N/A
N/A
2.93 %
2.82 %
2.47 %
Weighted-average expected long-term rate of return on plan
assets .....................................................................................
N/A
N/A
N/A
5.18 %
4.98 %
4.46 %
We select discount rates by analyzing the results of matching each plan’s projected benefit obligations with a portfolio of
high-quality fixed income investments rated AA or higher by Standard and Poor’s or Moody’s.
Aptiv does not have any U.S. pension assets; therefore no U.S. asset rate of return calculation was necessary. The primary
funded non-U.S. plans are in the U.K. and Mexico. For the determination of 2024 expense, we assumed a long-term expected
asset rate of return of approximately 4.50% and 8.00% for the U.K. and Mexico, respectively. We evaluated input from local
actuaries and asset managers, including consideration of recent fund performance and historical returns, in developing the long-
term rate of return assumptions. The assumptions for the U.K. and Mexico are primarily conservative long-term, prospective
rates. To determine the expected return on plan assets, the market-related value of our plan assets is actual fair value.
Our pension expense for 2025 is determined at the December 31, 2024 measurement date. For purposes of analysis, the
following table highlights the sensitivity of our pension obligations and expense attributable to changes in key assumptions:
Change in Assumption
Impact on Pension Expense
Impact on PBO
25 basis point (“bp”) decrease in discount rate ..............................................
Less than + $1 million
‘+ $15 million
25 bp increase in discount rate .......................................................................
Less than + $1 million
‘- $15 million
25 bp decrease in long-term expected return on assets ..................................
‘+ $1 million
—
25 bp increase in long-term expected return on assets ...................................
‘- $1 million
—
The above sensitivities reflect the effect of changing one assumption at a time. It should be noted that economic factors
and conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not
necessarily linear. The above sensitivities also assume no changes to the design of the pension plans and no major restructuring
programs.
Based on information provided by our actuaries and asset managers, we believe that the assumptions used are reasonable;
however, changes in these assumptions could impact our financial position, results of operations or cash flows. Refer to Note
12. Pension Benefits to the audited consolidated financial statements included herein for additional information.
Valuation of Long-Lived Assets, Intangible Assets and Investments in Affiliates and Expected Useful Lives
We monitor our long-lived and definite-lived assets, including our investments in affiliates, the most significant of which
is our investment in Motional AD LLC, for impairment indicators on an ongoing basis based on projections of anticipated
future cash flows, including future profitability assessments of various manufacturing sites when events and circumstances
warrant such a review. If impairment indicators exist, we perform the required impairment analysis by comparing the
undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book
value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as
the difference between the net book value and the estimated fair value of the long-lived assets. Even if an impairment charge is
60
not required, a reassessment of the useful lives over which depreciation or amortization is being recognized may be appropriate
based on our assessment of the recoverability of these assets. We estimate cash flows and fair value through review of
appraisals and using internal budgets based on recent sales data, independent automotive production volume estimates and
customer commitments. The key factors which impact our estimates are (1) future production estimates; (2) customer
preferences and decisions; (3) product pricing; (4) manufacturing and material cost estimates; and (5) product life / business
retention. Any differences in actual results from the estimates could result in fair values different from the estimated fair values,
which could materially impact our future results of operations and financial condition. We believe that the projections of
anticipated future cash flows and fair value assumptions are reasonable; however, changes in assumptions underlying these
estimates could affect our valuations.
Goodwill and Intangible Assets
We periodically review goodwill for impairment indicators. We review goodwill for impairment annually in the fourth
quarter or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company
performs the goodwill impairment review at the reporting unit level. We perform a qualitative assessment (step 0) of whether it
is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment
testing is performed. If so, we perform the step 1 test discussed hereafter. Our qualitative assessment involves significant
estimates, assumptions, and judgments, including, but not limited to, macroeconomic conditions, industry and market
conditions, financial performance of the Company, reporting unit specific events and changes in the Company’s share price.
If the fair value of the reporting unit is greater than its carrying amount (step 1), goodwill is not considered to be
impaired. We estimate the fair value of our reporting units using a combination of a future discounted cash flow valuation
model and, if possible, a comparable market transaction model. Estimating fair value requires the Company to make judgments
about appropriate discount rates, growth rates, relevant comparable company earnings multiples and the amount and timing of
expected future cash flows. If the fair value of the reporting unit is less than its carrying amount, the Company must record an
impairment charge based on the amount by which a reporting unit’s carrying value exceeds its estimated fair value, limited to
the amount of goodwill allocated to that reporting unit.
Management performed its annual goodwill impairment test in the fourth quarter of 2024. The Company completed a
qualitative goodwill impairment assessment (step 0) and, after evaluating the results, events and circumstances of the Company,
we concluded that sufficient evidence existed to assert qualitatively that it was more likely than not that the estimated fair value
of all but our Wind River reporting unit remained substantially in excess of their carrying values. As such, the Company
completed a quantitative goodwill impairment test (step 1) for its Wind River reporting unit within the Advanced Safety and
User Experience segment, which has goodwill of $2,279 million, and determined its fair value to be in excess of its carrying
value by less than 1%. The estimated fair value of this reporting unit was primarily determined using discounted cash flow
projections. Significant assumptions included management’s forecasted cash flows, including estimated future revenue growth
and the discount rate. Forecasts of future cash flows are based on management’s best estimates. The discount rate was
determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit. The estimated fair
value of the reporting unit is sensitive to differences between estimated and actual cash flows, including changes in the
projected revenue and the discount rate used to evaluate the fair value of the reporting unit.
Although we believe our estimate of fair value is reasonable based on current and future market conditions and the best
information available at the impairment assessment date, the reporting unit’s future financial performance is dependent on our
ability to execute our business plan. Future changes in the judgments, assumptions and estimates used in our impairment testing
for goodwill, including discount rates and cash flow projections, could result in significantly different estimates of the fair
value. A reduction in the estimated fair value could result in non-cash impairment charges in a future period. For example, an
increase in the discount rate assumption by 50 basis points would result in the fair value of the reporting unit being
approximately 7%, or $230 million, below its carrying value. A 5% decrease in the estimated annual revenues used in the
analysis would result in the fair value of the reporting unit being approximately 5%, or $170 million, below its carrying value.
These sensitivities reflect the effect of changing one assumption at a time. It should be noted that economic factors and
conditions often affect multiple assumptions simultaneously and the effects of changes in key assumptions are not necessarily
linear.
We review indefinite-lived intangible assets for impairment annually or more frequently if events or changes in
circumstances indicate the assets might be impaired. Similar to the goodwill assessment described above, the Company first
performs a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset is impaired. If
necessary, the Company then performs a quantitative impairment test by comparing the estimated fair value of the asset, based
upon its forecasted cash flows, to its carrying value. Other intangible assets with definite lives are amortized over their useful
lives and are subject to impairment testing only if events or circumstances indicate that the asset might be impaired, as
described above.
61
Income Taxes
Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial
and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect
when the temporary differences reverse. A valuation allowance is recorded to reduce our deferred tax assets to the amount that
is more likely than not to be realized. Changes in tax laws or accounting standards and methods may affect recorded deferred
taxes in future periods.
When establishing a valuation allowance, we consider future sources of taxable income such as “future reversals of
existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards”
and “tax planning strategies.” A tax planning strategy is defined as “an action that: is prudent and feasible; an enterprise
ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused; and
would result in realization of deferred tax assets.” In the event we determine it is more likely than not that the deferred tax
assets will not be realized in the future, the valuation adjustment to the deferred tax assets will be charged to earnings in the
period in which we make such a determination. The valuation of deferred tax assets requires judgment and accounting for the
deferred tax effect of events that have been recorded in the financial statements or in tax returns and our future projected
profitability. Changes in our estimates, due to unforeseen events or otherwise, could have a material impact on our financial
condition and results of operations.
We calculate our current and deferred tax provision based on estimates and assumptions that could differ from the actual
results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when
identified. The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities. Our
estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts, and
circumstances existing at that time. We use a more-likely-than-not threshold for financial statement recognition and
measurement of tax positions taken or expected to be taken in a tax return. We record a liability for the difference between the
benefit recognized and measured and tax position taken or expected to be taken on our tax return. To the extent that our
assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made.
We report tax-related interest and penalties as a component of income tax expense. We do not believe there is a reasonable
likelihood that there will be a material change in the tax related balances. However, due to the complexity of some of these
uncertainties, the ultimate resolution may be materially different from the current estimate. Refer to Note 14. Income Taxes to
the audited consolidated financial statements included herein for additional information.
Recently Issued Accounting Pronouncements
Refer to Note 2. Significant Accounting Policies to the audited consolidated financial statements included herein for a
complete description of recent accounting standards which we have not yet been required to implement which may be
applicable to our operations. Additionally, the significant accounting standards that have been adopted during the year ended
December 31, 2024 are described.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks from changes in currency exchange rates and certain commodity prices. In order to
manage these risks, we operate a centralized risk management program that consists of entering into a variety of derivative
contracts with the intent of mitigating our risk to fluctuations in currency exchange rates and commodity prices. We do not
enter into derivative transactions for speculative or trading purposes.
A discussion of our accounting policies for derivative instruments is included in Note 2. Significant Accounting Policies
to the audited consolidated financial statements included herein and further disclosure is provided in Note 17. Derivatives and
Hedging Activities to the audited consolidated financial statements included herein. We maintain risk management control
systems to monitor exchange and commodity risks and related hedge positions. Positions are monitored using a variety of
analytical techniques including market value and sensitivity analysis. The following analyses are based on sensitivity tests,
which assume instantaneous, parallel shifts in currency exchange rates and commodity prices. For options and instruments with
non-linear returns, appropriate models are utilized to determine the impact of shifts in rates and prices.
We have currency exposures related to buying, selling and financing in currencies other than the local currencies in which
we operate. Historically, we have reduced our exposure through financial instruments (hedges) that provide offsets or limits to
our exposures, which are opposite to the underlying transactions. We also face an inherent business risk of exposure to
commodity prices risks, and have historically offset our exposure, particularly to changes in the price of various non-ferrous
metals used in our manufacturing operations, through fixed price purchase agreements, commodity swaps and option contracts.
We continue to manage our exposures to changes in currency rates and commodity prices using these derivative instruments.
62
Currency Exchange Rate Risk
Currency exposures may impact future earnings and/or operating cash flows. We have currency exposures related to
buying, selling and financing in currencies other than the local functional currencies in which we operate (“transactional
exposure”). We also have currency exposures related to the translation of the financial statements of our foreign subsidiaries
that use the local currency as their functional currency into U.S. dollars, the Company’s reporting currency (“translational
exposure”). The impact of translational exposure is recorded within currency translation adjustment in the consolidated
statements of comprehensive income. During the year ended December 31, 2024, the foreign currency translation adjustment
loss of $282 million was primarily due to the impact of a strengthening U.S. dollar, which increased approximately 18% in
relation to the Mexican Peso, approximately 6% in relation to the Euro and approximately 1% in relation to the Chinese Yuan
Renminbi from December 31, 2023.
As described in Note 17. Derivatives and Hedging Activities to the audited consolidated financial statements included
herein, in order to manage certain translational exposure, we have designated the 2024 Euro-denominated Senior Notes and the
2016 Euro-denominated Senior Notes as net investment hedges of the foreign currency exposure of our investments in certain
Euro-denominated subsidiaries, and had designated the 2015 Euro-denominated Senior Notes prior to being redeemed in
December 2024. We have also entered into forward contracts designated as net investment hedges of the foreign currency
exposure of our investments in certain Chinese Yuan Renminbi-denominated subsidiaries. The effective portion of the gains or
losses on instruments designated as net investment hedges are recognized within the cumulative translation adjustment
component in the consolidated statements of comprehensive income to offset changes in the value of the net investment in these
foreign currency-denominated operations.
In some instances, we choose to reduce our transactional exposures through financial instruments (hedges) that provide
offsets or limits to our exposures. Currently, our most significant hedged currency exposures relate to the Mexican Peso,
Chinese Yuan Renminbi, Polish Zloty, British Pound and Hungarian Forint. As of December 31, 2024 and 2023 the net fair
value liability of all financial instruments, including hedges and underlying transactions, with exposure to currency risk was
approximately $925 million and $507 million, respectively. The potential change in fair value for such financial instruments
from a hypothetical 10% adverse change in quoted currency exchange rates would be a loss of approximately $21 million and a
gain of approximately $23 million as of December 31, 2024 and 2023, respectively. The potential change in fair value from a
hypothetical 10% favorable change in quoted currency exchange rates would be a loss of approximately $21 million and $9
million as of December 31, 2024 and 2023, respectively. The impact of a 10% change in rates on fair value differs from a 10%
change in the net fair value liability due to the existence of hedges. The model assumes a parallel shift in currency exchange
rates; however, currency exchange rates rarely move in the same direction. The assumption that currency exchange rates change
in a parallel fashion may overstate the impact of changing currency exchange rates on assets and liabilities denominated in
currencies other than the U.S. dollar.
Commodity Price Risk
Commodity swaps/average rate forward contracts are executed to offset a portion of our exposure to the potential change
in prices mainly for various non-ferrous metals used in the manufacturing of automotive components, primarily copper. The net
fair value of our contracts was a liability of $6 million and $2 million as of December 31, 2024 and 2023, respectively. If the
price of the commodities that are being hedged by our commodity swaps/average rate forward contracts changed adversely or
favorably by 10%, the fair value of our commodity swaps/average rate forward contracts would decrease or increase by $41
million and $43 million as of December 31, 2024 and 2023, respectively. A 10% change in the net fair value asset differs from
a 10% change in rates on fair value due to the relative differences between the underlying commodity prices and the prices in
place in our commodity swaps/average rate forward contracts. These amounts exclude the offsetting impact of the price risk
inherent in the physical purchase of the underlying commodities.
Interest Rate Risk
Our exposure to market risk associated with changes in interest rates relates primarily to our debt obligations. We do not
use interest rate swap or other derivative contracts to manage our exposure to fluctuations in interest rates. As of December 31,
2024, we had approximately $250 million of floating rate debt related to the Term Loan A Credit Agreement, and no floating
rate debt outstanding related to the Credit Agreement. The Term Loan A Credit Agreement carries an interest rate, at our
option, on loan borrowings of either (a) the ABR plus 0.25% per annum, or (b) SOFR plus 1.25% per annum. The Credit
Agreement carries an interest rate, at our option, on Revolving Credit Facility borrowings of either (a) the ABR plus 0.06% per
annum, or (b) SOFR plus 1.06% per annum, which includes an adjustment resulting from the Company having met the
sustainability-linked targets for the 2023 calendar year.
The interest rate period with respect to the SOFR interest rate option can be set at one-, three-, or six-months as selected
by us in accordance with the terms of the Term Loan A Credit Agreement and the Credit Agreement (or other period as may be
agreed by the applicable lenders), but payable no less than quarterly. We may elect to change the selected interest rate option
over the term of the Revolving Credit Facility in accordance with the provisions of the Credit Agreement. The applicable
63
interest rates listed above for the Term Loan A Credit Agreement may increase or decrease from time to time in increments of
0.125% to 0.25%, up to a maximum of 0.50% based on changes to our corporate credit ratings. The applicable interest rates
listed above for the Revolving Credit Facility may increase or decrease from time to time in increments of 0.01% to 0.20%, up
to a maximum of 0.40% based on changes to our corporate credit ratings or based on whether the Company achieves or fails to
achieve certain sustainability-linked targets with respect to greenhouse gas emissions and workplace safety, as further discussed
in Note 11. Debt to the audited consolidated financial statements included herein. Accordingly, the interest rate will fluctuate
during the term of the Term Loan A Credit Agreement and the Credit Agreement based on changes in the Alternate Base Rate,
SOFR, future changes in our corporate credit ratings or the sustainability-linked targets as discussed above.
The table below indicates interest rate sensitivity on interest expense to floating rate debt based on amounts outstanding
as of December 31, 2024.
Term Loan A
Credit Agreement
Change in Rate
(impact to annual interest
expense, in millions)
25 bp decrease .......................................................................................................................................
‘- $1
25 bp increase ........................................................................................................................................
‘+ $1
64
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of APTIV PLC
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of APTIV PLC (the Company) as of December 31, 2024 and
2023, the related consolidated statements of operations, comprehensive income, redeemable noncontrolling interest and
shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes
and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position
of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 7, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as
a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.
Uncertain Tax Positions
Description
of the
Matter
As described in Notes 2 and 14, the Company establishes reserves for uncertain tax positions for positions that
are taken on their income tax returns that might not be sustained upon examination by the taxing authorities. At
December 31, 2024, the Company has recorded approximately $227 million relating to uncertain tax positions.
In determining whether an uncertain tax position exists, the Company determines, based solely on its technical
merits, whether the tax position is more likely than not to be sustained upon examination, and if so, a tax benefit
is measured on a cumulative probability basis that is more likely than not to be realized upon the ultimate
settlement. The Company identifies its certain and uncertain tax positions and then evaluates the recognition and
measurement steps to determine the amount that should be recognized. The Company then evaluates uncertain
tax positions in subsequent periods for recognition, de-recognition or re-measurement if changes have occurred,
or when effective settlement or expiration of the statute of limitations occurs.
65
Auditing the uncertain tax positions is complex because of the judgmental nature of the tax accruals and various
other tax return positions that might not be sustained upon review by taxing authorities. The Company files tax
returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world due to
its complex global footprint. Taxing jurisdictions significant to Aptiv include China, Germany, Ireland, Mexico,
South Korea, Switzerland, the U.K. and the U.S.
How We
Addressed
the Matter
in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to
the recognition, measurement and the evaluation of changes in uncertain tax positions. This included testing
controls over management’s review of the tax positions, their evaluation of whether they met the measurement
threshold and then recalculating the amounts recognized based upon a cumulative probability assessment
performed by management.
Our audit procedures to test the Company’s uncertain tax positions included, among others, involvement of our
tax professionals, including transfer pricing professionals. This included evaluating tax opinions and third-party
transfer pricing studies obtained by the Company and assessing the Company’s correspondence with the
relevant tax authorities. We analyzed the Company’s assumptions and data used to determine the amount of tax
benefit to recognize and tested the accuracy of the calculations. Our testing also included the evaluation of the
ongoing positions and consideration of changes and the ultimate settlement and payment of certain tax matters.
Revenue Recognition
Description
of the
Matter
As described in Notes 2 and 24, Aptiv occasionally enters into pricing agreements with its customers that
provide for price reductions on production parts, some of which are conditional upon achieving certain joint
cost saving targets, which are accounted for as variable consideration. In addition, from time to time, Aptiv
makes payments to customers in conjunction with ongoing business. Revenue is recognized based on the
agreed-upon price at the time of shipment, and sales incentives, allowances and certain customer payments are
recognized as a reduction to revenue at the time of the commitment to provide such incentives or make these
payments. Certain other customer payments or upfront fees are capitalized as they are directly attributable to a
contract, are incremental and management expects the payments to be recoverable. In these cases, the customer
payment is capitalized and amortized to revenue based on the transfer of goods and services to the customer for
which the upfront payment relates. As of December 31, 2024, Aptiv has recorded $53 million related to these
capitalized upfront payments.
Auditing the accounting for and completeness of arrangements containing elements such as sales incentives,
allowances and customer payments, including the appropriate timing and presentation of adjustments to revenue
as well as upfront payments to customers is judgmental due to the unique facts and circumstances involved in
each revenue arrangement, as well as on-going commercial negotiations with customers.
How We
Addressed
the Matter
in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the
review of customer contracts. This included testing controls over management’s process to identify and evaluate
customer contracts that contain sales incentives, allowances and customer payments that impact revenue
recognition.
Our audit procedures to test the completeness of the Company’s identification of such contracts included,
among others, interviewing sales representatives who are responsible for negotiations with customers and
testing cash payments and credit memos issued to customers. To test management’s assessment of customer
contracts containing sales incentives, allowances and customer payments, our procedures included, among
others, selecting a sample of customer agreements, obtaining and reviewing source documentation, including
master agreements, and other documents that were part of the agreement, and evaluating the contract terms to
determine the appropriateness of the accounting treatment.
66
Goodwill impairment — Wind River Reporting Unit
Description
of the
Matter
As described in Notes 2 and 7, the Company tests goodwill for impairment at the reporting unit level at least
annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that
goodwill might be impaired. As of December 31, 2024, the Company’s goodwill related to the Wind River
reporting unit was $2,279 million.
Auditing management’s quantitative goodwill impairment assessment for the Wind River reporting unit was
complex and required significant auditor judgment due to the degree of estimation required by management to
determine the fair value of the reporting unit. In particular, the fair value estimate was sensitive to significant
assumptions, such as changes in the revenue growth rates and discount rate, which are affected by expectations
about future market and economic conditions.
How We
Addressed
the Matter
in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the
Company’s annual goodwill assessment. This included controls over management's review of the valuation
model and the significant assumptions used in the fair value measurement discussed above.
To test the estimated fair value of the Company’s Wind River reporting unit, we performed audit procedures
that included, among others, assessing methodologies, testing the significant assumptions discussed above used
to develop the prospective financial information and testing the underlying data used by the Company in its
analysis. We compared the prospective financial information developed by management to current industry and
economic trends, historical performance, guideline public companies in the same industry, and other relevant
information. We performed sensitivity analyses of significant assumptions to evaluate the changes in the fair
value of the reporting unit that would result from changes in the assumptions. We utilized internal valuation
specialists to assist in our evaluation of the methodologies used and certain assumptions most significant to the
fair value estimate of the reporting unit, such as assessing the reasonableness of the discount rate selected by
management and the calculation of the Wind River reporting unit’s fair value. Furthermore, we assessed the
appropriateness of the disclosures in the consolidated financial statements.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2006.
Detroit, Michigan
February 7, 2025
67
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of APTIV PLC
Opinion on Internal Control Over Financial Reporting
We have audited APTIV PLC’s internal control over financial reporting as of December 31, 2024, based on criteria established
in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework) (the COSO criteria). In our opinion, APTIV PLC (the Company) maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated
statements of operations, comprehensive income, redeemable noncontrolling interest and shareholders’ equity and cash flows
for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed
in the Index at Item 15(a)(2) and our report dated February 7, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Detroit, Michigan
February 7, 2025
68
APTIV PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
2024
2023
2022
(in millions, except per share amounts)
Net sales ...................................................................................................................... $
19,713 $
20,051 $
17,489
Operating expenses:
Cost of sales ............................................................................................................
16,002
16,612
14,854
Selling, general and administrative .........................................................................
1,465
1,436
1,138
Amortization ...........................................................................................................
211
233
149
Restructuring (Note 10) ..........................................................................................
193
211
85
Total operating expenses .............................................................................................
17,871
18,492
16,226
Operating income ........................................................................................................
1,842
1,559
1,263
Interest expense .......................................................................................................
(337)
(285)
(219)
Other income (expense), net (Note 19) ...................................................................
41
63
(54)
Net gain on equity method transactions (Note 5) ...................................................
605
—
—
Income before income taxes and equity loss ...............................................................
2,151
1,337
990
Income tax (expense) benefit ..................................................................................
(223)
1,928
(121)
Income before equity loss ............................................................................................
1,928
3,265
869
Equity loss, net of tax ..............................................................................................
(118)
(299)
(279)
Net income ..................................................................................................................
1,810
2,966
590
Net income (loss) attributable to noncontrolling interest ............................................
24
28
(3)
Net loss attributable to redeemable noncontrolling interest ........................................
(1)
—
(1)
Net income attributable to Aptiv .................................................................................
1,787
2,938
594
Mandatory convertible preferred share dividends (Note 15) ......................................
—
(29)
(63)
Net income attributable to ordinary shareholders ....................................................... $
1,787 $
2,909 $
531
Basic net income per share:
Basic net income per share attributable to ordinary shareholders .......................... $
6.97 $
10.50 $
1.96
Weighted average number of basic shares outstanding ..........................................
256.38
276.92
270.90
Diluted net income per share (Note 15):
Diluted net income per share attributable to ordinary shareholders ....................... $
6.96 $
10.39 $
1.96
Weighted average number of diluted shares outstanding .......................................
256.66
282.88
271.18
See notes to consolidated financial statements.
69
APTIV PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31,
2024
2023
2022
(in millions)
Net income .................................................................................................................. $
1,810 $
2,966 $
590
Other comprehensive (loss) income:
Currency translation adjustments ............................................................................
(282)
30
(198)
Net change in unrecognized (loss) gain on derivative instruments, net of
tax (Note 17) ........................................................................................................
(261)
133
24
Employee benefit plans adjustment, net of tax (Note 12) .......................................
11
(16)
59
Net change in unrealized loss on available-for-sale debt securities, net of tax
(Note 18) .................................................................................................................
(4)
—
—
Other comprehensive (loss) income ............................................................................
(536)
147
(115)
Comprehensive income ...............................................................................................
1,274
3,113
475
Comprehensive income (loss) attributable to noncontrolling interest ....................
23
26
(1)
Comprehensive (loss) income attributable to redeemable noncontrolling interest .
(7)
3
1
Comprehensive income attributable to Aptiv .............................................................. $
1,258 $
3,084 $
475
See notes to consolidated financial statements.
70
APTIV PLC
CONSOLIDATED BALANCE SHEETS
December 31,
2024
2023
(in millions)
ASSETS
Current assets:
Cash and cash equivalents ............................................................................................................................... $
1,573
$
1,640
Restricted cash .................................................................................................................................................
1
—
Accounts receivable, net of allowance for doubtful accounts of $37 million and $52 million, respectively
(Note 2) ............................................................................................................................................................
3,261
3,546
Inventories (Note 3) .........................................................................................................................................
2,320
2,365
Other current assets (Note 4) ...........................................................................................................................
671
696
Total current assets ....................................................................................................................................
7,826
8,247
Long-term assets:
Property, net (Note 6) ......................................................................................................................................
3,698
3,785
Operating lease right-of-use assets (Note 25) ..................................................................................................
495
540
Investments in affiliates (Note 5) ....................................................................................................................
1,433
1,443
Intangible assets, net (Note 7) .........................................................................................................................
2,140
2,399
Goodwill (Note 7) ............................................................................................................................................
5,024
5,151
Other long-term assets (Note 4) .......................................................................................................................
2,842
2,862
Total long-term assets ................................................................................................................................
15,632
16,180
Total assets ................................................................................................................................................ $
23,458
$
24,427
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (Note 11) ................................................................................................................................ $
509
$
9
Accounts payable .............................................................................................................................................
2,870
3,151
Accrued liabilities (Note 8) .............................................................................................................................
1,752
1,648
Total current liabilities ...............................................................................................................................
5,131
4,808
Long-term liabilities:
Long-term debt (Note 11) ................................................................................................................................
7,843
6,204
Pension benefit obligations (Note 12) .............................................................................................................
374
417
Long-term operating lease liabilities (Note 25) ...............................................................................................
412
453
Other long-term liabilities (Note 8) .................................................................................................................
613
701
Total long-term liabilities ..........................................................................................................................
9,242
7,775
Total liabilities ...........................................................................................................................................
14,373
12,583
Commitments and contingencies (Note 13)
Redeemable noncontrolling interest (Note 2) .......................................................................................................
92
99
Shareholders’ equity:
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized; none issued and outstanding as of
December 31, 2024 and 2023 ...............................................................................................................................
—
—
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 235,035,739 and 279,033,365
issued and outstanding as of December 31, 2024 and 2023, respectively ............................................................
2
3
Additional paid-in-capital ................................................................................................................................
2,966
4,028
Retained earnings ............................................................................................................................................
7,002
8,162
Accumulated other comprehensive loss (Note 16) ..........................................................................................
(1,174)
(645)
Total Aptiv shareholders’ equity .....................................................................................................................
8,796
11,548
Noncontrolling interest .........................................................................................................................................
197
197
Total shareholders’ equity .........................................................................................................................
8,993
11,745
Total liabilities, redeemable noncontrolling interest and shareholders’ equity ............................................... $
23,458
$
24,427
See notes to consolidated financial statements.
71
APTIV PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2024
2023
2022
(in millions)
Cash flows from operating activities:
Net income ............................................................................................................................ $
1,810
$
2,966
$
590
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation ....................................................................................................................
753
679
613
Amortization ....................................................................................................................
211
233
149
Amortization of deferred debt issuance costs .................................................................
12
9
9
Restructuring expense, net of cash paid ..........................................................................
(45)
83
18
Deferred income taxes .....................................................................................................
(34)
(2,164)
(144)
Pension and other postretirement benefit expenses .........................................................
44
44
30
Loss from equity method investments, net of dividends received ..................................
130
304
284
Loss on extinguishment of debt ......................................................................................
15
1
—
Loss on sale of assets ......................................................................................................
6
2
1
Share-based compensation ..............................................................................................
120
115
86
Other charges related to Ukraine/Russia conflict ............................................................
—
—
54
Net gain on equity method transactions ..........................................................................
(605)
—
—
Changes in operating assets and liabilities:
Accounts receivable, net .................................................................................................
285
(112)
(497)
Inventories .......................................................................................................................
45
(20)
(258)
Other assets .....................................................................................................................
(15)
(187)
66
Accounts payable ............................................................................................................
(210)
4
137
Accrued and other long-term liabilities ...........................................................................
60
—
142
Other, net .........................................................................................................................
(104)
(28)
7
Pension contributions ............................................................................................................
(32)
(33)
(24)
Net cash provided by operating activities ..................................................................................
2,446
1,896
1,263
Cash flows from investing activities:
Capital expenditures ..............................................................................................................
(830)
(906)
(844)
Proceeds from sale of property ..............................................................................................
6
4
4
Proceeds from business divestitures, net of cash sold ...........................................................
—
(17)
—
Cost of business acquisitions and other transactions, net of cash acquired ..........................
—
(83)
(4,310)
Proceeds from sale of technology investments .....................................................................
—
—
3
Cost of technology investments ............................................................................................
(121)
(6)
(42)
Proceeds from the sale of equity method investment ............................................................
448
—
—
Purchase of short-term investments ......................................................................................
(748)
—
—
Redemption of short-term investments .................................................................................
740
—
—
Settlement of derivatives .......................................................................................................
(2)
6
7
Net cash used in investing activities ..........................................................................................
(507)
(1,002)
(5,182)
See notes to consolidated financial statements.
72
APTIV PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Year Ended December 31,
2024
2023
2022
(in millions)
Cash flows from financing activities:
Net proceeds (repayments) under other short-term debt agreements ....................................
454
(23)
(1)
Proceeds from term loans (net of $2, $0 and $0 issuance costs, respectively) .....................
598
—
—
Repayment of term loans .......................................................................................................
(350)
(309)
(4)
Repayment of senior notes ....................................................................................................
(1,440)
—
—
Proceeds from the issuance of senior and junior notes (net of $30, $0 and $22 issuance
costs and $5, $0 and $6 discount, respectively) ....................................................................
2,920
—
2,472
Proceeds from bridge loan (net of $17, $0 and $0 issuance costs, respectively) ..................
2,483
—
—
Repayment of bridge loan .....................................................................................................
(2,500)
—
—
Equity related transaction costs .............................................................................................
(3)
—
—
Contingent consideration payments ......................................................................................
—
(10)
—
Dividend payments of consolidated affiliates to minority shareholders ...............................
—
(2)
(9)
Repurchase of ordinary shares ..............................................................................................
(4,104)
(398)
—
Distribution of mandatory convertible preferred share cash dividends ................................
—
(32)
(63)
Taxes withheld and paid on employees’ restricted share awards ..........................................
(23)
(33)
(36)
Net cash (used in) provided by financing activities ...................................................................
(1,965)
(807)
2,359
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash ...................
(40)
(2)
(24)
(Decrease) increase in cash, cash equivalents and restricted cash .............................................
(66)
85
(1,584)
Cash, cash equivalents and restricted cash at beginning of the year ..........................................
1,640
1,555
3,139
Cash, cash equivalents and restricted cash at end of the year .................................................... $
1,574
$
1,640
$
1,555
December 31,
2024
2023
2022
(in millions)
Supplemental non-cash investing activities:
Capital expenditures included in accounts payable .................................................................... $
222
$
293
$
300
Reconciliation of cash, cash equivalents and restricted cash and cash classified as
assets held for sale:
Cash, cash equivalents and restricted cash ................................................................................. $
1,574
$
1,640
$
1,531
Cash classified as assets held for sale ........................................................................................
—
—
24
Total cash, cash equivalents and restricted cash ........................................................................ $
1,574
$
1,640
$
1,555
See notes to consolidated financial statements.
73
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