APTV 10-K & 10-Q changes, risk factors and insider trading

Global supply chain disruptions have in the past and could alsoin the future 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. For example, as a result of the rapidly evolving trade policies and tariff actions, the uncertainty in the automotive industry has increased, which could adversely affect our business and financial results. 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, 20242025 and 2023.2024. 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 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.

A prolonged economicrecession and/or a downturn orin economicglobal uncertaintyautomotive sales could adversely affect our business and cause us to require additional sources of financing,financing to continue our operations, which may not be available to us or be available only on materially different terms than what has historically been 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 decreasedincreased 1%4% from 2024 to 2025 (3%1% 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 increased vehicle production declines of 5% in Europe and 2% in North America, partially offset by increased production of 4%10% in China and 3%1% in South America, our smallest region.region, Uncertaintypartially offset by declines of 2% in North America and 1% in Europe. A prolonged downturn in or uncertainty relating to global or regional economic conditions, including as a result of trade barriers, high inflation, component shortages, labor shortages or any significant reduction in automotive sales by our customers, may result in the delay or cancellation of plans to purchase our products, which could have a material adverse effect on our business, results of operations and financial condition. Additionally, uncertainty relating to global or regional economic conditions may have an adverse impact on our business. AAny prolongedsuch downturnadverse in the global or regional automotive industry, or a significant change in product mix due to consumer demand,impacts 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. IfDeteriorating global economic conditions deteriorate and/or economicdeteriorating uncertaintyperformance increases,of our customers and potential customersbusiness may experiencealso deteriorationhave ofa theirnegative businesses,impact on our market capitalization, which maycould also result in theimpairment delaycharges. orA cancellationdetermination ofthat plansan toimpairment purchasehas occurred could have a material adverse effect on our products.financial 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.results.

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 or changes to their electricsoftware-defined vehicle investment strategies amidst reduced expectations for future consumer demand for these products, which could adversely impact the growth of this product market 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.

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 2024,2025, General Motors (“GM”) announced plans to restructurerestructured 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.

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 and cost competitive basis arewill be a significant factorsfactor 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.

Our five largest customers accounted for approximately 40%42% of our total net sales for the year ended December 31, 2024.2025. 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 yearsyear ended December 31, 2023 and 2022.2023. 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.

Any significant disruption in our supplier relationships, particularly relationships with sole-source suppliers, could harm our profitability. Furthermore, someSome 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 discontinuation or loss of business with respect to,business, or the lack of commercial success of,with respect to a vehicleparticular modelproduct for which we are a significant supplier could adversely affectreduce our financialsales performance.and harm our profitability.

Although we receive purchase orders from many of our customers, these purchase orders generally provide for the supply of a customer’s annual requirements for a particular vehicle model and assembly plant, or in some cases, for the supply of a customer’s requirements for the life of a particular vehicle model, rather than for the purchase of a specific quantity of products. TheIn addition, customers may manufacture components internally that are currently produced by outside suppliers, such as us. If our OEM customers successfully in-source products currently manufactured by us, the discontinuation or loss of business withfor respect to, or the lack of commercial success of, a vehicle model forproducts which we are a significant supplier could reduce our sales and thereby adversely affectharm our financial condition, operating results and cash flows.profitability.

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. For example, the Company assessed changes in circumstances that occurred during the third quarter of 2025 related to increased discount rates and a reduction in forecasted cash flows, which led the Company to conclude that, when considering the events and factors in totality, it was more likely than not that the estimated fair value of its Wind River reporting unit within the Advanced Safety and User Experience segment would be below its carrying value at September 30, 2025. The assessment indicated that the carrying value of this reporting unit exceeded its estimated fair value, and as a result, during the third quarter of 2025, the Company recorded a non-cash, pre-tax goodwill impairment charge of approximately $648 million related to the Wind River reporting unit. It is possible that we could incur suchadditional 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.

•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;

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 asWhile the Unitedimpacts States-Mexico-Canadato Agreement,the provideCompany certainresulting beneficialfrom dutiesthese andincremental tariffs forwere qualifyingnot importssignificant 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 Februaryduring 2025, the U.S. government imposed or threatened to impose new tariffs on imported products from Mexico, Canada and China. Thefuture impact of theseany announced 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.available, and may be material to the Company. In addition, we are continuing to work with our customers and suppliers to mitigate the impact of these incremental tariffs on our results of operations. Despite recent trade negotiations and the potential for trade agreements between the U.S. and the Mexican, Canadian and Chinese governments, given the uncertainty regarding the scope and duration of any new tariffs,tariffs and any associated retaliatory measures, 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, theThe outbreak of armed conflicts in the Middle East beginning in October 2023 has also 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 nationsgovernments 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.

We do not have a material physical presence in either UkraineRussia or Russia,Ukraine, with less than 1% of our workforce located in the countries as of December 31, 20242025. andFor the year ended December 31, 2025, less than 1% of our net sales for the year ended December 31, 2024were generated from manufacturing facilities in thoseUkraine, countries.and we did not generate any sales in Russia. 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%32% of our net sales for the year ended December 31, 2024.2025. 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.

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-attackscyberattacks and other natural or man-made incidents or disasters), which may be prolonged or go undetected. Cyber-attacksCyberattacks 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-attackscyberattacks 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.

To date, we have not experienced a system failure, cyber-attackcyberattack 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.

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.

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. For example, certain of our customers may be affected by the curtailment in the United States of government incentives for electric and hybrid vehicles.

•the generation, storage, handling, use, transportation, disposal, cleanup, or presence of, or exposure to hazardous materials;

Certain environmental laws impose liability, sometimes regardless of fault, for investigating or cleaning up contamination on or emanating from our currently or formerly owned, leasedleased, operated or operatedotherwise used 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, 20242025 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.

EnvironmentalIn addition, environmental laws and regulations are complex, change frequently and generally 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 GHGgreenhouse gas 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 businessbusiness, results of operations, cash flows, financial condition and reputation.

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 us to undertake remediation or incur additional costs related to demolition or decommissioning activities, such as abatement of asbestos containing materials or removal of storage tanks.activities. Such costs couldmay exceed our current reserves.

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’sCo-operation and Development (“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.

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 and annual capital taxes at 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 20242025 for companies resident in Schaffhausen, Switzerland.Switzerland, depending on the amount of taxable net profit and respective cantonal/communal multiplier. However, provided that certain requirements are met, we will be entitled to a “participation relief” that can effectively eliminate Swiss corporate income taxation on qualifying dividend income from subsidiaries and capital gains on the disposal of qualifying participations in subsidiaries.

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(“Reserven aus Kapitaleinlagen”) or, in such case of share repurchases, such payment is made via a virtual second line of trading through a third party-party bank. As part of the Separation, it is anticipated that existing qualifying capital contribution reserves (Reserven aus Kapitaleinlagen) will be transferred from Aptiv to its Electrical Distribution Systems business in connection with the Separation. 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 (Reserven aus Kapitaleinlagen) 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.repurchases. If Aptiv is unable to make a distribution out of qualifying capital contribution reserves,reserves (Reserven aus Kapitaleinlagen), it may consider making the distribution through a third partythird-party bank via a second line of trading if available and if doing so would avoid the withholding tax. If it does not have qualifying capital contribution reserves (Reserven aus Kapitaleinlagen) and is not able to secure an efficient second virtual 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%.35% which can be reduced depending on the tax residency of the dividend recipient.

On January 22, 2025, we announced our intentintention to pursue a separation of our Electrical Distribution Systems business into a new, independent publicly traded company (“Versigent”), through a transaction expected to be treated as a tax-free spin-off to ourits shareholders.shareholders (the “Separation”). The proposed spin-offSeparation 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 two independent, publicly traded companies, each businesscompany will be smaller and less diversified,diversified than Aptiv, with a narrower business focus and may be more vulnerable to changing market conditions. The planned separationSeparation is intended to qualify as a tax-free transaction for both Swiss and U.S. federal income tax purposes. Completion of the spin-offSeparation will be contingent upon customary closing conditions.

These or other unanticipated developments could delay or prevent the proposed spin-offSeparation or cause the proposed spin-offSeparation 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.Separation.

We may not be able to achieve the full strategic and financial benefits that we anticipate to result from the spin-off,Separation, or such benefits may be delayed or not occur at all. The anticipated benefits of the spin-offSeparation are based on a number of assumptions, some of which may prove incorrect. We alsohave incurred, and expect to incurcontinue to incur, significant expenses in connection with the spin-off,Separation, certaina significant portion of which has already been incurred or will be incurred even if the spin-offSeparation is not completed.completed, including costs of approximately $178 million during the year ended December 31, 2025. Executing the spin-offSeparation 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 face additional challenges as a result of the proposed Separation, including retaining existing or attracting new business and operational relationships, including with customers, suppliers, employees and other counterparties; and establishing transition service agreements and standalone readiness for key functions. We may experience negative reactions from financial markets if we do not complete the spin-offSeparation in a reasonable time period. Following the proposed separation,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 separationSeparation not occurred.

We are one of the largest vehicle technology suppliers and our customers include the 25 largest automotive original equipment manufacturers (“OEMs”) in the world.world, as well as many of the leading aerospace and defense companies and global telecom operators.

In connection with the Transaction, New Aptiv assumed Old Aptiv’s Long-Termlong-term Incentiveincentive Plansplans 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 eachthe Credit Agreement in which New Aptiv assumed all of Old Aptiv’s obligations under eachthe 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 eachthe Credit Agreement in which New Aptiv guaranteed the obligations under eachthe Credit Agreement. Following the reorganization transaction, Aptiv Swiss Holdings (i) replaced Old Aptiv as a guarantor of the borrowers’ obligations under the Credit Agreement, and (ii) succeeded to 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 AgreementsAgreement (and will act as the “parent entity” thereunder) and the indentures.

On January 22, 2025, we announced our intention to pursue a separation of our Electrical Distribution Systems business into a new, independent publicly traded company, through a transaction expected to be treated as a tax-free spin-off to Aptiv’sits shareholders.shareholders (the “Separation”). The Company plans to complete the separationSeparation by MarchApril 31,1, 2026, subject to customary closing conditions. The new publicly traded Electrical Distributions Systems spin-off company will be named Versigent, and will trade on the NYSE under the symbol “VGNT” following the distribution date.

We believe the Company is well-positioned forto benefit from key secular trends, including automation, electrification and digitalization, that are driving transformation in the automotive industry and expanding in scope to impact a broader range of end markets, including aerospace and defense, telecom and datacom, and diversified industrials. In particular, we believe automotive industry growth fromwill increasingly be driven by the industry’s accelerating transition to software-defined vehicles, the continued commercialization of active safety,safety theand adoption of autonomous driving technologies, and enhanced userin-cabin experiences and connected services, andall providingof thewhich require advanced software, advanced computing platforms and networkingoptimized architecturehardware requiredand architectures to dosupport so.them. WeThrough our robust operating model, we have successfully created a competitive cost structurestructure, while investing in research and development to further innovate and grow our product offerings,offerings whichacross aremultiple aligned with the high-growth industry mega-trends,industries, and have re-aligned our manufacturing footprint into an efficient, low-cost regional service model, focused on increasing our profit margins.

Our 20242025 performance reflects our solid execution and cost reduction initiativesinitiatives, despite declines in volume and the global inflationary environment.environment and evolving geopolitical issues, including global trade impacts from tariffs. Our recent financial and business achievements include the following:

•Generating new business awards of approximately $31$27 billion, based on expected volumes and prices, validating our industry leadingindustry-leading portfolio of advanced technologies tied to the acceleratingsecular megatrendsgrowth indrivers ouracross industryindustries;

•Delivering record revenue, with strong earningsrevenue growth over the prior year despite declinesthe dynamic vehicle production environment, helped by strong growth in volumeother andindustrial theend global inflationary environmentmarkets;

•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%,5.8% or (adjusted operating income margin of 12.0%,12.1%), driven by strong operating performance and cost reduction initiatives;

•FundingRepurchasing $4.122.8 billionmillion inshares with a value of $1.5 billion, including incremental share repurchases, including $3.0 billiondeliveries under the terms of the Company’s accelerated share repurchase program (“ASR”);

•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.employees; and

Our strategy is to build on these accomplishments and continue to develop and manufacture innovativeinnovative, market-relevant products for a diverse base of customers around the globeglobe, 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 capabilitiescapabilities, 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 repurchasereturn of shares.capital through share repurchases. Our key strategic priorities include:

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 airover-the-air and run and manage software at the vehicle edge. As described in Note 7. Intangible Assets and Goodwill to the audited consolidated financial statements contained herein, although the timeline has been extended for the broader transition to more fully software-defined vehicles, as evidenced by certain delays in our OEM customers’ software-defined vehicle investment strategies, we continue to believe we are well-aligned with long-term key industry technology trends and continue to make investments to further develop and grow our product offerings in this space.

We are also continuing to develop market-leading automated driving solutionssolutions, 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,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-trendstrends 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%. In May 2025, Hyundai provided additional funding to Motional, further reducing Aptiv’s common equity interest in Motional from 15% as of March 31, 2025 to approximately 13% as of December 31, 2025. The total gaingains recorded as a result of these transactions waswere approximately $33 million ($0.15 per diluted share) and approximately $641 million ($2.50 per diluted share) during the yearyears ended December 31, 2025 and 2024, respectively, 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.

ThereEvolving aretechnology manyareas risksrelated associatedto withthe thesetrends evolvingof areas,automation, electrification, and digitalization present numerous risks, including the high development costscosts, ofuncertainty active safety and autonomous driving technologies,regarding the uncertain timing of customer and consumer adoption of these technologies,adoption, increased competition from entrants outside theour traditional automotive industryindustries, 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 inacross theseour markets, the high development cost of active safety and autonomous drivingvarious 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 partnerspartners, 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’sbroader keytrends mega-trendsof automation, electrification and digitalization that are transforming multiple industries 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.

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,electrified, zero-emissionssustainable 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.

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 decreasedincreased 1%4% from 2024 to 2025 (3%1% on an Aptiv weighted market basis, which represents global vehicle production weighted to the geographic regions in which the Company generates its revenue, “AWM”revenue) from 2023 to 2024,, reflecting increased vehicle production declines of 5% in Europe and 2% in North America, partially offset by increased production of 4%10% in China and 3%1% in South America, our smallest region.region, partially offset by declines of 2% in North America and 1% in Europe. 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.

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 2025.2026. 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,Agreement (the “USMCA”), increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions, or other political pressures have affected and could continue to affect our operations and 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 nationsgovernments 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. 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 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 UkraineRussia or Russia,Ukraine, with less than 1% of our workforce located in the countries as of December 31, 20242025. andFor the year ended December 31, 2025, less than 1% of our net sales for the year ended December 31, 2024were generated from manufacturing facilities in thoseUkraine, countries.and we did not generate any sales in Russia. 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%32% of our net sales for the year ended December 31, 2024.2025. 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.

Global supply chain disruptions. Global supply chain disruptions have in the past and could in the future 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. For example, as a result of the rapidly evolving trade policies and tariff actions, the uncertainty in the automotive industry has increased, which could adversely affect our business and financial results. 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, 20242025 and 2023.2024. 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 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. Normally we do not carry inventories of such raw materials in excess of those reasonably required to meet our production and shipping schedules.

Key growth markets.regions. ThereWe havebelieve 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. Ourour strong global presence, and presence in these markets, has positioned us to experiencegenerate above-marketstrong growth rates over the long-term. We continue to expand our established presence in key growth markets,regions, 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 theOEMs in key growth market OEMsregions 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 thethese key growth markets.regions. In addition, we continue to build upon our extensive geographic reach, enabled by our leadership in the automotive market, to capitalize on opportunities in key growth markets, including aerospace and defense, telecom and datacom, and diversified industries.

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,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.China. 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. 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 theour OEMs’customers’ needs to meet increasingly stringent government regulations and meet consumer preferences for products that address the mega-trendstrends of Safe,automation, Greenelectrification and Connected, leading to increased content per vehicle, greater profitability and higher margins.digitalization. With theseour 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, including advanced software and electrificationoptimized thathardware requires a complex and reliable electrical architecture and systemsrequired to operate,enable systems 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 systemsprograms as a key productmarket market,for our products, certain of our OEM customers have recently announced delays in or changes to their electricsoftware-defined vehicle investment strategies amidst reduced expectations for future consumer demand for these products.

Global capabilities.capabilities and risks. Many OEMs are continuing to adopt globaldevelop vehicle platforms intended to increase standardization, reduce per unitper-unit cost and increase capital efficiency and profitability. In addition, geopolitical tensions are also causing them to regionalize their supply chains. As a result, OEMs are selectingprefer suppliers that have the capability to manufacture products on a worldwideglobal basis,basis aswith wellmanufacturing asand thedesign flexibility to adapt to regional variations. Suppliers with global scale and strong design, engineering and manufacturing capabilities,capabilities are best positioned to benefit from this trend. Our global manufacturing footprint enables us to serveefficiently manufacture in and supply from best cost countries at scale. Our regional teams allow us to stay connected to local market requirements and more closely partner with our customers during all phases of the globaldevelopment OEMsprocess, from design through production, while maintaining focus on aincreasing 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 Europeefficiency and Northlowering Africa,costs. and the Asia Pacific market from China, and we have continued to rotate ourIncreasing manufacturing automation, footprint rotation to best cost locationscountries, withinand theseother regions.operational initiatives have supported our commitment to continuous improvement, leveraging scale and enhancing efficiency to improve our margins.

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 (the “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 asWhile the Unitedimpacts States-Mexico-Canadato Agreement,the provideCompany certainresulting beneficialfrom dutiesthese andincremental tariffs forwere qualifyingnot importssignificant 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 Februaryduring 2025, the U.S. government imposed or threatened to impose new tariffs on imported products from Mexico, Canada and China. Thefuture impact of theseany announced 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.available, and may be material to the Company. In addition, we are continuing to work with our customers and suppliers to mitigate the impact of these incremental tariffs on our results of operations. Despite recent trade negotiations and the potential for trade agreements between the U.S. and the Mexican, Canadian and Chinese governments, given the uncertainty regarding the scope and duration of any new tariffs,tariffs and any associated retaliatory measures, 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%approximately 13% (5% in Northern Border Zone), 12% and 12%,20%, effective January 1, 2026, 2025 and 2024, respectively. Additionally, theThe government of Mexico has indicated it may implement other labor reforms, such as aan billinitiative to shorten the work week from 48 to 40 hours.hours, as early as January 1, 2027, through a gradual reduction of two hours per year. Labor costs have increased significantly in Mexico as a result of this and other labor reform initiatives, necessitating a strategic review of more cost-competitive jurisdictions and a greater acceleration in manufacturing automation. 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, theThe outbreak of armed conflicts in the Middle East beginning in October 2023 has also 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 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.competitive and to maintain or increase our revenues. 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 capabilitiescapabilities, we are well positioned to meet the increasingly stringent vehicle manufacturer demands and consumer preferences for high-technology content in automobiles.

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 three and six months ended MarchJune 31,30, 2026. This discussion should be read in conjunction with Item 1. Financial Statements. Our MD&A is presented in eight sections:

Aptiv is a global industrial technology company focuseddelivering onadvanced enablingsolutions aacross moreautomotive, automated,commercial electrifiedvehicle, aerospace and digitalizeddefense, future. We deliver flexibletelecom and scalable solutions that support our customers’ transition to an increasingly software-defined future. Our technologies reach from sensor to cloud, including the hardware and software necessary to support automotivedatacom, and other industriesdiversified industrial end markets. Our differentiated portfolio enables devices and systems to sense, think, act, and continuously optimize performance. Building on adecades of innovation, Aptiv brings global basis.scale and a resilient, localized value chain to customers across the globe. Our Intelligent Systems segment (formerly known as Advanced Safety and User Experience segment) provides advanced software and services, intelligent sensors and high-performance compute platforms; and our Engineered Components segment (formerly known as the Engineered Components Group segment) provides connection systems, high-performance interconnects, and cable management and protection solutions;solutions. andOur ourformer Electrical Distribution Systems segmentsegment, provideswhich is presented as a discontinued operation for all periods presented as discussed below, provided low voltage and high voltage power, signal and data distribution.

We are one of the largest vehicle technology suppliers and our customers include 24 of the 25 largest automotive original equipment manufacturers (“OEMs”) in the world, as well as many of the leading aerospace and defense companies and global telecom operators.

On JanuaryApril 22,1, 2025,2026 (the “Distribution Date”), the Company announcedcompleted its intention to pursue athe separation of its Electrical Distribution Systems business into a new, independent publicly traded company, Versigent PLC (“Versigent”), by means of a spin-off to its shareholders (the “Separation”). On April 1, 2026, the Company completed the Separation by distributing to Aptiv shareholders on a pro rata basis all of the outstanding ordinary shares of Versigent. To effect the Separation, the Company distributed to its shareholders one ordinary share of Versigent for every three Aptiv ordinary shares outstanding as of March 17, 2026. Versigent began trading on the New York Stock Exchange (“NYSE”) under the symbol “VGNT” on April 1, 2026. DuringVersigent’s historical financial results through the threeDistribution monthsDate endedare Marchreflected 31, 2026 and 2025,in the CompanyCompany’s incurredconsolidated costsfinancial ofstatements approximatelyas $57a milliondiscontinued andoperation, $19as million,more respectively,fully related to the Separation. These costs, which are includeddescribed in selling, general and administrative expense within the consolidated statements of operations, are primarily related to third party professional fees associated with planning and executing the Separation. The Company expects to continue to incur additional expenses related to the Separation during 2026. Refer to Note 22.21. SeparationDiscontinued of Electrical Distribution SystemsOperations to the consolidated financial statements contained herein for additional information.herein.

Our total net sales during the three and six months ended MarchJune 31,30, 2026 were $5.1$3.3 billion and $6.3 billion, an increase of 5%2% and 2% compared to the same periodperiods of 2025, respectively. Our volumes increased 2%3% for the three months ended MarchJune 31,30, 2026, which primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to flat global automotive production (flat on an Aptiv weighted market basis, which represents global vehicle production weighted to the geographic regions in which the Company generates its revenue, “AWM”). Our volumes increased 1% for the six months ended June 30, 2026, which primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to decreased global automotive production of 3%1% (down 2%1% on an AptivAWM weighted market basis, which represents global vehicle production weighted to the geographic regions in which the Company generates its revenue, “AWM”basis).

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 MarchJune 31,30, 2026 and December 31, 2025. 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.

Commercializing the evolution towards software-defined components and systems across multiple industries, including automotive. We expect the trends of automation, electrification and digitalization to create growth opportunities, as they drive similar product requirements for mission-critical applications across multiple industries, namely increased demand for advanced software and optimized hardware. Intelligent, software-defined solutions, such as increasingly capable automated driving technologies, offer significant societal benefits and create long-term growth opportunities for our product offerings, including new customers such as mobility providers, industrial facility operators, telecommunications and energy grid network operators and smart cities. Growth opportunities across the automotive and other industries will be driven by increased hardware and software content, greater computing power and software requirements, enhanced solutions for lifecycle management and connectivity, and continued electrification. We believe the complexity of these systems will also require ongoing software support services, as they will be continuously upgraded with new features and performance enhancements.

Global capabilities and risks. Many OEMs are continuing to develop vehicle platforms intended to increase standardization, reduce per-unit cost and increase capital efficiency and profitability. In addition, geopolitical tensions are also causing them to regionalize their supply chains. As a result, OEMs prefer suppliers that have the capability to manufacture products on a global basis with manufacturing and design 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 manufacturing footprint enables us to efficiently manufacture inin, and supply fromfrom, best cost countries at scale. Our regional teams allow us to stay connected to local market requirements and more closely partner with our customers during all phases of the development process, from design through production, while maintaining focus on increasing efficiency and lowering costs. Increasing manufacturing automation, footprint rotation to best cost countries, and other operational initiatives have supported our commitment to continuous improvement, leveraging scale and enhancing efficiency to improve our margins.

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 20,70012,700 scientists, engineers and technicians focused on developing leading product solutions for our key markets, located at 1110 major technical centers in China, Germany, India, Mexico, Poland, Singapore and the United States. During the year ended December 31, 2025, we invested approximately $1.7$1.4 billion (which includes approximately $573$515 million co-investment by customers and government agencies) in research and development, including engineering, to maintain our portfolio of innovative products, and own/hold approximately 11,00010,400 patents and protective rights as of December 31, 2025. We also encourage “open innovation” and collaborate extensively with peers in the industry, government agencies and academic institutions. Our technology competencies are recognized by both customers and government agencies, which, as noted above, co-invest in new product development, accelerating the pace of innovation and reducing the risk associated with successful commercialization of technological breakthroughs.

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%83% 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%26% of the hourly workforce as of MarchJune 31,30, 2026. 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, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning our manufacturing capacity with the current levels of automotive production in each region. 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.

We have a strong balance sheet with gross debt of approximately $9.5$5.4 billion, which includes the issuance of the Versigent Debt,billion and substantial available liquidity of approximately $6.5$3.3 billion consisting of cash and cash equivalents and available financing under our Revolving Credit Facility, Spin-Off Revolving Credit Facility and committed European accounts receivable factoring facility (as defined below in Liquidity and Capital Resources) as of MarchJune 31,30, 2026, and no significant U.S. defined benefit or workforce postretirement health care benefits and employer-paid postretirement basic life insurance benefits (“OPEB”) 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.

Three and Six Months Ended MarchJune 31,30, 2026 versus Three and Six Months Ended MarchJune 31,30, 2025

The results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

Below is a summary of our total net sales for the three months ended MarchJune 31,30, 2026 versus MarchJune 31,30, 2025.

Total net sales for the three months ended MarchJune 31,30, 2026 increased 5%2% compared to the three months ended MarchJune 31,30, 2025. Our volumes increased 2%3% for the period, which primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to decreasedflat global automotive production of 3% (down 2%flat on an AWM basis). Our net sales also reflect the impact of contractual price reductions, net of price recoveries, of $27$54 million and favorable foreign currency impacts, primarily related to the Euro.Chinese Yuan Renminbi and Euro, partially offset by the South Korean Won.

Cost of sales increased $261$31 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, as summarized below. The Company’s material cost of sales was approximately 50% of net sales for both the three months ended MarchJune 31,30, 2026 and 2025.

The increase in cost of sales reflects unfavorableincreased volumes, partially offset by favorable impacts from currencyoperational exchange, increased volumesperformance and thecurrency impactsexchange of operational performance. Cost of sales was also impacted by the following items in Other above:.

Selling, general and administrative expense (“SG&A”) primarily includes administrative expenses, information technology costs, incentive compensation related costs, separation costs, acquisition and project portfolio costs and selling and marketing expenses. SG&A increasedremained consistent as a percentage of net sales for the three and six months ended MarchJune 31,30, 2026 as compared to 2025, primarily due to an increase of $38 million in Separation costs.2025.

Amortization expense reflects the non-cash charge related to definite-lived intangible assets. Amortization during the three and six months ended MarchJune 31,30, 2026 and 2025 reflects the continued amortization of our definite-lived intangible assets, which resulted primarily from our acquisitions, over their estimated useful lives.

TheDuring the three and six months ended June 30, 2026, the Company recorded employee-related and other restructuring charges totaling approximately $62$24 million duringand the$40 threemillion, months ended March 31, 2026, of which approximately $33 million was recognized for the initiation of the closure of a European manufacturing site within the Electrical Distribution Systems segment.respectively. We expect to make cash payments of approximately $110$45 million over the next twelve months pursuant to currently implemented restructuring programs.

During the three and six months ended MarchJune 31,30, 2025, Aptiv recorded employee-related and other restructuring charges totaling approximately $37$27 million and $49 million, ofrespectively, which included the recognition of approximately $13$12 million was recognized for the initiation of the closure of a European manufacturing site within the Electrical Distribution Systems segment, and approximately$15 $3million, million was recognizedrespectively, for a program initiated in the fourth quarter of 2024 focused on global salaried workforce optimization, primarily in the European region.

We expect to continue to incur additional restructuring expense in 2026 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 $20$15 million (of which approximately $10 million relates to the Engineered Components segment, approximately $5 million relates to the Electrical Distribution Systems segment and approximately $5 million relates to the Intelligent Systems segment) for programs approved as of MarchJune 31,30, 2026. 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.

The decrease in interest expense during the three and six months ended MarchJune 31,30, 2026 compared to 2025 primarily reflects the full repayment of the $600 million Term Loan A in the fourth quarter of 2024 and first quarter of 2025, the full repayment of our European accounts receivable factoring facility in the first half of 2025 and2025, the February 2026 redemption of the $266 million in aggregate principal amount outstanding of 4.35% Senior Notes, partially offset by the issuanceApril 2026 redemption of the $1.6$401 billionmillion in aggregate principal amount outstanding of the 4.650% Senior Notes and the April 2026 redemption of the $1,446 million in aggregate principal amount of Spin-Offcertain Seniorsenior Notesnotes inpursuant Marchto 2026.the Tender Offer.

The Company’s effective tax rate for the three and six months ended MarchJune 31,30, 2026 includes net discrete tax expensebenefits of approximately $17$5 million and $7 million, respectively, primarily related to taxprior accrualsyear associated with the Separation.true-ups. The Company’s effective tax rate for the three and six months ended MarchJune 31,30, 2025 includes net discrete tax benefits of approximately $40 million and net discrete tax expense of approximately $281$241 million, respectively, primarily related to changes in valuation allowances, as described below, partially offset by changes in reserves.

Net sales, gross margin as a percentage of net sales and Adjusted Operating Income by segment for the three and six months ended MarchJune 31,30, 2026 and 2025 are as follows:

As noted in the table above, Adjusted Operating Income for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025 was impacted by volume, including contractual price reductions, net of price recoveries, of $27$54 million and product mix, as well as operational performance. Adjusted Operating Income was also impacted by the following itemitems included within Other in the table above:

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,requirements and operational restructuring activities and Separation 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 MarchJune 31,30, 2026, we had cash and cash equivalents of $3.2$761 billionmillion and net debt (defined as outstanding debt less cash and cash equivalents) of $6.2$4.6 billion, both of which include the issuance of the Versigent Debt.billion. The following table summarizes our available liquidity, which includes cash, cash equivalents and funds available under our significant committed credit facilities, as of MarchJune 31,30, 2026:

(1)Availability reduced by $2 million in letters of credit issued under the Credit Agreement as of MarchJune 31,30, 2026.

(2)Based on MarchJune 31,30, 2026 foreign currency rates, subject to the availability of eligible accounts receivable.

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 MarchJune 31,30, 2026, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled approximately $3.1$0.7 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.

On January 22, 2025, the Company announced its intention to pursue a Separation of its Electrical Distribution Systems business. On April 1, 2026, pursuantPursuant to the Separation and Distribution Agreement, the Company transferred to Versigent the assets and liabilities that comprised Versigent’s business and completed the Separation on April 1, 2026 by distributing to Aptiv shareholders on a pro rata basis all of the outstanding ordinary shares of Versigent.

In connection with the Separation, the Company received an initiala cash distribution of approximately $1.9 billion from Versigent. The Company used the proceeds received from the cash distribution to redeem the 4.650% Senior Notes and settle the Tender Offer, as described in Note 8. Debt to the consolidated financial statements contained herein. Versigent financed this cash distribution through the issuance of approximately $2.1 billion of debt, consisting of the Spin-Off Term Loan A Facility and the Spin-Off Senior Notes (collectively, the “Versigent Debt”), as described below, which was transferred to Versigent on April 1, 2026, and is no longer reflected in the Company’s consolidated financial statements beginning April 1, 2026.

In connection with the Separation, Aptiv and Versigent entered into various agreements to effect the Separation and to provide a framework for their relationship following the Separation, which included a Separation and Distribution Agreement, Transition Services Agreement, Tax Matters Agreement, Employee Matters Agreement, Intellectual Property Cross License Agreement and Supply Agreements. The transition services primarily involve Aptiv providing certain services to Versigent related to information technology for terms of up to 24 months following the Separation. In addition, the Company expects to recognize the payment of approximately $50 million in bank-related success fees in the second quarter of 2026 coinciding with completion of the Separation.