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, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, 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, 2017, 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 5, 2018 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.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2006

Detroit, Michigan

February 5, 2018

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, 2017, 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, 2017, 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 Aptiv PLC as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2017 and related footnotes and schedule and our report dated February 5, 2018 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 5, 2018

APTIV PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2017				2016				2015
	(in millions, except per share amounts)
Net sales	$	12,884			$	12,274			$	10,864
Operating expenses:
Cost of sales	10,270				9,527				8,691
Selling, general and administrative	952				924				803
Amortization	117				117				70
Restructuring (Note 10)	129				167				65
Total operating expenses	11,468				10,735				9,629
Operating income	1,416				1,539				1,235
Interest expense	(140		)		(155		)		(124		)
Other expense, net (Note 19)	(21		)		(384		)		(114		)
Income from continuing operations before income taxes and equity income	1,255				1,000				997
Income tax expense	(223		)		(167		)		(161		)
Income from continuing operations before equity income	1,032				833				836
Equity income, net of tax	31				35				16
Income from continuing operations	1,063				868				852
Income from discontinued operations, net of tax (Note 25)	365				458				683
Net income	1,428				1,326				1,535
Net income attributable to noncontrolling interest	73				69				85
Net income attributable to Aptiv	$	1,355			$	1,257			$	1,450
Amounts attributable to Aptiv:
Income from continuing operations	$	1,021			$	834			$	813
Income from discontinued operations	334				423				637
Net income	$	1,355			$	1,257			$	1,450
Basic net income per share:
Continuing operations	$	3.82			$	3.05			$	2.85
Discontinued operations	1.25				1.55				2.23
Basic net income per share attributable to Aptiv	$	5.07			$	4.60			$	5.08
Weighted average number of basic shares outstanding	267.16				273.02				285.20
Diluted net income per share:
Continuing operations	$	3.81			$	3.05			$	2.84
Discontinued operations	1.25				1.54				2.22
Diluted net income per share attributable to Aptiv	$	5.06			$	4.59			$	5.06
Weighted average number of diluted shares outstanding	268.03				273.70				286.64
Cash dividends declared per share	$	1.38			$	1.16			$	1.00

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Net income	$	1,428			$	1,326			$	1,535
Other comprehensive income (loss):
Currency translation adjustments	315				(147		)		(344		)
Net change in unrecognized gain (loss) on derivative instruments, net of tax (Note 17)	15				95				(28		)
Employee benefit plans adjustment, net of tax (Note 12)	11				(139		)		64
Other comprehensive income (loss)	341				(191		)		(308		)
Comprehensive income	1,769				1,135				1,227
Comprehensive income attributable to noncontrolling interests	83				60				69
Comprehensive income attributable to Aptiv	$	1,686			$	1,075			$	1,158

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED BALANCE SHEETS

	December 31,
	2017				2016
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1,596			$	737
Restricted cash	1				1
Accounts receivable, net	2,440				2,130
Inventories (Note 3)	1,083				859
Other current assets (Note 4)	521				302
Current assets of discontinued operations (Note 25)	—				1,390
Total current assets	5,641				5,419
Long-term assets:
Property, net (Note 6)	2,804				2,325
Investments in affiliates	91				67
Intangible assets, net (Note 7)	1,219				1,148
Goodwill (Note 7)	1,944				1,502
Other long-term assets (Note 4)	470				280
Long-term assets of discontinued operations (Note 25)	—				1,551
Total long-term assets	6,528				6,873
Total assets	$	12,169			$	12,292
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt (Note 11)	$	17			$	10
Accounts payable	2,227				1,820
Accrued liabilities (Note 8)	1,296				1,242
Current liabilities of discontinued operations (Note 25)	—				1,076
Total current liabilities	3,540				4,148
Long-term liabilities:
Long-term debt (Note 11)	4,132				3,953
Pension benefit obligations	454				439
Other long-term liabilities (Note 8)	526				371
Long-term liabilities of discontinued operations (Note 25)	—				618
Total long-term liabilities	5,112				5,381
Total liabilities	8,652				9,529
Commitments and contingencies (Note 13)
Shareholders’ equity:
Preferred shares, $0.01 par value per share, 50,000,000 shares authorized, none issued and outstanding	—				—
Ordinary shares, $0.01 par value per share, 1,200,000,000 shares authorized, 265,839,794 and 269,789,959 issued and outstanding as of December 31, 2017 and December 31, 2016, respectively	3				3
Additional paid-in-capital	1,649				1,633
Retained earnings	2,118				1,980
Accumulated other comprehensive loss (Note 16)	(471		)		(1,215		)
Total Aptiv shareholders’ equity	3,299				2,401
Noncontrolling interest	218				362
Total shareholders’ equity	3,517				2,763
Total liabilities and shareholders’ equity	$	12,169			$	12,292

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Cash flows from operating activities:
Net income	$	1,428			$	1,326			$	1,535
Income from discontinued operations, net of tax	365				458				683
Income from continuing operations	1,063				868				852
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	429				372				274
Amortization	117				117				70
Amortization of deferred debt issuance costs	7				9				11
Restructuring expense, net of cash paid	2				77				(16		)
Deferred income taxes	(26		)		(121		)		(6		)
Pension and other postretirement benefit expenses	51				32				36
Income from equity method investments, net of dividends received	(18		)		(18		)		1
Loss on extinguishment of debt	—				73				58
(Gain) loss on sale of assets	(3		)		(147		)		3
Share-based compensation	62				62				67
Changes in operating assets and liabilities:
Accounts receivable, net	(287		)		(207		)		(183		)
Inventories	(224		)		(45		)		(14		)
Other assets	(187		)		51				(6		)
Accounts payable	268				35				142
Accrued and other long-term liabilities	(72		)		440				(101		)
Other, net	(36		)		(61		)		(11		)
Pension contributions	(40		)		(43		)		(37		)
Net cash provided by operating activities from continuing operations	1,106				1,494				1,140
Net cash provided by operating activities from discontinued operations	362				447				563
Net cash provided by operating activities	1,468				1,941				1,703
Cash flows from investing activities:
Capital expenditures	(698		)		(657		)		(503		)
Proceeds from sale of property / investments	7				19				7
Net proceeds from divestiture of discontinued operations	—				48				713
Proceeds from business divestitures, net of payments of $14 in 2015	—				197				11
Cost of business acquisitions, net of cash acquired	(324		)		(15		)		(1,654		)
Cost of technology investments	(50		)		(3		)		(3		)
Settlement of derivatives	(28		)		(1		)		—
Net cash used in investing activities from continuing operations	(1,093		)		(412		)		(1,429		)
Net cash used in investing activities from discontinued operations	(159		)		(166		)		(270		)
Net cash used in investing activities	(1,252		)		(578		)		(1,699		)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	(17		)		(34		)		(214		)
Repayment of senior notes	—				(862		)		(546		)
Proceeds from issuance of senior notes, net of issuance costs	796				852				2,043
Contingent consideration and deferred acquisition purchase price payments	(24		)		(4		)		—
Dividend payments of consolidated affiliates to minority shareholders	(38		)		(42		)		(63		)
Repurchase of ordinary shares	(383		)		(634		)		(1,159		)
Distribution of cash dividends	(310		)		(317		)		(286		)
Dividend received from spin-off of Delphi Technologies	1,148				—				—
Cash transferred to Delphi Technologies related to spin-off	(863		)		—				—
Cash transferred from Delphi Technologies related to spin-off	180				—				—
Taxes withheld and paid on employees' restricted share awards	(33		)		(40		)		(59		)
Net cash provided by (used in) financing activities	456				(1,081		)		(284		)
Effect of exchange rate fluctuations on cash and cash equivalents	86				(23		)		(45		)
Increase (decrease) in cash and cash equivalents	758				259				(325		)
Cash and cash equivalents at beginning of the year	838				579				904
Cash and cash equivalents at end of the year	$	1,596			$	838			$	579
Cash and cash equivalents of discontinued operations	$	—			$	101			$	152
Cash and cash equivalents of continuing operations	$	1,596			$	737			$	427

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

	Ordinary Shares
	Number of Shares			Amount				Additional Paid in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Total Aptiv Shareholders’ Equity				Noncontrolling Interest				Total Shareholders’ Equity
	(in millions)
Balance at December 31, 2014	291			$	3			$	1,700			$	1,548			$	(741	)		$	2,510			$	503			$	3,013
Net income	—			—				—				1,450				—				1,450				85				1,535
Other comprehensive loss	—			—				—				—				(292		)		(292		)		(16		)		(308		)
Dividends on ordinary shares	—			—				4				(290		)		—				(286		)		—				(286		)
Dividend payments of consolidated affiliates to minority shareholders	—			—				—				—				—				—				(89		)		(89		)
Taxes withheld on employees' restricted share award vestings	—			—				(59		)		—				—				(59		)		—				(59		)
Repurchase of ordinary shares	(15	)		—				(78		)		(1,081		)		—				(1,159		)		—				(1,159		)
Share-based compensation	2			—				75				—				—				75				—				75
Excess tax benefits on share-based compensation	—			—				11				—				—				11				—				11
Balance at December 31, 2015	278			$	3			$	1,653			$	1,627			$	(1,033	)		$	2,250			$	483			$	2,733
Net income	—			—				—				1,257				—				1,257				69				1,326
Other comprehensive loss	—			—				—				—				(182		)		(182		)		(9		)		(191		)
Dividends on ordinary shares	—			—				3				(320		)		—				(317		)		—				(317		)
Dividend payments of consolidated affiliates to minority shareholders	—			—				—				—				—				—				(80		)		(80		)
Taxes withheld on employees' restricted share award vestings	—			—				(40		)		—				—				(40		)		—				(40		)
Repurchase of ordinary shares	(10	)		—				(51		)		(584		)		—				(635		)		—				(635		)
Divestiture of business	—			—				—				—				—				—				(101		)		(101		)
Share-based compensation	2			—				68				—				—				68				—				68
Balance at December 31, 2016	270			$	3			$	1,633			$	1,980			$	(1,215	)		$	2,401			$	362			$	2,763
Net income	—			—				—				1,355				—				1,355				73				1,428
Other comprehensive income	—			—				—				—				331				331				10				341
Dividends on ordinary shares	—			—				4				(373		)		—				(369		)		—				(369		)
Dividend payments of consolidated affiliates to minority shareholders	—			—				—				—				—				—				(67		)		(67		)
Taxes withheld on employees' restricted share award vestings	—			—				(33		)		—				—				(33		)		—				(33		)
Repurchase of ordinary shares	(5	)		—				(25		)		(358		)		—				(383		)		—				(383		)
Distribution of Delphi Technologies	—			—				—				(1,814		)		413				(1,401		)		(160		)		(1,561		)
Dividend received from spin-off of Delphi Technologies	—			—				—				1,148				—				1,148				—				1,148
Cash transferred from Delphi Technologies related to spin-off	—			—				—				180				—				180				—				180
Share-based compensation	1			—				70				—				—				70				—				70
Balance at December 31, 2017	266			$	3			$	1,649			$	2,118			$	(471	)		$	3,299			$	218			$	3,517

See notes to consolidated financial statements.

APTIV PLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

General and basis of presentation—“Aptiv,” the “Company,” “we,” “us” and “our” refer to Aptiv PLC, a public limited company which was formed under the laws of Jersey on May 19, 2011 as Delphi Automotive PLC, which together with its subsidiaries acquired certain assets of the former Delphi Corporation and completed an initial public offering on November 22, 2011. The former Delphi Corporation (now known as DPH Holdings Corp. (“DPHH”)) and, as the context may require, its subsidiaries and affiliates, are also referred to herein as “Old Delphi.” On December 4, 2017 (the “Distribution Date”), the Company completed the separation (the “Separation”) of its former Powertrain Systems segment by distributing to Aptiv shareholders on a pro rata basis all of the issued and outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies”), a public limited company formed to hold the spun-off business. To effect the Separation, the Company distributed to its shareholders one ordinary share of Delphi Technologies for every three Aptiv ordinary shares outstanding as of November 22, 2017, the record date for the distribution. Following the Separation, the remaining company changed its name to Aptiv PLC and New York Stock Exchange ("NYSE") symbol to "APTV." Also, as a result of the Separation, Delphi Technologies became an independent public company trading on the NYSE under the symbol "DLPH" as of the Distribution Date. Delphi Technologies' historical financial results through the Distribution Date are reflected in the Company’s consolidated financial statements as a discontinued operation, as more fully described in Note 25. Discontinued Operations.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Nature of operations—Aptiv is a leading global technology and mobility company serving the automotive sector. We design and manufacture vehicle components and provide electrical, electronic and active safety technology solutions to the global automotive and commercial vehicle markets. Aptiv is one of the largest vehicle component manufacturers, and its customers include all 25 of the largest automotive original equipment manufacturers (“OEMs”) in the world. Aptiv operates 109 major manufacturing facilities and 14 major technical centers utilizing a regional service model that enables the Company to efficiently and effectively serve its global customers from best cost countries. Aptiv has a presence in 45 countries and has approximately16,000 scientists, engineers and technicians focused on developing market relevant product solutions for its customers. In line with the long term growth in emerging markets, Aptiv has been increasing its focus on these markets, particularly in China, where the Company has a major manufacturing base and strong customer relationships.

Corporate history—In October 2005, Old Delphi and certain of its United States (“U.S.”) subsidiaries filed voluntary petitions for reorganization relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). Old Delphi's non-U.S. subsidiaries, which were not included in the Chapter 11 Filings, continued their business operations without supervision from the Bankruptcy Court and were not subject to the requirements of the Bankruptcy Code. On August 19, 2009, Delphi Automotive LLP, a limited liability partnership organized under the laws of England and Wales, was formed for the purpose of acquiring certain assets and subsidiaries of Old Delphi (“the Acquisition”), and on October 6, 2009 (the “Acquisition Date”) Delphi Automotive LLP acquired the major portion of the business of Old Delphi and issued membership interests to a group of investors consisting of lenders to Old Delphi, General Motors Company (“GM”) and the Pension Benefit Guaranty Corporation (the “PBGC”).

On March 31, 2011, all of the outstanding Class A and Class C membership interests held by GM and the PBGC were redeemed, respectively, for approximately $4.4 billion. On May 19, 2011, Delphi Automotive PLC was formed as a Jersey public limited company, and had nominal assets, no liabilities and had conducted no operations prior to its initial public offering. On November 22, 2011, in conjunction with the completion of its initial public offering by the selling shareholders, all of the outstanding equity of Delphi Automotive LLP was exchanged for ordinary shares of Delphi Automotive PLC. As a result, Delphi Automotive LLP became a wholly-owned subsidiary of Delphi Automotive PLC. The transaction whereby Delphi Automotive LLP became a wholly-owned subsidiary of Delphi Automotive PLC had no accounting effects.

On December 4, 2017, the Company completed the Separation of its former Powertrain Systems segment by distributing to Aptiv shareholders on a pro rata basis all of the outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies”), a public limited company formed to hold the spun-off business. To effect the Separation, the Company distributed to its shareholders one ordinary share of Delphi Technologies for every three Aptiv ordinary shares outstanding as of November 22, 2017, the record date for the distribution. Following the Separation, the remaining company changed its name to Aptiv PLC.

2. SIGNIFICANT ACCOUNTING POLICIES

Consolidation—The consolidated financial statements include the accounts of Aptiv and U.S. and non-U.S. subsidiaries in which Aptiv holds a controlling financial or management interest and variable interest entities of which Aptiv has determined that it is the primary beneficiary. Aptiv’s share of the earnings or losses of non-controlled affiliates, over which Aptiv exercises significant influence (generally a 20% to 50% ownership interest), is included in the consolidated operating results using the equity method of accounting. When Aptiv does not have the ability to exercise significant influence (generally when ownership interest is less than 20%), investments in non-consolidated affiliates are accounted for using the cost method. All significant intercompany transactions and balances between consolidated Aptiv businesses have been eliminated. The Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines that such a decline has occurred, an impairment loss is recorded, which is measured as the difference between carrying value and estimated fair value. Estimated fair value is generally determined using an income approach based on discounted cash flows or negotiated transaction values.

During the years ended December 31, 2017, 2016 and 2015, Aptiv received dividends of $15 million, $17 million and $17 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 from continuing operations.

Investments in affiliates accounted for under the cost method totaled $56 million and $6 million as of December 31, 2017 and 2016, respectively, and are classified within other long-term assets in the consolidated balance sheet. Refer to Note 5. Investments in Affiliates for further information.

Use of estimates—Preparation of consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect amounts reported therein. Generally, matters subject to estimation and judgment include amounts related to accounts receivable realization, inventory obsolescence, asset impairments, useful lives of intangible and fixed assets, deferred tax asset valuation allowances, income taxes, pension benefit plan assumptions, accruals related to litigation, warranty costs, environmental remediation costs, contingent consideration arrangements, worker’s compensation accruals and healthcare accruals. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from those estimates.

Revenue recognition—Sales are recognized when there is evidence of a sales agreement, the delivery of goods has occurred, the sales price is fixed or determinable and the collectability of revenue is reasonably assured. Sales are generally recorded upon shipment of product to customers and transfer of title under standard commercial terms. In addition, if Aptiv enters into retroactive price adjustments with its customers, these reductions to revenue are recorded when they are determined to be probable and estimable. From time to time, Aptiv enters into pricing agreements with its customers that provide for price reductions, some of which are conditional upon achieving certain joint cost saving targets. In these instances, revenue is recognized based on the agreed-upon price at the time of shipment.

Sales incentives and allowances are recognized as a reduction to revenue at the time of the related sale. In addition, from time to time, Aptiv makes payments to customers in conjunction with ongoing and future business. These payments to customers are generally recognized as a reduction to revenue at the time of the commitment to make these payments.

Shipping and handling fees billed to customers are included in net sales, while costs of shipping and handling are included in cost of sales.

Aptiv collects and remits taxes assessed by different governmental authorities that are both imposed on and concurrent with a revenue-producing transaction between the Company and the Company’s customers. These taxes may include, but are not limited to, sales, use, value-added, and some excise taxes. Aptiv reports the collection of these taxes on a net basis (excluded from revenues).

Net income per share—Basic net income per share is computed by dividing net income attributable to Aptiv by the weighted–average number of ordinary shares outstanding during the period. Diluted net income per share reflects the weighted average dilutive impact of all potentially dilutive securities from the date of issuance and is computed using the treasury stock method by dividing net income attributable to Aptiv by the diluted weighted-average number of ordinary shares outstanding. Unless otherwise noted, share and per share amounts included in these notes are on a diluted basis. Refer to Note 15. Shareholders’ Equity and Net Income Per Share for additional information including the calculation of basic and diluted net income per share.

Research and development—Costs are incurred in connection with research and development programs that are expected to contribute to future earnings. Such costs are charged against income as incurred. Total research and development expenses, including engineering, net of customer reimbursements, were approximately $882 million, $788 million and $720 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Cash and cash equivalents—Cash and cash equivalents are defined as short-term, highly liquid investments with original maturities of three months or less.

Restricted cash—Restricted cash includes balances on deposit at financial institutions that have issued letters of credit in favor of Aptiv.

Accounts receivable—Aptiv enters into agreements to sell certain of its accounts receivable, primarily in Europe. Sales of receivables are accounted for in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 860, Transfers and Servicing ("ASC 860"). Agreements which result in true sales of the transferred receivables, as defined in ASC 860, which occur when receivables are transferred without recourse to the Company, are excluded from amounts reported in the consolidated balance sheets. Cash proceeds received from such sales are included in operating cash flows. Agreements that allow Aptiv to maintain effective control over the transferred receivables and which do not qualify as a sale, as defined in ASC 860, are accounted for as secured borrowings and recorded in the consolidated balance sheets within accounts receivable, net and short-term debt. The expenses associated with receivables factoring are recorded in the consolidated statements of operations within interest expense.

The Company exchanges certain amounts of accounts receivable, primarily in the Asia Pacific region, for bank notes with original maturities greater than three months. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions, which are operating in nature. Bank notes held by the Company with original maturities of three months or less are classified as cash and cash equivalents within the consolidated balance sheet, and those with original maturities of greater than three months are classified as notes receivable within other current assets. The Company may hold such bank notes until maturity, exchange them with suppliers to settle liabilities, or sell them to third party financial institutions in exchange for cash.

The allowance for doubtful accounts is established based upon analysis of trade receivables for known collectability issues, the aging of the trade receivables at the end of each period and, generally, all accounts receivable balances greater than 90 days past due are fully reserved. As of December 31, 2017 and 2016, the allowance for doubtful accounts was $34 million and $33 million, respectively, and the provision for doubtful accounts was $23 million, $22 million, and $6 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Inventories—As of December 31, 2017 and 2016, inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value, including direct material costs and direct and indirect manufacturing costs. Refer to Note 3. Inventories for additional information. Obsolete inventory is identified based on analysis of inventory for known obsolescence issues, and, generally, the market value of inventory on hand in excess of one year’s supply is fully-reserved.

From time to time, payments may be received from suppliers. These payments from suppliers are recognized as a reduction of the cost of the material acquired during the period to which the payments relate. In some instances, supplier rebates are received in conjunction with or concurrent with the negotiation of future purchase agreements and these amounts are amortized over the prospective agreement period.

Property—Major improvements that materially extend the useful life of property are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is determined based on a straight-line method over the estimated useful lives of groups of property. Leasehold improvements under capital leases are depreciated over the period of the lease or the life of the property, whichever is shorter. Refer to Note 6. Property, Net for additional information.

Pre-production costs related to long-term supply agreements—The Company incurs pre-production engineering, development and tooling costs related to products produced for its customers under long-term supply agreements. Engineering, testing and other costs incurred in the design and development of production parts are expensed as incurred, unless the costs are reimbursable, as specified in a customer contract. As of December 31, 2017 and 2016, $99 million and $73 million of such contractually reimbursable costs were capitalized, respectively. These amounts are recorded within other current and other long-term assets in the consolidated balance sheets, as further detailed in Note 4. Assets.

Special tools represent Aptiv-owned tools, dies, jigs and other items used in the manufacture of customer components that will be sold under long-term supply arrangements, the costs of which are capitalized within property, plant and equipment if the Company has title to the assets. Special tools also include capitalized unreimbursed pre-production tooling costs related to customer-owned tools for which the customer has provided Aptiv a non-cancellable right to use the tool. Aptiv-owned special tools balances are depreciated over the expected life of the special tool or the life of the related vehicle program, whichever is shorter. The unreimbursed costs incurred related to customer-owned special tools that are not subject to reimbursement are capitalized and depreciated over the expected life of the special tool or the life of the related vehicle program, whichever is shorter. At December 31, 2017 and 2016, the special tools balance, net of accumulated depreciation, was $445 million and $373 million, respectively, included within property, net in the consolidated balance sheets. As of December 31, 2017 and 2016, the Aptiv-owned special tools balances were $338 million and $303 million, respectively, and the customer-owned special tools balances were $107 million and $70 million, respectively.

Valuation of long-lived assets—The carrying value of long-lived assets held for use, including definite-lived intangible assets, is periodically evaluated when events or circumstances warrant such a review. The carrying value of a long-lived asset held for use is considered impaired when the anticipated separately identifiable undiscounted cash flows from the asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. Impairment losses on long-lived assets held for sale are recognized if the carrying value of the asset is in excess of the asset's estimated fair value, reduced for the cost to dispose of the asset. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved (an income approach), and in certain situations Aptiv’s review of appraisals (a market approach). Refer to Note 6. Property, Net for additional information.

Assets and liabilities held for sale—The Company considers assets to be held for sale when management approves and commits to a formal plan to actively market the assets for sale at a price reasonable in relation to their estimated fair value, the assets are available for immediate sale in their present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the assets is probable and expected to be completed within one year (or, if it is expected that others will impose conditions on the sale of the assets that will extend the period required to complete the sale, that a firm purchase commitment is probable within one year) and it is unlikely that significant changes will be made to the plan. Upon designation as held for sale, the Company records the assets at the lower of their carrying value or their estimated fair value, reduced for the cost to dispose of the assets, and ceases to record depreciation expense on the assets.

Assets and liabilities of a discontinued operation are reclassified for all comparative periods presented in the consolidated balance sheet. For assets that meet the held for sale criteria but do not meet the definition of a discontinued operation, the Company reclassifies the assets and liabilities in the period in which the held for sale criteria are met, but does not reclassify prior period amounts.

Refer to Note 25. Discontinued Operations for further information regarding the Company's assets and liabilities held for sale.

Intangible assets—The Company amortizes definite-lived intangible assets over their estimated useful lives. The Company has definite-lived intangible assets related to patents and developed technology, customer relationships and trade names. Indefinite-lived in-process research and development intangible assets are not amortized, but are tested for impairment annually, or more frequently when indicators of potential impairment exist, until the completion or abandonment of the associated research and development efforts. Upon completion of the projects, the assets will be amortized over the expected economic life of the asset, which will be determined on that date. Should the project be determined to be abandoned, and if the asset developed has no alternative use, the full value of the asset will be charged to expense. The Company also has intangible assets related to acquired trade names that are classified as indefinite-lived when there are no foreseeable limits on the periods of time over which they are expected to contribute cash flows. These indefinite-lived trade name assets are tested for impairment annually, or more frequently when indicators of potential impairment exist. Costs to renew or extend the term of acquired intangible assets are recognized as expense as incurred. No intangible asset impairments were recorded in 2017, 2016 or 2015. Refer to Note 7. Intangible Assets and Goodwill for additional information.

Goodwill—Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in business combinations. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently when indications of potential impairment exist. The Company monitors the existence of potential impairment indicators throughout the fiscal year. The Company tests for goodwill impairment at the reporting unit level. Our reporting units are the components of operating segments which constitute businesses for which discrete financial information is available and is regularly reviewed by segment management.

The impairment test involves first qualitatively assessing goodwill for impairment. If the qualitative assessment is not met the Company then performs a quantitative assessment by first comparing the estimated fair value of each reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of the reporting unit. If the estimated fair value exceeds carrying value, then we conclude that no goodwill impairment has occurred. If the carrying value of the reporting unit exceeds its estimated fair value, a second step is required to measure possible goodwill impairment loss. The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying value of that goodwill. If the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, The Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value. Refer to Note 20. Acquisitions and Divestitures, for further information on the goodwill attributable to the Company's acquisitions.

Goodwill impairment—In the fourth quarter of 2017, 2016 and 2015, the Company completed a qualitative goodwill impairment assessment, and after evaluating the results, events and circumstances of the Company, the Company concluded that sufficient evidence existed to assert qualitatively that it was more likely than not that the estimated fair value of each

reporting unit remained in excess of its carrying values. Therefore, a two-step impairment assessment was not necessary. No goodwill impairments were recorded in 2017, 2016 or 2015. Refer to Note 7. Intangible Assets and Goodwill for additional information.

Discontinued operations—The Company reports financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal of a component or a group of components of the Company represents a strategic shift that will have a major effect on the Company's operations and financial results. During the year ended December 31, 2017, the Company completed the Separation of its former Powertrain Systems segment by means of a spin-off into Delphi Technologies PLC, a new, independent, public company. During the year ended December 31, 2015, Aptiv completed the divestitures of the Company's wholly owned Thermal Systems business and the Company's interest in its KDAC joint venture. During the year ended December 31, 2016, Aptiv completed the divestiture of its interest in its Shanghai Delphi Automotive Air Conditioning ("SDAAC") joint venture. Aptiv's interests in the KDAC and SDAAC joint ventures were previously reported within the Thermal Systems segment. Accordingly, the assets and liabilities, operating results and operating and investing cash flows for the previously reported Powertrain Systems and Thermal Systems segments are presented as discontinued operations separate from the Company’s continuing operations and segment results for all periods presented in these consolidated financial statements and the notes to the consolidated financial statements, unless otherwise noted. Refer to Note 25. Discontinued Operations for further information regarding the Company's discontinued operations.

Warranty and product recalls—Expected warranty costs for products sold are recognized at the time of sale of the product based on an estimate of the amount that eventually will be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. Costs of product recalls, which may 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, are accrued as part of our warranty accrual at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Refer to Note 9. Warranty Obligations for additional information.

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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized. In the event the Company determines it is more likely than not that the deferred tax assets will not be realized in the future, the valuation allowance adjustment to the deferred tax assets will be charged to earnings in the period in which the Company makes such a determination. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities. Refer to Note. 14. Income Taxes for additional information.

Foreign currency translation—Assets and liabilities of non-U.S. subsidiaries that use a currency other than U.S. dollars as their functional currency are translated to U.S. dollars at end-of-period currency exchange rates. The consolidated statements of operations of non-U.S. subsidiaries are translated to U.S. dollars at average-period currency exchange rates. The effect of translation for non-U.S. subsidiaries is generally reported in other comprehensive income ("OCI"). The effect of remeasurement of assets and liabilities of non-U.S. subsidiaries that use the U.S. dollar as their functional currency is primarily included in cost of sales. Also included in cost of sales are gains and losses arising from transactions denominated in a currency other than the functional currency of a particular entity. Net foreign currency transaction (losses) gains of $(13) million, $11 million and $13 million were included in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015. The accumulated foreign currency translation adjustment related to an investment in a foreign subsidiary is reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.

Restructuring—Aptiv continually evaluates alternatives to align the business with the changing needs of its customers and to lower operating costs. This includes the realignment of its existing manufacturing capacity, facility closures, or similar actions, either in the normal course of business or pursuant to significant restructuring programs. These actions may result in employees receiving voluntary or involuntary employee termination benefits, which are mainly pursuant to union or other contractual agreements. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and when the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. Contract termination costs are recorded when contracts are terminated or when Aptiv ceases to use the leased facility and no longer derives economic benefit from the contract. All other exit costs are expensed as incurred. Refer to Note 10. Restructuring for additional information.

Environmental liabilities—Environmental remediation liabilities are recognized when a loss is probable and can be reasonably estimated. Such liabilities generally are not subject to insurance coverage. The cost of each environmental

remediation is estimated by engineering, financial, and legal specialists based on current law and considers the estimated cost of investigation and remediation required and the likelihood that, where applicable, other responsible parties will be able to fulfill their commitments. The process of estimating environmental remediation liabilities is complex and dependent primarily on the nature and extent of historical information and physical data relating to a contaminated site, the complexity of the site, the uncertainty as to what remediation and technology will be required, and the outcome of discussions with regulatory agencies and, if applicable, other responsible parties at multi-party sites. In future periods, new laws or regulations, advances in remediation technologies and additional information about the ultimate remediation methodology to be used could significantly change estimates by Aptiv. Refer to Note 13. Commitments and Contingencies for additional information.

Asset retirement obligations—Asset retirement obligations are recognized in accordance with FASB ASC 410, Asset Retirement and Environmental Obligations. Conditional retirement obligations have been identified primarily related to asbestos abatement at certain sites. To a lesser extent, conditional retirement obligations also exist at certain sites related to the removal of storage tanks and disposal costs. Asset retirement obligations were $1 million and $1 million at December 31, 2017 and 2016, respectively.

Customer concentrations—As reflected in the table below, net sales to GM and VW, Aptiv's two largest customers, totaled approximately 22%, 25% and 29% of our total net sales for the years ended December 31, 2017, 2016 and 2015, respectively.

	Percentage of Total Net Sales										Accounts and Other Receivables
	Year Ended December 31,										December 31, 2017				December 31, 2016
	2017			2016			2015
											(in millions)
GM (1)	13	%		16	%		19	%			$	204			$	291
VW	9	%		9	%		10	%			145				126

(1)	Net sales to GM includes net sales to GM's former European Opel business prior to its sale to PSA on August 1, 2017, after which date these sales are included in net sales to PSA.

Derivative financial instruments—All derivative instruments are required to be reported on the balance sheet at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria.

Exposure to fluctuations in currency exchange rates, interest rates and certain commodity prices are managed by entering into a variety of forward and option contracts and swaps with various counterparties. Such financial exposures are managed in accordance with the policies and procedures of Aptiv. Aptiv does not enter into derivative transactions for speculative or trading purposes. As part of the hedging program approval process, Aptiv identifies the specific financial risk which the derivative transaction will minimize, the appropriate hedging instrument to be used to reduce the risk and the correlation between the financial risk and the hedging instrument. Purchase orders, sales contracts, letters of intent, capital planning forecasts and historical data are used as the basis for determining the anticipated values of the transactions to be hedged. Aptiv does not enter into derivative transactions that do not have a high correlation with the underlying financial risk. Hedge positions, as well as the correlation between the transaction risks and the hedging instruments, are reviewed on an ongoing basis.

Foreign exchange forward contracts are accounted for as hedges of firm or forecasted foreign currency commitments or foreign currency exposure of the net investment in certain foreign operations to the extent they are designated and assessed as highly effective. All foreign exchange contracts are marked to market on a current basis. Commodity swaps are accounted for as hedges of firm or anticipated commodity purchase contracts to the extent they are designated and assessed as effective. All other commodity derivative contracts that are not designated as hedges are either marked to market on a current basis or are exempted from mark to market accounting as normal purchases. At December 31, 2017 and 2016, the Company's exposure to movements in interest rates was not hedged with derivative instruments. Refer to Note 17. Derivatives and Hedging Activities and Note 18. Fair Value of Financial Instruments for additional information.

Extended disability benefits—Costs associated with extended disability benefits provided to inactive employees are accrued throughout the duration of their active employment. Workforce demographic data and historical experience are utilized to develop projections of time frames and related expense for postemployment benefits.

Workers’ compensation benefits—Workers’ compensation benefit accruals are actuarially determined and are subject to the existing workers’ compensation laws that vary by location. Accruals for workers’ compensation benefits represent the discounted future cash expenditures expected during the period between the incidents necessitating the employees to be idled and the time when such employees return to work, are eligible for retirement or otherwise terminate their employment.

Share-based compensation—The Company's share-based compensation arrangements consist of the Aptiv PLC Long Term Incentive Plan, as amended and restated effective April 23, 2015 (the “PLC LTIP”), under which grants of restricted stock units (“RSUs”) have been made in each period from 2012 to 2017. The RSU awards include a time-based vesting portion and a performance-based vesting portion. The performance-based vesting portion includes performance and market conditions in addition to service conditions. The grant date fair value of the RSUs is determined based on the closing price of the Company's ordinary shares on the date of the grant of the award, including an estimate for forfeitures, or a contemporaneous valuation performed by an independent valuation specialist with respect to awards with market conditions. Compensation expense is recognized based upon the grant date fair value of the awards applied to the Company's best estimate of ultimate performance against the respective targets on a straight-line basis over the requisite vesting period of the awards. The performance conditions require management to make assumptions regarding the likelihood of achieving certain performance goals. Changes in these performance assumptions, as well as differences in actual results from management's estimates, could result in estimated or actual values different from previously estimated fair values. Refer to Note 21. Share-Based Compensation for additional information.

Business combinations—The Company accounts for its business combinations in accordance with the accounting guidance in FASB ASC 805, Business Combinations. The purchase price of an acquired business is allocated 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. Determining the fair values of assets acquired and liabilities assumed requires management's judgment, the utilization of independent appraisal firms and often involves the use of significant estimates and assumptions with respect to the timing and amount of future cash flows, market rate assumptions, actuarial assumptions, and appropriate discount rates, among other items. Refer to Note 20. Acquisitions and Divestitures for additional information.

Retrospective changes—Following the completion of the Separation of the Company's Powertrain Systems business by means of a spin-off on December 4, 2017, the former Powertrain Systems segment has been classified as a discontinued operation. Prior period information has been reclassified to present this business as a discontinued operation for all periods presented, and has therefore been excluded from both continuing operations and segment results for all periods presented in these consolidated financial statements and the notes to the consolidated financial statements, unless otherwise noted. Refer to Note 25. Discontinued Operations for further information regarding the Company's discontinued operations.

Recently adopted accounting pronouncements—Aptiv adopted ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, in the first quarter of 2017 on a prospective basis. This guidance requires an entity to measure inventory at the lower of cost and net realizable value, rather than at the lower of cost or market. The adoption of this guidance did not have a significant impact on Aptiv's financial statements.

Aptiv adopted ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships and ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments in the first quarter of 2017 on a prospective basis. ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as a hedging instrument does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. ASU 2016-06 also clarifies the steps required to determine bifurcation of an embedded derivative. The adoption of this guidance did not have a significant impact on Aptiv's financial statements.

Aptiv adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09") in the first quarter of 2017. This guidance contains multiple updates related to the accounting and financial statement presentation of share-based payment transactions. The provisions of ASU 2016-09 related to the timing of when excess tax benefits are recognized were adopted using a modified retrospective transition method by means of an immaterial cumulative-effect adjustment to equity as of January 1, 2017. On a prospective basis, excess tax benefits are recognized within income tax expense in the period in which the awards vest, as opposed to being recognized in additional paid-in capital when the deduction reduced taxes payable. Such excess tax benefits are classified as an operating activity within the consolidated statement of cash flows prospectively, as opposed to a financing activity. There was no change to the Company's historical presentation of minimum statutory withholdings as a financing activity within the consolidated statement of cash flows. The Company’s share-based compensation expense continues to reflect estimated forfeitures. The adoption of ASU 2016-09 did not materially impact the Company’s financial position, results of operations, equity or cash flows.

Aptiv adopted ASU 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost ("ASU 2017-07") in the first quarter of 2017. ASU 2017-07 changes the presentation of net periodic pension and postretirement benefit cost in the income statement. Under the new guidance, employers present the service cost component of the net periodic benefit cost in the same income statement line items as other employee compensation costs for services rendered during the period. In addition, only the service cost component is eligible for capitalization as an asset. Employers present the other components of net periodic benefit cost separately from the income statement line items that include the service cost component, outside of operating income. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early

adoption is permitted as of the beginning of an annual period. The new guidance related to the presentation of the components of net periodic benefit cost within the income statement is to be applied retrospectively. The new guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component will be applied prospectively. As permitted, the Company elected to early adopt this guidance effective January 1, 2017, and has classified the components of net periodic pension and postretirement benefit cost other than service costs from cost of goods sold and selling, general and administrative expense to other expense within the consolidated statement of operations for all periods presented. The adoption of this guidance resulted in the reclassification of $18 million and $26 million of net periodic benefit cost components other than service cost from operating expense to other expense for the years ended December 31, 2016 and 2015, respectively, and had no impact on net income attributable to Aptiv. Refer to Note 12. Pension Benefits for further detail of the components of net periodic benefit costs.

Recently issued accounting pronouncements not yet adopted—In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU supersedes most of the existing guidance on revenue recognition in ASC Topic 605, Revenue Recognition and establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. The FASB has subsequently issued additional ASUs to clarify certain elements of the new revenue recognition guidance. The guidance is effective for fiscal years beginning after December 15, 2017, and is to be applied retrospectively using one of two transition methods at the entity's election. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application.

The Company has continued to monitor FASB activity related to the new standard, and has worked with various non-authoritative industry groups to assess certain interpretative issues and the associated implementation of the new standard. The Company has drafted its accounting policy for the new standard based on a detailed review of its business and contracts. While the Company continues to assess all potential impacts of the new standard, we do not currently expect that the adoption of the new revenue standard will have a material impact on our revenues, results of operations or financial position. As a result of the adoption of this standard, the Company expects to make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new standard. The Company plans to adopt the new revenue standard effective January 1, 2018. The Company currently intends to adopt the new standard using the modified retrospective method, and continues to evaluate the effect of the standard on our ongoing financial reporting.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance makes targeted improvements to existing U.S. GAAP for financial instruments, including requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income as opposed to other comprehensive income; requiring entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requiring entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Early adoption of the own credit provision is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements; however, based on the nature of financial instruments held by Aptiv as of December 31, 2017, the Company does not currently expect that the adoption of ASU 2016-01 will have a material impact on its financial position, results of operations or cash flows. The Company will continue to evaluate any changes in its investments or market conditions, and the related potential impacts of the adoption of ASU 2016-01.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, lessees will be required to recognize on the balance sheet a lease liability and a right-of-use asset for all leases, with the exception of short-term leases. The lease liability represents the lessee's obligation to make lease payments arising from a lease, and will be measured as the present value of the lease payments. The right-of-use asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard also requires a lessee to recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The new guidance is effective for fiscal years beginning after December 15, 2018. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and

provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the effects that the adoption of ASU 2016-02 will have on the Company’s consolidated financial statements, and anticipates the new guidance will significantly impact its consolidated financial statements as the Company has a significant number of leases. As further described in Note 13. Commitments and Contingencies, as of December 31, 2017, Aptiv had minimum lease commitments under non-cancellable operating leases totaling $447 million.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This guidance requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This guidance also requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses. The new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

In September 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This guidance clarifies the presentation requirements of eight specific issues within the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on Aptiv's financial statements, as Aptiv's treatment of the relevant affected items within its consolidated statement of cash flows is consistent with the requirements of this guidance.

In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. This guidance requires that the tax effects of all intra-entity sales of assets other than inventory be recognized in the period in which the transaction occurs. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption as of the beginning of an annual reporting period is permitted. The guidance is to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. The adoption of this guidance is not expected to have a significant impact on Aptiv's financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. As a result, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, and the new guidance is to be applied retrospectively. The adoption of this guidance is not expected to have a significant impact on Aptiv's financial statements, other than the classification of restricted cash within the beginning-of-period and end-of-period totals on the consolidated statement of cash flows, as opposed to being excluded from these totals.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This guidance simplifies how an entity is required to test goodwill for impairment by eliminating step two from the goodwill impairment test, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its financial statements, but does not anticipate a material impact. As this standard is prospective in nature, the impact to Aptiv's financial statements of not performing a step two in order to measure the amount of any potential goodwill impairment will depend on various factors associated with the Company's assessment of goodwill for impairment in those future periods.

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities, which expands and refines the application of hedge accounting for both non-financial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

3. INVENTORIES

Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value, including direct material costs and direct and indirect manufacturing costs. A summary of inventories is shown below:

	December 31, 2017				December 31, 2016
	(in millions)
Productive material	$	584			$	491
Work-in-process	100				72
Finished goods	399				296
Total	$	1,083			$	859

4. ASSETS

Other current assets consisted of the following:

	December 31, 2017				December 31, 2016
	(in millions)
Value added tax receivable	$	160			$	144
Prepaid insurance and other expenses	104				62
Reimbursable engineering costs	33				47
Notes receivable	16				7
Income and other taxes receivable	46				25
Deposits to vendors	8				5
Derivative financial instruments (Note 17)	30				11
Accounts receivable to be remitted to Delphi Technologies (Note 25)	123				—
Other	1				1
Total	$	521			$	302

Other long-term assets consisted of the following:

	December 31, 2017				December 31, 2016
	(in millions)
Deferred income taxes (Note 14)	$	185			$	130
Unamortized Revolving Credit Facility debt issuance costs (Note 11)	8				10
Income and other taxes receivable	22				30
Reimbursable engineering costs	66				26
Value added tax receivable	37				33
Cost method investments (Note 5)	56				6
Derivative financial instruments (Note 17)	8				8
Other	88				37
Total	$	470			$	280

5. INVESTMENTS IN AFFILIATES

As part of Aptiv's continuing operations, it has investments in five non-consolidated affiliates accounted for under the equity method of accounting. These affiliates are not publicly traded companies and are located primarily in Asia Pacific and North America. Aptiv’s ownership percentages vary generally from approximately 20% to 50%, with the most significant investment in Promotora de Partes Electricas Automotrices, S.A. de C.V. (of which Aptiv owns approximately 40%). The aggregate investment in non-consolidated affiliates was $91 million and $67 million at December 31, 2017 and 2016, respectively. Dividends of $15 million, $17 million and $17 million for the years ended December 31, 2017, 2016 and 2015, respectively, have been received from non-consolidated affiliates. No impairment charges were recorded for the years ended December 31, 2017, 2016 and 2015.

The following is a summary of the combined financial information of significant affiliates accounted for under the equity method for continuing operations as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 (unaudited):

	December 31,
	2017				2016
	(in millions)
Current assets	$	222			$	195
Non-current assets	108				96
Total assets	$	330			$	291
Current liabilities	$	114			$	124
Non-current liabilities	4				4
Shareholders’ equity	212				163
Total liabilities and shareholders’ equity	$	330			$	291

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Net sales	$	570			$	521			$	440
Gross profit	111				105				84
Net income	66				77				39

A summary of transactions with affiliates is shown below:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Sales to affiliates	$	8			$	14			$	25
Purchases from affiliates	19				23				44

Technology Investments

The Company has made technology investments in certain non-consolidated affiliates for ownership interests of less than 20%, which are accounted for under the cost method.

During the third quarter of 2017, the Company's Advanced Safety and User Experience segment made investments in two leading developers of Light Detection and Ranging (“LIDAR”) technology, a $15 million investment in Innoviz Technologies and a $10 million investment in LeddarTech, Inc.

During the second quarter of 2017, the Company's Signal and Power Solutions segment made a $10 million investment in Valens Semiconductor Ltd., a leading provider of signal processing technology for high frequency data transmission of connected car content. During the first quarter of 2017, the Company's Advanced Safety and User Experience segment made a $15 million investment in Otonomo Technologies Ltd., the developer of a connected car data marketplace.

As of December 31, 2017, the Company had the following technology investments, which are classified within other long-term assets in the consolidated balance sheet:

Investment Name	Segment	Investment Date		Investment (in millions)
Innoviz Technologies	Advanced Safety and User Experience	Q3 2017		$	15
LeddarTech, Inc.	Advanced Safety and User Experience	Q3 2017		10
Valens Semiconductor Ltd.	Signal and Power Solutions	Q2 2017		10
Otonomo Technologies Ltd.	Advanced Safety and User Experience	Q1 2017		15
Quanergy Systems, Inc	Advanced Safety and User Experience	Q2 2015; Q1 2016		6
				$	56

6. PROPERTY, NET

Property, net consisted of:

	Estimated Useful Lives		December 31,
	2017				2016
	(Years)		(in millions)
Land	—		$	63			$	54
Land and leasehold improvements	3-20		134				143
Buildings	40		505				436
Machinery, equipment and tooling	3-20		3,077				2,486
Furniture and office equipment	3-10		493				375
Construction in progress	—		330				251
Total			4,602				3,745
Less: accumulated depreciation			(1,798		)		(1,420		)
Total property, net			$	2,804			$	2,325

For the years ended December 31, 2017, 2016 and 2015, Aptiv recorded non-cash asset impairment charges of $9 million, $1 million and $7 million, respectively, in cost of sales related to declines in the fair values of certain fixed assets.

7. INTANGIBLE ASSETS AND GOODWILL

The changes in the carrying amount of intangible assets and goodwill were as follows as of December 31, 2017 and 2016. See Note 20. Acquisitions and Divestitures for a further description of the goodwill and intangible assets resulting from Aptiv's acquisitions in 2017 and 2016.

			As of December 31, 2017												As of December 31, 2016
	Estimated Useful Lives		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount				Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
	(Years)		(in millions)												(in millions)
Amortized intangible assets:
Patents and developed technology	7-15		$	639			$	324			$	315			$	602			$	255			$	347
Customer relationships	5-14		798				219				579				730				126				604
Trade names	5-25		68				25				43				56				19				37
Total			1,505				568				937				1,388				400				988
Unamortized intangible assets:
In-process research and development	—		147				—				147				34				—				34
Trade names	—		135				—				135				126				—				126
Goodwill	—		1,944				—				1,944				1,502				—				1,502
Total			$	3,731			$	568			$	3,163			$	3,050			$	400			$	2,650

Estimated amortization expense for the years ending December 31, 2018 through 2022 is presented below:

	Year Ending December 31,
	2018				2019				2020				2021				2022
	(in millions)
Estimated amortization expense	$	117			$	110			$	110			$	109			$	102

A roll-forward of the gross carrying amounts of intangible assets for the years ended December 31, 2017 and 2016 is presented below.

	2017				2016
	(in millions)
Balance at January 1	$	3,050			$	3,085
Acquisitions (1)	398				25
Foreign currency translation and other	283				(60		)
Balance at December 31	$	3,731			$	3,050

(1)	Primarily attributable to the 2017 acquisitions of Movimento Group and nuTonomy, Inc., and the 2016 acquisition of PureDepth, Inc, as further described in Note 20. Acquisitions and Divestitures.

A roll-forward of the accumulated amortization for the years ended December 31, 2017 and 2016 is presented below:

	2017				2016
	(in millions)
Balance at January 1	$	400			$	283
Amortization	117				117
Foreign currency translation and other	51				—
Balance at December 31	$	568			$	400

A roll-forward of the carrying amount of goodwill, by operating segment, for the years ended December 31, 2017 and 2016 is presented below:

	Signal and Power Solutions				Advanced Safety and User Experience				Total
	(in millions)
Balance at January 1, 2016	$	1,458			$	73			$	1,531
Acquisitions (1)	10				5				15
Foreign currency translation and other	(44		)		—				(44		)
Balance at December 31, 2016	$	1,424			$	78			$	1,502
Acquisitions (2)	$	—			$	274			$	274
Foreign currency translation and other	170				(2		)		168
Balance at December 31, 2017	$	1,594			$	350			$	1,944

(1)	Primarily attributable to measurement period adjustments related to the 2015 acquisition of HellermannTyton Group PLC and the acquisition of PureDepth Inc., as further described in Note 20. Acquisitions and Divestitures.

(2)	Primarily attributable to the acquisitions of nuTonomy, Inc. and Movimento Group, as further described in Note 20. Acquisitions and Divestitures.

8. LIABILITIES

Accrued liabilities consisted of the following:

	December 31, 2017				December 31, 2016
	(in millions)
Payroll-related obligations	$	218			$	194
Employee benefits, including current pension obligations	116				78
Reserve for Unsecured Creditors litigation (Note 13)	—				300
Income and other taxes payable	233				149
Warranty obligations (Note 9)	41				51
Restructuring (Note 10)	90				91
Customer deposits	28				22
Derivative financial instruments (Note 17)	15				45
Accrued interest	41				40
Dividends payable	59				—
Accounts payable to be remitted on behalf of Delphi Technologies (Note 25)	132				—
Other	323				272
Total	$	1,296			$	1,242

Other long-term liabilities consisted of the following:

	December 31, 2017				December 31, 2016
	(in millions)
Environmental (Note 13)	$	4			$	4
Extended disability benefits	9				8
Warranty obligations (Note 9)	17				14
Restructuring (Note 10)	42				24
Payroll-related obligations	10				9
Accrued income taxes	154				125
Deferred income taxes (Note 14)	222				143
Derivative financial instruments (Note 17)	11				11
Other	57				33
Total	$	526			$	371

9. WARRANTY OBLIGATIONS

Expected warranty costs for products sold are recognized principally at the time of sale of the product based on an estimate of the amount that will eventually be required to settle such obligations. These accruals are based on factors such as past experience, production changes, industry developments and various other considerations. The estimated costs related to product recalls based on a formal campaign soliciting return of that product are accrued at the time an obligation becomes probable and can be reasonably estimated. These estimates are adjusted from time to time based on facts and circumstances that impact the status of existing claims. Aptiv has recognized its best estimate for its total aggregate warranty reserves, including product recall costs, across all of its operating segments as of December 31, 2017. The Company estimates the reasonably possible amount to ultimately resolve all matters in excess of the recorded reserves as of December 31, 2017 to be zero to $25 million.

The table below summarizes the activity in the product warranty liability for the years ended December 31, 2017 and 2016:

	Year Ended December 31,
	2017				2016
	(in millions)
Accrual balance at beginning of year	$	65			$	31
Provision for estimated warranties incurred during the year	47				49
Changes in estimate for pre-existing warranties	45				13
Settlements made during the year (in cash or in kind)	(103		)		(25		)
Foreign currency translation and other	4				(3		)
Accrual balance at end of year	$	58			$	65

In September 2016, one of the Company's OEM customers initiated a recall to enhance airbag deployment systems in certain vehicles. Aptiv's Advanced Safety and User Experience segment had supplied sensors and related control modules for the airbags in the affected vehicles. During the first quarter of 2017, Aptiv reached an agreement with its customer related to this matter. In addition to the Company's previously recorded reserve estimate, Aptiv recognized an incremental $43 million of warranty expense within cost of sales during the year ended December 31, 2017 related to this matter.

10. RESTRUCTURING

Aptiv’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing Aptiv’s strategy, either in the normal course of business or pursuant to significant restructuring programs.

As part of Aptiv's continued efforts to optimize its cost structure, it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs, including programs implemented to realign the Company's organizational structure due to changes in roles and workforce as a result of the spin-off of the former Powertrain Systems segment. The Company recorded employee-related and other restructuring charges related to these programs totaling approximately $129 million during the year ended December 31, 2017, of which $89 million was recognized for programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe. The charges recorded during the the year ended December 31, 2017 included the recognition of approximately $36 million of employee-related and other costs related to the initiation of a program to close a Western European Advanced Safety and User Experience manufacturing site, pursuant to the Company's on-going European footprint rotation strategy. Cash payments for this restructuring action are expected to be principally completed by 2019.

During the year ended December 31, 2016, Aptiv recorded employee-related and other restructuring charges totaling approximately $167 million, primarily focused on the continued rotation of our manufacturing footprint to best cost locations in Europe and on reducing global overhead costs. These charges included $91 million for programs implemented to reduce global overhead costs, as well as $39 million for programs focused on the continued rotation of our manufacturing footprint to best cost locations in Europe. During the year ended December 31, 2015, the Company recorded employee-related and other restructuring charges totaling approximately $65 million, primarily related to on-going restructuring programs focused on aligning manufacturing capacity with the levels of automotive production in Europe and South America, and the continued rotation of our manufacturing footprint to low cost locations within these regions.

Additionally, the Company recorded $90 million, $161 million and $115 million of restructuring costs within discontinued operations, primarily related to the Powertrain Systems business, during the years ended December 31, 2017, 2016 and 2015, respectively. These amounts were primarily incurred related to the Company's on-going European footprint rotation strategy, and included charges for the closures of European manufacturing sites in each year, which totaled $54 million, $93 million and $68 million during the years ended December 31, 2017, 2016 and 2015, respectively.

Restructuring charges for employee separation and termination benefits are paid either over the severance period or in a lump sum in accordance with either statutory requirements or individual agreements. Aptiv incurred cash expenditures related to its restructuring programs of approximately $127 million and $90 million in the years ended December 31, 2017 and December 31, 2016, respectively.

The following table summarizes the restructuring charges recorded for the years ended December 31, 2017, 2016 and 2015 by operating segment:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Signal and Power Solutions	$	67			$	125			$	39
Advanced Safety and User Experience	62				42				26
Total	$	129			$	167			$	65

The table below summarizes the activity in the restructuring liability for the years ended December 31, 2017 and 2016:

	Employee Termination Benefits Liability				Other Exit Costs Liability				Total
	(in millions)
Accrual balance at January 1, 2016	$	37			$	—			$	37
Provision for estimated expenses incurred during the year	166				1				167
Payments made during the year	(90		)		—				(90		)
Foreign currency and other	1				—				1
Accrual balance at December 31, 2016	$	114			$	1			$	115
Provision for estimated expenses incurred during the year	$	129			$	—			$	129
Payments made during the year	(127		)		—				(127		)
Foreign currency and other	15				—				15
Accrual balance at December 31, 2017	$	131			$	1			$	132

11. DEBT

The following is a summary of debt outstanding, net of unamortized issuance costs and discounts, as of December 31, 2017 and December 31, 2016, respectively:

	December 31,
	2017				2016
	(in millions)
3.15%, senior notes, due 2020 (net of $2 and $3 unamortized issuance costs and $1 and $1 discount, respectively)	$	647			$	646
4.15%, senior notes, due 2024 (net of $4 and $4 unamortized issuance costs and $1 and $2 discount, respectively)	695				694
1.50%, Euro-denominated senior notes, due 2025 (net of $4 and $4 unamortized issuance costs and $3 and $3 discount, respectively)	833				729
4.25%, senior notes, due 2026 (net of $4 and $4 unamortized issuance costs, respectively)	646				646
1.60%, Euro-denominated senior notes, due 2028 (net of $4 and $4 unamortized issuance costs and $1 and $1 discount, respectively)	595				521
4.40%, senior notes, due 2046 (net of $3 and $3 unamortized issuance costs and $2 and $2 discount, respectively)	295				295
Tranche A Term Loan, due 2021 (net of $2 and $2 unamortized issuance costs, respectively)	396				398
Capital leases and other	42				34
Total debt	4,149				3,963
Less: current portion	(17		)		(10		)
Long-term debt	$	4,132			$	3,953

The principal maturities of debt, at nominal value, follows:

	Debt and Capital Lease Obligations
	(in millions)
2018	$	17
2019	32
2020	683
2021	333
2022	3
Thereafter	3,112
Total	$	4,180

Credit Agreement

Aptiv PLC and its wholly-owned subsidiary Delphi Corporation entered into a credit agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., as administrative agent (the "Administrative Agent"), under which it maintains senior secured credit facilities currently consisting of a term loan (the “Tranche A Term Loan”) and a revolving credit facility of $2.0 billion (the “Revolving Credit Facility”). The Credit Agreement was entered into in March 2011 and has been subsequently amended and restated on several occasions, most recently on August 17, 2016. The 2016 amendment extended the maturity of the Revolving Credit Facility and the Tranche A Term Loan from 2018 to 2021, increased the capacity of the Revolving Credit Facility from $1.5 billion to $2.0 billion and permitted Aptiv PLC to act as a borrower on the Revolving Credit Facility. A loss on debt extinguishment of $3 million was recorded within other income (expense), net in the consolidated statement of operations during the year ended December 31, 2016 in conjunction with the 2016 amendment.

The Tranche A Term Loan and the Revolving Credit Facility mature on August 17, 2021. Aptiv is obligated to make quarterly principal payments, beginning December 31, 2017, throughout the term of the Tranche A Term Loan according to the amortization schedule in the Credit Agreement. 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 (or

a greater amount based upon a formula set forth in the Credit Agreement) upon Aptiv's request, the agreement of the lenders participating in the increase, and the approval of the Administrative Agent and existing lenders.

As of December 31, 2017, there were no amounts drawn on the Revolving Credit Facility and approximately $7 million in letters of credit issued under the Credit Agreement. Letters of credit issued under the Credit Agreement reduce availability under the Revolving Credit Facility.

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) the London Interbank Offered Rate (the “Adjusted LIBO Rate” as defined in the Credit Agreement) (“LIBOR”) plus in either case a percentage per annum as set forth in the table below (the “Applicable Rate”). The Applicable Rates under the Credit Agreement on the specified dates are set forth below:

	December 31, 2017						December 31, 2016
	LIBOR plus			ABR plus			LIBOR plus			ABR plus
Revolving Credit Facility	1.10	%		0.10	%		1.10	%		0.10	%
Tranche A Term Loan	1.25	%		0.25	%		1.25	%		0.25	%

The Applicable Rate under the Credit Agreement may increase or decrease from time to time based on changes in the Company's credit ratings. Accordingly, the interest rate will fluctuate during the term of the Credit Agreement based on changes in the ABR, LIBOR or future changes in the Company's corporate credit ratings. The Credit Agreement also requires that Aptiv pay certain facility fees on the Revolving Credit Facility and certain letter of credit issuance and fronting fees.

The interest rate period with respect to LIBOR interest rate options can be set at one-, two-, three-, or six-months as selected by Aptiv in accordance with the terms of the 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 Credit Agreement. As of December 31, 2017, Aptiv selected the one-month LIBOR interest rate option on the Tranche A Term Loan, and the rate effective as of December 31, 2017, as detailed in the table below, was based on the Company's current credit rating and the Applicable Rate for the Credit Agreement:

			Borrowings as of
			December 31, 2017				Rates effective as of
	Applicable Rate		(in millions)				December 31, 2017
Tranche A Term Loan	LIBOR plus 1.25%		$	398			2.75	%

Borrowings under the Credit Agreement are prepayable at Aptiv's option without premium or penalty.

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 less than 3.50 to 1.0. 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, 2017.

As of December 31, 2017, all obligations under the Credit Agreement were borrowed by Delphi Corporation and jointly and severally guaranteed by its direct and indirect parent companies, subject to certain exceptions set forth in the Credit Agreement. Refer to Note 22. Supplemental Guarantor and Non-Guarantor Condensed Consolidating Financial Statements for additional information.

Senior Unsecured Notes

On May 17, 2011, Delphi Corporation issued $500 million of 5.875% senior unsecured notes due 2019 (the "5.875% Senior Notes") and $500 million of 6.125% senior unsecured notes due 2021 (the "6.125% Senior Notes") (collectively, the “2011 Senior Notes”) in a transaction exempt from registration under Rule 144A and Regulation S of the Securities Act of 1933 (the “Securities Act”). The net proceeds of approximately $1 billion as well as cash on hand were used to pay down amounts outstanding under the Credit Agreement. In May 2012, Delphi Corporation completed a registered exchange offer for all of the 2011 Senior Notes. No proceeds were received by Delphi Corporation as a result of the exchange. In March 2014, Aptiv redeemed for cash the entire $500 million aggregate principal amount outstanding of the 5.875% Senior Notes, financed by a portion of the proceeds received from the issuance of the 2014 Senior Notes, as defined below. In March 2015, Aptiv redeemed for cash the entire $500 million aggregate principal amount outstanding of the 6.125% Senior Notes, financed by a portion of the proceeds from the issuance of the 2015 Euro-denominated Senior Notes, as defined below. As a result of the redemption of

the 2011 Senior Notes, Aptiv recognized losses on debt extinguishment of approximately $52 million during the year ended December 31, 2015 and $33 million during the year ended December 31, 2014.

On February 14, 2013, Delphi Corporation issued $800 million of 5.00% senior unsecured notes due 2023 (the “2013 Senior Notes”) in a transaction registered under Rule 144A and Regulation S of the Securities Act of 1933 (the "Securities Act"). The proceeds were primarily utilized to prepay our term loan indebtedness under the Credit Agreement. Aptiv paid approximately $12 million of issuance costs in connection with the 2013 Senior Notes. Interest was payable semi-annually on February 15 and August 15 of each year to holders of record at the close of business on February 1 or August 1 immediately preceding the interest payment date. In September 2016, Aptiv redeemed for cash the entire $800 million aggregate principal amount outstanding of the 2013 Senior Notes, primarily financed by the proceeds from the issuance of the 2016 Euro-denominated Senior Notes and the 2016 Senior Notes, each as defined below. As a result of the redemption of the 2013 Senior Notes, Aptiv recognized a loss on debt extinguishment of approximately $70 million during the year ended December 31, 2016 within other income (expense), net in the consolidated statement of operations.

On March 3, 2014, Delphi Corporation issued $700 million in aggregate principal amount of 4.15% senior unsecured notes due 2024 (the "2014 Senior Notes") in a transaction registered under the Securities Act. The 2014 Senior Notes were priced at 99.649% of par, resulting in a yield to maturity of 4.193%. The proceeds were primarily utilized to redeem $500 million of 5.875% senior unsecured notes due 2019 and to repay a portion of the Tranche A Term Loan. Aptiv paid approximately $6 million of issuance costs in connection with the 2014 Senior Notes. Interest is payable semi-annually on March 15 and September 15 of each year to holders of record at the close of business on March 1 or September 1 immediately preceding the interest payment date.

On March 10, 2015, Aptiv PLC issued €700 million in aggregate principal amount of 1.50% Euro-denominated senior unsecured notes due 2025 (the “2015 Euro-denominated Senior Notes”) in a transaction registered under the Securities Act. The 2015 Euro-denominated Senior Notes were priced at 99.54% of par, resulting in a yield to maturity of 1.55%. The proceeds were primarily utilized to redeem the 6.125% Senior Notes, and to fund growth initiatives, such as acquisitions, and share repurchases. Aptiv incurred approximately $5 million of issuance costs in connection with the 2015 Euro-denominated Senior Notes. Interest is payable annually on March 10. The Company has designated the 2015 Euro-denominated Senior Notes as a net investment hedge of the foreign currency exposure of its investments in certain Euro-denominated wholly owned subsidiaries. Refer to Note 17. Derivatives and Hedging Activities for further information.

On November 19, 2015, Aptiv PLC issued $1.3 billion in aggregate principal amount of senior unsecured notes in a transaction registered under the Securities Act, comprised of $650 million of 3.15% senior unsecured notes due 2020 (the "3.15% Senior Notes") and $650 million of 4.25% senior unsecured notes due 2026 (the "4.25% Senior Notes") (collectively, the “2015 Senior Notes”). The 3.15% Senior Notes were priced at 99.784% of par, resulting in a yield to maturity of 3.197%, and the 4.25% Senior Notes were priced at 99.942% of par, resulting in a yield to maturity of 4.256%. The proceeds were primarily utilized to fund a portion of the cash consideration for the acquisition of HellermannTyton, as further described in Note. 20. Acquisitions and Divestitures, and for general corporate purposes, including the payment of fees and expenses associated with the HellermannTyton acquisition and the related financing transaction. Aptiv incurred approximately $8 million of issuance costs in connection with the 2015 Senior Notes. Interest on the 3.15% Senior Notes is payable semi-annually on May 19 and November 19 of each year to holders of record at the close of business on May 4 or November 4 immediately preceding the interest payment date. Interest on the 4.25% Senior Notes is payable semi-annually on January 15 and July 15 of each year to holders of record at the close of business on January 1 or July 1 immediately preceding the interest payment date.

On September 15, 2016, Aptiv PLC issued €500 million in aggregate principal amount of 1.60% Euro-denominated senior unsecured notes due 2028 (the “2016 Euro-denominated Senior Notes”) in a transaction registered under the Securities Act. The 2016 Euro-denominated Senior Notes were priced at 99.881% of par, resulting in a yield to maturity of 1.611%. The proceeds, together with proceeds from the 2016 Senior Notes described below, were utilized to redeem the 2013 Senior Notes. Aptiv incurred approximately $4 million of issuance costs in connection with the 2016 Euro-denominated Senior Notes. Interest is payable annually on September 15. The Company has designated the 2016 Euro-denominated Senior Notes as a net investment hedge of the foreign currency exposure of its investments in certain Euro-denominated wholly-owned subsidiaries. Refer to Note. 17. Derivatives and Hedging Activities for further information.

On September 20, 2016, Aptiv PLC issued $300 million in aggregate principal amount of 4.40% senior unsecured notes due 2046 (the “2016 Senior Notes”) in a transaction registered under the Securities Act. The 2016 Senior Notes were priced at 99.454% of par, resulting in a yield to maturity of 4.433%. The proceeds, together with proceeds from the 2016 Euro-denominated Senior Notes, were utilized to redeem the 2013 Senior Notes. Aptiv incurred approximately $3 million of issuance costs in connection with the 2016 Senior Notes. Interest is payable semi-annually on April 1 and October 1 of each year to holders of record at the close of business on March 15 or September 15 immediately preceding the interest payment date.

Although the specific terms of each indenture governing each series of senior notes vary, the 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, 2017, the Company was in compliance with the provisions of all series of the outstanding senior notes.

The 2013 Senior Notes and the 2014 Senior Notes were issued by Delphi Corporation. The 2014 Senior Notes are, and prior to their redemption, the 2013 Senior Notes were, fully and unconditionally guaranteed, jointly and severally, by Aptiv PLC and by certain of Aptiv PLC's direct and indirect subsidiaries which are directly or indirectly 100% owned by Aptiv PLC, subject to customary release provisions (other than in the case of Aptiv PLC). The 2015 Euro-denominated Senior Notes, 2015 Senior Notes, 2016 Euro-denominated Senior Notes and 2016 Senior Notes issued by Aptiv PLC are fully and unconditionally guaranteed, jointly and severally, by certain of Aptiv PLC's direct and indirect subsidiaries (including Delphi Corporation), which are directly or indirectly 100% owned by Aptiv PLC, subject to customary release provisions. Refer to Note 22. Supplemental Guarantor and Non-Guarantor Condensed Consolidating Financial Statements for additional information.

Other Financing

Receivable factoring—Aptiv maintains a €300 million European accounts receivable factoring facility that is available on a committed basis. 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 program automatically renews on a non-committed, indefinite basis unless terminated by either party. Borrowings bear interest at Euro Interbank Offered Rate ("EURIBOR") plus 0.42% for borrowings denominated in Euros. Prior to December 2017, the availability under the European factoring facility was €400 million. No amounts were outstanding on the European accounts receivable factoring facility as of December 31, 2017 or December 31, 2016.

In addition, in 2016 one of the Company’s European subsidiaries factored, without recourse, receivables related to certain foreign research tax credits to a financial institution. These transactions were accounted for as true sales of the receivables, and the Company therefore derecognized approximately $4 million from other long-term assets in the consolidated balance sheet as of December 31, 2016, as a result of these transactions.

Capital leases and other—As of December 31, 2017 and December 31, 2016, approximately $42 million and approximately $34 million, respectively, of other debt issued by certain non-U.S. subsidiaries and capital lease obligations were outstanding.

Interest—Cash paid for interest related to debt outstanding totaled $124 million, $144 million and $101 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Indebtedness Related to the Delphi Technologies Separation

As further described in Note 25. Discontinued Operations, the Company received a dividend of approximately $1,148 million from Delphi Technologies in connection with the Separation. Delphi Technologies financed this dividend through the issuance of approximately $1.55 billion of debt, consisting of a senior secured five-year $750 million term loan facility that was issued upon the Separation and $800 million aggregate principal amount of 5.00% senior unsecured notes due 2025 that were issued in September 2017 (collectively, the "Delphi Technologies Debt"). As of December 4, 2017, in connection with the Separation, the Delphi Technologies Debt was transferred to Delphi Technologies and is no longer reflected in the Company’s consolidated financial statements.

12. PENSION BENEFITS

Certain of Aptiv’s non-U.S. subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Aptiv’s primary non-U.S. plans are located in France, Germany, Mexico, Portugal and the United Kingdom (“U.K.”). The U.K. and certain Mexican plans are funded. In addition, Aptiv has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period.

Aptiv sponsors a Supplemental Executive Retirement Program (“SERP”) for those employees who were U.S. executives of DPHH prior to September 30, 2008 and were still U.S. executives of the Company on October 7, 2009, the effective date of the program. This program is unfunded. Executives receive benefits over 5 years after an involuntary or voluntary separation from Aptiv. The SERP is closed to new members.

Amounts disclosed within this note include amounts attributable to the Company's discontinued operations, unless otherwise noted. Refer to Note 25. Discontinued Operations for further detail.

Funded Status

The amounts shown below reflect the change in the U.S. defined benefit pension obligations during 2017 and 2016.

	Year Ended December 31,
	2017				2016
	(in millions)
Benefit obligation at beginning of year	$	40			$	50
Interest cost	1				1
Benefits paid	(12		)		(11		)
Benefit obligation at end of year	29				40
Change in plan assets:
Fair value of plan assets at beginning of year	—				—
Aptiv contributions	12				11
Benefits paid	(12		)		(11		)
Fair value of plan assets at end of year	—				—
Underfunded status	(29		)		(40		)
Amounts recognized in the consolidated balance sheets consist of:
Current liabilities	(10		)		(11		)
Non-current liabilities	(19		)		(29		)
Total	(29		)		(40		)
Amounts recognized in accumulated other comprehensive income consist of (pre-tax):
Actuarial loss	9				10
Total	$	9			$	10

The amounts shown below reflect the change in the non-U.S. defined benefit pension obligations during 2017 and 2016.

	Year Ended December 31,
	2017				2016
	(in millions)
Benefit obligation at beginning of year	$	2,137			$	2,032
Service cost	48				46
Interest cost	54				63
Actuarial (gain) loss	(1		)		363
Benefits paid	(71		)		(84		)
Impact of curtailments	3				2
Spin-off of Delphi Technologies	(1,518		)		—
Exchange rate movements and other	183				(285		)
Benefit obligation at end of year	835				2,137
Change in plan assets:
Fair value of plan assets at beginning of year	1,212				1,209
Actual return on plan assets	75				204
Aptiv contributions	67				83
Benefits paid	(71		)		(84		)
Spin-off of Delphi Technologies	(997		)		—
Exchange rate movements and other	91				(200		)
Fair value of plan assets at end of year	377				1,212
Underfunded status	(458		)		(925		)
Amounts recognized in the consolidated balance sheets consist of:
Non-current assets	4				8
Current liabilities	(31		)		(10		)
Non-current liabilities	(431		)		(923		)
Total	(458		)		(925		)
Amounts recognized in accumulated other comprehensive income consist of (pre-tax):
Actuarial loss	144				505
Prior service cost	1				1
Total	$	145			$	506

The projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”), and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets and with plan assets in excess of accumulated benefit obligations are as follows:

	U.S. Plans								Non-U.S. Plans
	2017				2016				2017				2016
	(in millions) Plans with ABO in Excess of Plan Assets
PBO	$	29			$	40			$	743			$	2,030
ABO	29				40				701				1,805
Fair value of plan assets at end of year	—				—				282				1,100
	Plans with Plan Assets in Excess of ABO
PBO	$	—			$	—			$	92			$	107
ABO	—				—				64				74
Fair value of plan assets at end of year	—				—				95				112
	Total
PBO	$	29			$	40			$	835			$	2,137
ABO	29				40				765				1,879
Fair value of plan assets at end of year	—				—				377				1,212

Benefit costs presented below were determined based on actuarial methods and included the following, which include the results of discontinued operations:

	U.S. Plans
	Year Ended December 31,
	2017				2016				2015
	(in millions)
Interest cost	$	1			$	1			$	1
Amortization of actuarial losses	1				1				1
Net periodic benefit cost	$	2			$	2			$	2

	Non-U.S. Plans
	Year Ended December 31,
	2017				2016				2015
	(in millions)
Service cost	$	48			$	46			$	57
Interest cost	54				63				77
Expected return on plan assets	(63		)		(65		)		(77		)
Settlement loss (1)	1				—				11
Curtailment loss (gain)	16				3				(3		)
Amortization of actuarial losses	35				14				18
Other	—				2				—
Net periodic benefit cost	$	91			$	63			$	83

(1)	Settlement loss for the year ended December 31, 2015 primarily relates to amounts recognized related to the divestiture of the Company's Reception Systems business, as further described in Note 20. Acquisitions and Divestitures.

Other postretirement benefit obligations were approximately $4 million and $5 million at December 31, 2017 and 2016, respectively.

Effective January 1, 2016, the Company changed the method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefit plans that utilize a yield curve approach. Historically, the Company estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company elected to utilize a

full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the projected benefit obligation to the relevant projected cash flows. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of the total benefit obligations. The Company has accounted for this change as a change in accounting estimate and accordingly accounted for it on a prospective basis. The reduction in service and interest costs associated with this change in estimate for the year ended December 31, 2016 was less than $10 million.

Experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions are recognized in other comprehensive income. Cumulative gains and losses in excess of 10% of the PBO for a particular plan are amortized over the average future service period of the employees in that plan. The estimated actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 is $15 million.

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
	2017			2016			2017			2016
Weighted-average discount rate	2.70	%		2.70	%		3.39	%		2.83	%
Weighted-average rate of increase in compensation levels	N/A			N/A			3.65	%		3.86	%

Assumptions used to determine net expense for years ended December 31:

	Pension Benefits
	U.S. Plans									Non-U.S. Plans
	2017			2016			2015			2017			2016			2015
Weighted-average discount rate	2.70	%		2.70	%		2.50	%		2.83	%		3.81	%		3.67	%
Weighted-average rate of increase in compensation levels	N/A			N/A			N/A			3.86	%		3.67	%		3.65	%
Weighted-average expected long-term rate of return on plan assets	N/A			N/A			N/A			5.84	%		5.84	%		6.34	%

Aptiv selects 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.

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 2017 expense, Aptiv assumed a long-term expected asset rate of return of approximately 5.50% and 7.50% for the U.K. and Mexico, respectively. Aptiv 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 long-term, prospective rates. To determine the expected return on plan assets, the market-related value of approximately 100% of our plan assets is actual fair value. The expected return on the remainder of our plan assets is determined by applying the expected long-term rate of return on assets to a calculated market-related value of these plan assets, which recognizes changes in the fair value of the plan assets in a systematic manner over five years.

Aptiv’s pension expense for 2018 is determined at the 2017 year end measurement date. For purposes of analysis, the following table highlights the sensitivity of the Company’ pension obligations and expense attributable to continuing operations to changes in key assumptions:

Change in Assumption		Impact on Pension Expense		Impact on PBO
25 basis point (“bp”) decrease in discount rate		+ $2 million		+ $29 million
25 bp increase in discount rate		- $2 million		- $27 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.

Pension Funding

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Projected Pension Benefit Payments
	U.S. Plans				Non-U.S. Plans
	(in millions)
2018	$	10			$	52
2019	8				33
2020	4				35
2021	3				38
2022	1				39
2023 – 2027	3				242

Aptiv anticipates making pension contributions and benefit payments of approximately $62 million in 2018.

Aptiv sponsors defined contribution plans for certain hourly and salaried employees. Expense related to the contributions for these plans attributable to continued operations was $36 million, $36 million, and $41 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Plan Assets

Certain pension plans sponsored by Aptiv invest in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility. These asset classes include developed market equities, emerging market equities, private equity, global high quality and high yield fixed income, real estate and absolute return strategies.

The fair values of Aptiv’s pension plan assets weighted-average asset allocations at December 31, 2017 and 2016, by asset category, are as follows:

		Fair Value Measurements at December 31, 2017
Asset Category		Total				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(in millions)
Cash		$	17			$	17			$	—			$	—
Time deposits		4				—				4				—
Equity mutual funds		114				—				114				—
Bond mutual funds		94				—				94				—
Real estate trust funds		13				—				—				13
Hedge funds		27				—				—				27
Insurance contracts		6				—				—				6
Debt securities		51				51				—				—
Equity securities		51				51				—				—
Total		$	377			$	119			$	212			$	46

		Fair Value Measurements at December 31, 2016
Asset Category		Total				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(in millions)
Cash		$	61			$	61			$	—			$	—
Time deposits		10				—				10				—
Equity mutual funds		423				—				423				—
Bond mutual funds		469				—				469				—
Real estate trust funds		29				—				—				29
Hedge funds		107				—				—				107
Insurance contracts		5				—				—				5
Debt securities		51				51				—				—
Equity securities		57				57				—				—
Total		$	1,212			$	169			$	902			$	141

Following is a description of the valuation methodologies used for pension assets measured at fair value.

Time deposits—The fair value of fixed-maturity certificates of deposit was estimated using the rates offered for deposits of similar remaining maturities.

Equity mutual funds—The fair value of the equity mutual funds is determined by the indirect quoted market prices on regulated financial exchanges of the underlying investments included in the fund.

Bond mutual funds—The fair value of the bond mutual funds is determined by the indirect quoted market prices on regulated financial exchanges of the underlying investments included in the fund.

Real estate—The fair value of real estate properties is estimated using an annual appraisal provided by the administrator of the property investment. Management believes this is an appropriate methodology to obtain the fair value of these assets.

Hedge funds—The fair value of the hedge funds is accounted for by a custodian. The custodian obtains valuations from the underlying hedge fund managers based on market quotes for the most liquid assets and alternative methods for assets that do not have sufficient trading activity to derive prices. Management and the custodian review the methods used by the underlying managers to value the assets. Management believes this is an appropriate methodology to obtain the fair value of these assets.

Insurance contracts—The insurance contracts are invested in a fund with guaranteed minimum returns. The fair values of these contracts are based on the net asset value underlying the contracts.

Debt securities—The fair value of debt securities is determined by direct quoted market prices on regulated financial exchanges.

Equity securities—The fair value of equity securities is determined by direct quoted market prices on regulated financial exchanges.

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Real Estate Trust Fund				Hedge Funds				Insurance Contracts
	(in millions)
Beginning balance at January 1, 2016	$	39			$	102			$	1
Actual return on plan assets:
Relating to assets still held at the reporting date	4				22				—
Purchases, sales and settlements	(10		)		—				4
Foreign currency translation and other	(4		)		(17		)		—
Ending balance at December 31, 2016	$	29			$	107			$	5
Actual return on plan assets:
Relating to assets still held at the reporting date	$	1			$	2			$	1
Purchases, sales and settlements	6				—				—
Spin-off of Delphi Technologies	(23		)		(84		)		—
Foreign currency translation and other	—				2				—
Ending balance at December 31, 2017	$	13			$	27			$	6

13. COMMITMENTS AND CONTINGENCIES

Ordinary Business Litigation

Aptiv is from time to time subject to various legal actions and claims incidental to its business, including those arising out of alleged defects, alleged breaches of contracts, product warranties, intellectual property matters, and employment-related matters. It is the opinion of Aptiv that the outcome of such matters will not have a material adverse impact on the consolidated financial position, results of operations, or cash flows of Aptiv. With respect to warranty matters, although Aptiv cannot ensure that the future costs of warranty claims by customers will not be material, Aptiv believes its established reserves are adequate to cover potential warranty settlements.

Unsecured Creditors Litigation

Aptiv has been subject to ongoing litigation related to general unsecured claims against the former Delphi Corporation, now known as DPHH, resulting from that entity's 2005 bankruptcy filing. The Fourth Amended and Restated Limited Liability Partnership Agreement of Delphi Automotive LLP (the “Fourth LLP Agreement”) was entered into on July 12, 2011 by the members of Delphi Automotive LLP in order to position the Company for its initial public offering. Under the terms of the Fourth LLP Agreement, if cumulative distributions to the members of Delphi Automotive LLP under certain provisions of the Fourth LLP Agreement exceed $7.2 billion, Aptiv, as disbursing agent on behalf of DPHH, is required to pay to the holders of allowed general unsecured claims against DPHH, $32.50 for every $67.50 in excess of $7.2 billion distributed to the members, up to a maximum amount of $300 million. In December 2014, a complaint was filed in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court") alleging that the 2011 redemption by Delphi Automotive LLP of the membership interests of GM and the Pension Benefit Guaranty Corporation (the "PBGC") totaling $4.4 billion, and the subsequent repurchase of shares and payment of dividends by Aptiv PLC, constituted distributions under the terms of the Fourth LLP Agreement approximating $7.2 billion, triggering the maximum $300 million distribution to the holders of general unsecured claims.

In May 2016, the Bankruptcy Court initially denied both parties' motions for summary judgment, requiring further submissions to the Bankruptcy Court regarding the parties' intent with respect to the redemptions of the GM and PBGC membership interests. On January 12, 2017, the Bankruptcy Court granted summary judgment in favor of the plaintiffs, ruling

that the membership interest redemption payments qualified as distributions, which, along with share repurchases and dividend payments made by Aptiv, count toward the $7.2 billion threshold, and thus the $300 million maximum distribution for general unsecured claims has been triggered.

In connection with the January 2017 ruling, the Company recorded a reserve of $300 million in the fourth quarter of 2016. The reserve was recorded to other expense in the consolidated statement of operations, and resulted in a corresponding reduction in earnings per diluted share of approximately $1.10 for the year ended December 31, 2016. In March 2017, the Bankruptcy Court issued a ruling on the application of pre-judgment interest owed on the amount of the distribution to be made to the holders of general unsecured claims. Pursuant to this ruling, Aptiv recorded an additional reserve of $27 million during the three months ended March 31, 2017.

During the three months ended June 30, 2017, Aptiv and the plaintiffs reached an agreement to settle this matter for $310 million, which was subsequently approved by the Bankruptcy Court. In July 2017, the Company paid the $310 million settlement pursuant to the terms of the settlement agreement. In accordance with the terms of the settlement agreement, the Company recorded a net incremental charge of $10 million to other expense during the year ended December 31, 2017.

Brazil Matters

Aptiv conducts business operations in Brazil that are subject to the Brazilian federal labor, social security, environmental, tax and customs laws, as well as a variety of state and local laws. While Aptiv believes it complies with such laws, they are complex, subject to varying interpretations, and the Company is often engaged in litigation with government agencies regarding the application of these laws to particular circumstances. As of December 31, 2017, the majority of claims asserted against Aptiv in Brazil relate to such litigation. The remaining claims in Brazil relate to commercial and labor litigation with private parties. As of December 31, 2017, claims totaling approximately $185 million (using December 31, 2017 foreign currency rates) have been asserted against Aptiv in Brazil. As of December 31, 2017, the Company maintains accruals for these asserted claims of $25 million (using December 31, 2017 foreign currency rates). The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based on the Company’s analyses and assessment of the asserted claims and prior experience with similar matters. While the Company believes its accruals are adequate, the final amounts required to resolve these matters could differ materially from the Company’s recorded estimates and Aptiv’s results of operations could be materially affected. The Company estimates the reasonably possible loss in excess of the amounts accrued related to these claims to be zero to $160 million.

Environmental Matters

Aptiv is subject to the requirements of U.S. federal, state, local and non-U.S. environmental and safety and health laws and regulations. As of December 31, 2017 and December 31, 2016, the undiscounted reserve for environmental investigation and remediation was approximately $4 million (which was recorded in other long-term liabilities) and $5 million (of which $1 million was recorded in accrued liabilities and $4 million was recorded in other long-term liabilities), respectively. Aptiv cannot ensure that environmental requirements will not change or become more stringent over time or that its eventual environmental remediation costs and liabilities will not exceed the amount of its current reserves. In the event that such liabilities were to significantly exceed the amounts recorded, Aptiv’s results of operations could be materially affected. At December 31, 2017 the difference between the recorded liabilities and the reasonably possible range of potential loss was not material.

Operating Leases

Rental expense totaled $100 million, $85 million and $82 million for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, Aptiv had minimum lease commitments under non-cancellable operating leases totaling $447 million, which become due as follows:

	Minimum Future Operating Lease Commitments
	(in millions)
2018	$	97
2019	76
2020	62
2021	56
2022	45
Thereafter	111
Total	$	447

14. INCOME TAXES

Income from continuing operations before income taxes and equity income for U.S. and non-U.S. operations are as follows:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
U.S. (loss) income	$	(32	)		$	150			$	281
Non-U.S. income	1,287				850				716
Income from continuing operations before income taxes and equity income	$	1,255			$	1,000			$	997

The provision (benefit) for income taxes from continuing operations is comprised of:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Current income tax expense (benefit):
U.S. federal	$	37			$	47			$	(17	)
Non-U.S.	214				238				185
U.S. state and local	(2		)		3				(1		)
Total current	249				288				167
Deferred income tax (benefit) expense, net:
U.S. federal	(15		)		(88		)		(1		)
Non-U.S.	(12		)		(33		)		(5		)
U.S. state and local	1				—				—
Total deferred	(26		)		(121		)		(6		)
Total income tax provision	$	223			$	167			$	161

Cash paid or withheld for income taxes was $275 million, $253 million and $231 million for the years ended December 31, 2017, 2016 and 2015, respectively.

For purposes of comparability and consistency, the Company uses the notional U.S. federal income tax rate when presenting the Company’s reconciliation of the income tax provision. The Company is a U.K. resident taxpayer, and as such is not generally subject to U.K. tax on remitted foreign earnings. As a result, the Company does not anticipate foreign earnings would be subject to a 35% tax rate upon repatriation to the U.K., as is the case when U.S. based companies repatriate earnings to the U.S. A reconciliation of the provision for income taxes compared with the amounts at the notional U.S. federal statutory rate was:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Notional U.S. federal income taxes at statutory rate	$	439			$	350			$	349
Income taxed at other rates	(260		)		(86		)		(120		)
Change in valuation allowance	(6		)		(17		)		15
Other change in tax reserves	25				76				6
Withholding taxes	64				44				50
Tax credits	(32		)		(196		)		(133		)
Change in tax law	(6		)		(1		)		11
Other adjustments	(1		)		(3		)		(17		)
Total income tax expense	$	223			$	167			$	161
Effective tax rate	18		%		17		%		16		%

The Company’s tax rate is affected by the fact that its parent entity is a U.K. resident taxpayer, the tax rates in the U.K. 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. Included in the non-U.S. income taxed at other rates are tax incentives obtained in various non-U.S. countries, primarily the High and New Technology Enterprise ("HNTE") status in China, a Free Trade Zone exemption in Honduras and the Special Economic Zone exemption in Turkey, totaled $45 million in 2017, $45 million in 2016, and $46 million in 2015, as well as tax benefit for income earned, and no tax benefit for losses incurred, in jurisdictions where a valuation allowance has been recorded. The Company currently benefits from tax holidays in various non-U.S. jurisdictions with expiration dates from 2017 through 2026. The income tax benefits attributable to these tax holidays are approximately $7 million ($0.03 per share) in 2017, $10 million ($0.04 per share) in 2016 and $14 million ($0.05 per share) in 2015.

The effective tax rate in the year ended December 31, 2017 was impacted by increased tax expense of approximately $50 million due to the enactment of the Tax Cuts and Jobs Act (the "Tax Legislation") in the United States on December 22, 2017, partially offset by favorable geographic income mix as compared to 2016, primarily due to changes in the underlying business operations. The Tax Legislation significantly revises the U.S. corporate income tax by, among other things, lowering corporate income tax rates and imposing a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries. This impact was primarily the result of increased tax expense due to the one-time deemed repatriation tax and a reduction of our foreign tax credit, partially offset by the favorable impact of the reduced tax rate on the Company’s net deferred tax liabilities. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 (“SAB 118”), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Tax Legislation for which measurement could be reasonably estimated. Although the Company continues to analyze certain aspects of the Tax Legislation and refine its assessment, the ultimate impact of the Tax Legislation may differ from these estimates due to its continued analysis or further regulatory guidance that may be issued as a result of the Tax Legislation. Pursuant to SAB 118, adjustments to the provisional amounts recorded by the Company as of December 31, 2017 that are identified within a subsequent measurement period of up to one year from the enactment date will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined.

The Company incurred certain intra-entity gains and related tax impacts in connection with transactions comprising the Separation. During the fourth quarter of 2017, the Company finalized its plan and entered into several transactions to separate these businesses into stand-alone legal and operational structures. As these transactions occurred between related subsidiaries that were consolidated at the time the transactions occurred, the gains were deferred within the consolidated financial statements in accordance with ASC 810. The tax impacts of the gains, which totaled approximately $64 million, were recognized upon the distribution of the related assets to Delphi Technologies and recorded as a reduction to Shareholders' Equity during the year ended December 31, 2017.

The effective tax rate in the year ended December 31, 2016 was impacted by favorable geographic income mix in 2016 as compared to 2015, primarily due to changes in the underlying operations of the business, as well as $17 million for releases of

valuation allowances as a result of the Company's determination that it was more likely than not that certain deferred tax assets would be realized. These benefits were offset by $76 million of reserve adjustments recorded for uncertain tax positions, which included reserves for ongoing audits in foreign jurisdictions, as well as for changes in estimates based on relevant new or additional evidence obtained related to certain of the Company's tax positions, including tax authority administrative pronouncements and court decisions. These reserve adjustments resulted in foreign tax credit benefits of approximately $18 million. Additionally, following a change in U.S. tax regulation during 2016, the Company recorded a tax credit benefit of approximately $16 million during the year ended December 31, 2016.

As described above, certain of the Company's Chinese subsidiaries benefit from a reduced corporate income tax rate as a result of their HNTE status. Aptiv submitted applications for new 6-year HNTE grants for certain of these subsidiaries and received the relevant regulatory approvals during 2016, which entitled these entities to use the reduced HNTE income tax rate retroactive to the expiration date of the prior grants. As a result, there was no change in the tax status of these entities as compared to the year ended December 31, 2016.

The effective tax rate in the year ended December 31, 2015 was impacted by increased tax expense of $15 million resulting from changes in judgment related to deferred tax asset valuation allowances, as well as the enactment of the UK Finance (No. 2) Act 2015 (the “UK 2015 Finance Act”) on November 18, 2015, which provides for a reduction of the corporate income tax rate from 20% to 19% effective April 1, 2017, with a further reduction to 18% effective April 1, 2020. The income tax accounting effect, including any retroactive effect, of a tax law change is accounted for in the period of enactment, which in this case was the fourth quarter of 2015. As a result, the effective tax rate was impacted by an increased tax expense of approximately $2 million for the year ended December 31, 2015 due to the resultant impact on the net deferred tax asset balances. Additionally, the effective tax rate in the year ended December 31, 2015 was impacted by unfavorable geographic income mix in 2015 as compared to 2014, primarily due to changes in the underlying operations of the business, offset by tax planning initiatives and the resulting favorable impact on foreign tax credits.

Deferred Income Taxes

The Company accounts for income taxes and the related accounts under the liability method. Deferred income tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Significant components of the deferred tax assets and liabilities are as follows:

	December 31,
	2017				2016
	(in millions)
Deferred tax assets:
Pension	$	94			$	79
Employee benefits	12				26
Net operating loss carryforwards	976				1,362
Warranty and other liabilities	88				93
Other	210				236
Total gross deferred tax assets	1,380				1,796
Less: valuation allowances	(1,008		)		(1,399		)
Total deferred tax assets (1)	$	372			$	397
Deferred tax liabilities:
Fixed assets	$	33			$	21
Tax on unremitted profits of certain foreign subsidiaries	69				73
Intangibles	307				316
Total gross deferred tax liabilities	409				410
Net deferred tax liabilities	$	(37	)		$	(13	)

(1)	Reflects gross amount before jurisdictional netting of deferred tax assets and liabilities.

Deferred tax liabilities and assets are classified as long-term in the consolidated balance sheet. Net deferred tax assets and liabilities are included in the consolidated balance sheets as follows:

	December 31,
	2017				2016
	(in millions)
Long-term assets	$	185			$	130
Long-term liabilities	(222		)		(143		)
Total deferred tax liability	$	(37	)		$	(13	)

The net deferred tax liability of $37 million as of December 31, 2017 are primarily comprised of deferred tax liabilities in Japan and Singapore offset by deferred tax asset amounts primarily in the U.K., U.S., Mexico and China.

Net Operating Loss and Tax Credit Carryforwards

As of December 31, 2017, the Company has gross deferred tax assets of approximately $965 million for non-U.S. net operating loss (“NOL”) carryforwards with recorded valuation allowances of $850 million. These NOL’s are available to offset future taxable income and realization is dependent on generating sufficient taxable income prior to expiration of the loss carryforwards. The NOL’s primarily relate to U.K., Luxembourg and Germany. The NOL carryforwards have expiration dates ranging from one year to an indefinite period. The NOL carryforwards available for use on tax returns are $976 million as of December 31, 2017.

Deferred tax assets include $108 million and $99 million of tax credit carryforwards with recorded valuation allowances of $49 million and $35 million at December 31, 2017 and 2016, respectively. These tax credit carryforwards expire in 2018 through 2025.

Cumulative Undistributed Foreign Earnings

No income taxes have been provided on indefinitely reinvested earnings of certain foreign subsidiaries at December 31, 2017.

Withholding taxes of $69 million have been accrued on undistributed earnings that are not indefinitely reinvested and are primarily related to China, South Korea, Honduras, and Morocco. There are no other material liabilities for income taxes on the undistributed earnings of foreign subsidiaries, as the Company has concluded that such earnings are either indefinitely reinvested or should not give rise to additional income tax liabilities as a result of the distribution of such earnings.

Uncertain Tax Positions

The Company recognizes tax benefits only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company's tax returns that do not meet these recognition and measurement standards.

A reconciliation of the gross change in the unrecognized tax benefits balance, excluding interest and penalties is as follows:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Balance at beginning of year	$	180			$	43			$	57
Additions related to current year	51				94				9
Additions related to prior years	40				67				—
Reductions related to prior years	(31		)		(15		)		(20		)
Reductions due to expirations of statute of limitations	(15		)		(8		)		—
Settlements	(1		)		(1		)		(3		)
Balance at end of year	$	224			$	180			$	43

A portion of the Company's unrecognized tax benefits would, if recognized, reduce its effective tax rate. The remaining unrecognized tax benefits relate to tax positions for which only the timing of the benefit is uncertain. Recognition of these tax

benefits would reduce the Company’s effective tax rate only through a reduction of accrued interest and penalties. As of December 31, 2017 and 2016, the amounts of unrecognized tax benefit that would reduce the Company’s effective tax rate were $159 million and $121 million, respectively. In addition, $85 million and $74 million for 2017 and 2016, respectively, would be offset by the write-off of a related deferred tax asset, if recognized.

The Company recognizes interest and penalties relating to unrecognized tax benefits as part of income tax expense. Total accrued liabilities for interest and penalties were $21 million and $15 million at December 31, 2017 and 2016, respectively. Total interest and penalties recognized as part of income tax expense was a $5 million expense, a $5 million expense and a $2 million benefit for the years ended December 31, 2017, 2016 and 2015, respectively.

The Company files tax returns in multiple jurisdictions and is subject to examination by taxing authorities throughout the world. Taxing jurisdictions significant to Aptiv include China, Luxembourg, Germany, Mexico, the U.S. and the U.K. Open tax years related to these taxing jurisdictions remain subject to examination and could result in additional tax liabilities. In general, the Company's affiliates are no longer subject to income tax examinations by foreign tax authorities for years before 2001. It is reasonably possible that audit settlements, the conclusion of current examinations or the expiration of the statute of limitations in several jurisdictions could impact the Company’s unrecognized tax benefits.

15. SHAREHOLDERS’ EQUITY AND NET INCOME PER SHARE

Net Income Per Share

Basic net income per share is computed by dividing net income attributable to Aptiv by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share reflects the weighted average dilutive impact of all potentially dilutive securities from the date of issuance and is computed using the treasury stock method by dividing net income attributable to Aptiv by the diluted weighted average number of ordinary shares outstanding. For all periods presented, the calculation of net income per share contemplates the dilutive impacts, if any, of the Company’s share-based compensation plans. Refer to Note 21. Share-Based Compensation for additional information.

Weighted Average Shares

The following table illustrates net income per share attributable to Aptiv and the weighted average shares outstanding used in calculating basic and diluted income per share:

	Year Ended December 31,
	2017				2016				2015
	(in millions, except per share data)
Numerator:
Income from continuing operations	$	1,021			$	834			$	813
Income from discontinued operations	334				423				637
Net income attributable to Aptiv	$	1,355			$	1,257			$	1,450
Denominator:
Weighted average ordinary shares outstanding, basic	267.16				273.02				285.20
Dilutive shares related to RSUs	0.87				0.68				1.44
Weighted average ordinary shares outstanding, including dilutive shares	268.03				273.70				286.64
Basic net income per share:
Continuing operations	$	3.82			$	3.05			$	2.85
Discontinued operations	1.25				1.55				2.23
Basic net income per share attributable to Aptiv	$	5.07			$	4.60			$	5.08
Diluted net income per share:
Continuing operations	$	3.81			$	3.05			$	2.84
Discontinued operations	1.25				1.54				2.22
Diluted net income per share attributable to Aptiv	$	5.06			$	4.59			$	5.06
Anti-dilutive securities share impact	—				—				—

Share Repurchase Program

In April 2016, the Board of Directors authorized a share repurchase program of up to $1.5 billion of ordinary shares, which commenced in September 2016 following the completion of the Company's $1.5 billion January 2015 share repurchase program. This share repurchase program provides for share purchases in the open market or in privately negotiated transactions, depending on share price, market conditions and other factors, as determined by the Company.

A summary of the ordinary shares repurchased during the years ended December 31, 2017, 2016 and 2015 is as follows:

	Year Ended December 31,
	2017				2016				2015
Total number of shares repurchased	4,667,193				9,481,946				14,581,705
Average price paid per share	$	82.00			$	66.93			$	79.48
Total (in millions)	$	383			$	635			$	1,159

As of December 31, 2017, approximately $989 million of share repurchases remained available under the April 2016 share repurchase program. All 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

The Company has declared and paid cash dividends per ordinary share during the periods presented as follows:

	Dividend				Amount
	Per Share				(in millions)
2017:
Fourth quarter	$	0.29			$	77
Third quarter	0.29				77
Second quarter	0.29				78
First quarter	0.29				78
Total	$	1.16			$	310
2016:
Fourth quarter	$	0.29			$	79
Third quarter	0.29				79
Second quarter	0.29				79
First quarter	0.29				80
Total	$	1.16			$	317

In addition, in December 2017, the Board of Directors declared a regular quarterly cash dividend of $0.22 per ordinary share, payable on February 14, 2018 to shareholders of record at the close of business on February 5, 2018.

On December 4, 2017, Aptiv distributed the issued and outstanding ordinary shares of Delphi Technologies to the Company's shareholders. The Company distributed to its shareholders one ordinary share of Delphi Technologies for every three Aptiv ordinary shares outstanding as of November 22, 2017, the record date for the distribution. Shareholders received cash in lieu of any fractional ordinary shares of Delphi Technologies.

16. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive income (loss) attributable to Aptiv (net of tax) are shown below. Other comprehensive income includes activity relating to discontinued operations.

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Foreign currency translation adjustments:
Balance at beginning of year	$	(799	)		$	(661	)		$	(333	)
Aggregate adjustment for the year (1)	305				(138		)		(328		)
Spin-off of Delphi Technologies	125				—				—
Balance at end of year	(369		)		(799		)		(661		)
Gains (losses) on derivatives:
Balance at beginning of year	$	(11	)		$	(106	)		$	(78	)
Other comprehensive income before reclassifications (net tax effect of $1 million, $23 million and $30 million)	14				(1		)		(118		)
Reclassification to income (net tax effect of $6 million, $30 million and $28 million)	1				96				90
Balance at end of year	4				(11		)		(106		)
Pension and postretirement plans:
Balance at beginning of year	$	(405	)		$	(266	)		$	(330	)
Other comprehensive income before reclassifications (net tax effect of $3 million, $32 million and $5 million)	(19		)		(150		)		41
Reclassification to income (net tax effect of $6 million, $1 million and $3 million)	30				11				23
Spin-off of Delphi Technologies	288				—				—
Balance at end of year	(106		)		(405		)		(266		)
Accumulated other comprehensive loss, end of year	$	(471	)		$	(1,215	)		$	(1,033	)

(1)

Includes (losses) gains of $(177) million, $67 million and $(5) million for the years ended December 31, 2017, 2016 and 2015, respectively, related to non-derivative net investment hedges, principally offset by the foreign currency impact of intra-entity loans that are of a long-term investment nature in each period. Refer to Note 17. Derivatives and Hedging Activities for further description of the Company's net investment hedges. The year ended December 31, 2016 also includes $29 million of accumulated currency translation adjustment losses reclassified to net income as a result of the sale of the Company's Mechatronics business, as further described in Note 20. Acquisitions and Divestitures.

Reclassifications from accumulated other comprehensive income (loss) to income were as follows:

Reclassification Out of Accumulated Other Comprehensive Income (Loss)
Details About Accumulated Other Comprehensive Income Components		Year Ended December 31,												Affected Line Item in the Statement of Operations
	2017				2016				2015
		(in millions)
Foreign currency translation adjustments:
Sale of Mechatronics business (1)		$	—			$	(29	)		$	—			Cost of sales
		—				(29		)		—				Income before income taxes
		—				—				—				Income tax expense
		—				(29		)		—				Net income
		—				—				—				Net income attributable to noncontrolling interest
		$	—			$	(29	)		$	—			Net income attributable to Aptiv
Gains (losses) on derivatives:
Commodity derivatives		$	18			$	(42	)		$	(44	)		Cost of sales
Foreign currency derivatives		(25		)		(84		)		(74		)		Cost of sales
		(7		)		(126		)		(118		)		Income before income taxes
		6				30				28				Income tax expense
		(1		)		(96		)		(90		)		Net income
		—				—				—				Net income attributable to noncontrolling interest
		$	(1	)		$	(96	)		$	(90	)		Net income attributable to Aptiv
Pension and postretirement plans:
Actuarial loss		$	(35	)		$	(12	)		$	(18	)		(2)
Settlement loss		(1		)		—				(11		)		(2)
Curtailment gain		—				—				3				(2)
		(36		)		(12		)		(26		)		Income before income taxes
		6				1				3				Income tax expense
		(30		)		(11		)		(23		)		Net income
		—				—				—				Net income attributable to noncontrolling interest
		$	(30	)		$	(11	)		$	(23	)		Net income attributable to Aptiv
Total reclassifications for the year		$	(31	)		$	(136	)		$	(113	)

(1)	Represents accumulated currency translation adjustment losses reclassified to net income as a result of the sale of the Company's Mechatronics business during the year ended December 31, 2016, as further described in Note 20. Acquisitions and Divestitures.

(2)	These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note 12. Pension Benefits for additional details).

17. DERIVATIVES AND HEDGING ACTIVITIES

Cash Flow Hedges

Aptiv is exposed to market risk, such as fluctuations in foreign currency exchange rates, commodity prices and changes in interest rates, which may result in cash flow risks. To manage the volatility relating to these exposures, Aptiv aggregates the exposures on a consolidated basis to take advantage of natural offsets. For exposures that are not offset within its operations, Aptiv enters into various derivative transactions pursuant to its risk management policies, which prohibit holding or issuing derivative financial instruments for speculative purposes, and designation of derivative instruments is performed on a transaction basis to support hedge accounting. The changes in fair value of these hedging instruments are offset in part or in

whole by corresponding changes in the fair value or cash flows of the underlying exposures being hedged. Aptiv assesses the initial and ongoing effectiveness of its hedging relationships in accordance with its documented policy.

As of December 31, 2017, the Company had the following outstanding notional amounts related to commodity and foreign currency forward and option contracts designated as cash flow hedges that were entered into to hedge forecasted exposures:

Commodity		Quantity Hedged			Unit of Measure		Notional Amount (Approximate USD Equivalent)
		(in thousands)					(in millions)
Copper		57,393			pounds		$	175

Foreign Currency		Quantity Hedged			Unit of Measure		Notional Amount (Approximate USD Equivalent)
		(in millions)
Mexican Peso		14,215			MXN		$	725
Chinese Yuan Renminbi		2,290			RMB		350
Polish Zloty		307			PLN		90
New Turkish Lira		185			TRY		50

The Company had additional foreign currency forward contracts designated as cash flow hedges with notional amounts that individually amounted to less than $10 million. As of December 31, 2017, Aptiv has entered into derivative instruments to hedge cash flows extending out to December 2019.

Gains and losses on derivatives qualifying as cash flow hedges are recorded in other comprehensive income ("OCI"), to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated OCI will fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. Net gains on cash flow hedges included in accumulated OCI as of December 31, 2017 were $8 million ($23 million, net of tax). Of this total, approximately $11 million of gains are expected to be included in cost of sales within the next 12 months and $3 million of losses are expected to be included in cost of sales in subsequent periods. Cash flow hedges are discontinued when Aptiv determines it is no longer probable that the originally forecasted transactions will occur. The amount included in cost of sales related to hedge ineffectiveness was insignificant for the years ended December 31, 2017, 2016 and 2015, respectively. Cash flows from derivatives used to manage commodity and foreign exchange risks are classified as operating activities within the consolidated statement of cash flows.

Net Investment Hedges

The Company is also exposed to the risk that adverse changes in foreign currency exchange rates could impact its net investment in non-U.S. subsidiaries. To manage this risk, the Company designates certain qualifying derivative and non-derivative instruments, including foreign currency forward contracts and foreign currency-denominated debt, as net investment hedges of certain non-U.S. subsidiaries. The effective portion of the gains or losses on instruments designated as net investment hedges are recognized within OCI to offset changes in the value of the net investment in these foreign currency-denominated operations. Any ineffective portion of gains or losses on net investment hedges are reclassified to other income (expense), net within the consolidated statement of operations. Gains and losses reported in accumulated other comprehensive income (loss) are reclassified to earnings only when the related currency translation adjustments are required to be reclassified, usually upon sale or liquidation of the investment. Cash flows from derivatives designated as net investment hedges are classified as investing activities within the consolidated statement of cash flows.

During 2016 and 2017, the Company entered into a series of forward contracts, each of which were designated as net investment hedges of the foreign currency exposure of the Company's investments in certain Chinese Yuan Renminbi ("RMB")-denominated subsidiaries. During the first quarter of 2016, the Company entered into a forward contract with a notional amount of 2.4 billion RMB (approximately $370 million, using March 31, 2016 foreign currency rates), which matured in May 2016, and the Company paid $1 million at settlement. In December 2016, the Company entered into a forward contract with a notional amount of 1.8 billion RMB (approximately $265 million, using December 31, 2016 foreign currency rates), which matured in June 2017, and the Company paid $12 million at settlement. In June 2017, the Company entered into a forward contract with a notional amount of 2.4 billion RMB (approximately $345 million, using June 30, 2017 foreign currency rates), which matured in December 2017, and the Company paid $16 million at settlement. In December 2017, the Company entered into a forward contract with a notional amount of 1.9 billion RMB (approximately $290 million, using December 31, 2017 foreign currency rates), which matures in June 2018. Refer to the tables below for details of the fair value recorded in the

consolidated balance sheet and the effects recorded in the consolidated statement of operations and consolidated statement of comprehensive income related to these derivative instruments.

The Company has designated the €700 million 2015 Euro-denominated Senior Notes and the €500 million 2016 Euro-denominated Senior Notes, as more fully described in Note 11. Debt, as net investment hedges of the foreign currency exposure of its investments in certain Euro-denominated subsidiaries. Due to changes in the value of the Euro-denominated debt instruments designated as net investment hedges, during the years ended December 31, 2017 and 2016, $(177) million and $65 million, respectively, of (losses) gains were recognized within the cumulative translation adjustment component of OCI. Cumulative (losses) gains included in accumulated OCI on these net investment hedges were $(117) million as of December 31, 2017 and $60 million as of December 31, 2016. There were no amounts reclassified or recognized for ineffectiveness in the years ended December 31, 2017 or 2016.

Derivatives Not Designated as Hedges

In certain occasions the Company enters into certain foreign currency and commodity contracts that are not designated as hedges. When hedge accounting is not applied to derivative contracts, gains and losses are recorded to other income (expense), net and cost of sales in the consolidated statement of operations.

As more fully disclosed in Note 20. Acquisitions and Divestitures, on July 30, 2015, Aptiv made a recommended offer to acquire HellermannTyton. In conjunction with the acquisition, in August 2015, the Company entered into option contracts with notional amounts totaling £917 million to hedge portions of the currency risk associated with the cash payment for the acquisition at a cost of $15 million. Subsequently, in conjunction with the closing of the acquisition, Aptiv entered into offsetting option contracts. Pursuant to the requirements of ASC 815, Derivatives and Hedging, the options did not qualify as hedges for accounting purposes. During the year ended December 31, 2015, the change in fair value resulted in a pre-tax loss of $15 million included within other income (expense), net in the consolidated statement of operations. The Company paid $15 million to settle these options during the year ended December 31, 2016, which is reflected within investing activities in the consolidated statement of cash flows.

Fair Value of Derivative Instruments in the Balance Sheet

The fair value of derivative financial instruments recorded in the consolidated balance sheets as of December 31, 2017 and December 31, 2016 are as follows:

	Asset Derivatives						Liability Derivatives						Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
	Balance Sheet Location		December 31, 2017				Balance Sheet Location		December 31, 2017				December 31, 2017
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	Other current assets		$	27			Accrued liabilities		$	—
Foreign currency derivatives*	Other current assets		3				Other current assets		—				$	3
Foreign currency derivatives*	Accrued liabilities		7				Accrued liabilities		17				(10		)
Commodity derivatives	Other long-term assets		8				Other long-term liabilities		—
Foreign currency derivatives*	Other long-term liabilities		—				Other long-term liabilities		11				(11		)
Derivatives designated as net investment hedges:
Foreign currency derivatives	Other current assets		—				Accrued liabilities		5
Total derivatives designated as hedges			$	45					$	33

	Asset Derivatives						Liability Derivatives						Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
	Balance Sheet Location		December 31, 2016				Balance Sheet Location		December 31, 2016				December 31, 2016
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	Other current assets		$	7			Accrued liabilities		$	—
Foreign currency derivatives*	Other current assets		6				Other current assets		3				$	3
Foreign currency derivatives*	Accrued liabilities		9				Accrued liabilities		55				(46		)
Commodity derivatives	Other long-term assets		4				Other long-term liabilities		—
Foreign currency derivatives*	Other long-term assets		8				Other long-term assets		4				4
Foreign currency derivatives*	Other long-term liabilities		—				Other long-term liabilities		11				(11		)
Derivatives designated as net investment hedges:
Foreign currency derivatives	Other current assets		2				Accrued liabilities		—
Total derivatives designated as hedges			$	36					$	73
Derivatives not designated:
Foreign currency derivatives*	Other current assets		$	—			Other current assets		$	1			(1		)
Foreign currency derivatives*	Accrued liabilities		2				Accrued liabilities		1				1
Total derivatives not designated as hedges			$	2					$	2

• Derivative instruments within this category are subject to master netting arrangements and are presented on a net basis in the consolidated balance sheets in accordance with accounting guidance related to the offsetting of amounts related to certain contracts.

The fair value of Aptiv’s derivative financial instruments was in a net asset position as of December 31, 2017 and a net liability position as of December 31, 2016.

Effect of Derivatives on the Statement of Operations and Statement of Comprehensive Income

The pre-tax effect of derivative financial instruments in the consolidated statement of operations and consolidated statement of comprehensive income for the year ended December 31, 2017 is as follows:

Year Ended December 31, 2017	Gain (Loss) Recognized in OCI (Effective Portion)				Gain (Loss) Reclassified from OCI into Income (Effective Portion)				Gain Recognized in Income (Ineffective Portion Excluded from Effectiveness Testing)
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	45			$	18			$	—
Foreign currency derivatives	4				(27		)		—
Derivatives designated as net investment hedges:
Foreign currency derivatives	(34		)		2				—
Total	$	15			$	(7	)		$	—

	Loss Recognized in Income
	(in millions)
Derivatives not designated:
Commodity derivatives	$	—
Foreign currency derivatives	(5		)
Total	$	(5	)

The pre-tax effect of derivative financial instruments in the consolidated statement of operations and consolidated statement of comprehensive income for the year ended December 31, 2016 is as follows:

Year Ended December 31, 2016	Gain (Loss) Recognized in OCI (Effective Portion)				Loss Reclassified from OCI into Income (Effective Portion)				Gain Recognized in Income (Ineffective Portion Excluded from Effectiveness Testing)
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	22			$	(42	)		$	—
Foreign currency derivatives	(62		)		(84		)		—
Derivatives designated as net investment hedges:
Foreign currency derivatives	16				—				—
Total	$	(24	)		$	(126	)		$	—

	Gain Recognized in Income
	(in millions)
Derivatives not designated:
Commodity derivatives	$	—
Foreign currency derivatives	1
Total	$	1

The pre-tax effect of derivative financial instruments in the consolidated statement of operations and consolidated statement of comprehensive income for the year ended December 31, 2015 is as follows:

Year Ended December 31, 2015	Loss Recognized in OCI (Effective Portion)				Loss Reclassified from OCI into Income (Effective Portion)				Gain Recognized in Income (Ineffective Portion Excluded from Effectiveness Testing)
	(in millions)
Derivatives designated as cash flow hedges:
Commodity derivatives	$	(69	)		$	(42	)		$	—
Foreign currency derivatives	(79		)		(71		)		—
Total	$	(148	)		$	(113	)		$	—

	Loss Recognized in Income
	(in millions)
Derivatives not designated:
Commodity derivatives	$	(3	)
Foreign currency derivatives	(20		)
Total	$	(23	)

The gain or loss reclassified from OCI into income for the effective portion of designated derivative instruments and the gain or loss recognized in income for the ineffective portion of designated derivative instruments excluded from effectiveness testing were recorded to other income, net and cost of goods sold in the consolidated statements of operations for the years ended December 31, 2017, 2016 and 2015. The gain or loss recognized in income for non-designated derivative instruments was recorded in other income (expense), net and cost of goods sold for the years ended December 31, 2017, 2016 and 2015.

18. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market

participants on the measurement date. Fair value measurements are based on one or more of the following three valuation techniques:

Market—This approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income—This approach uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.

Cost—This approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).

Aptiv uses the following fair value hierarchy prescribed by GAAP, which prioritizes the inputs used to measure fair value as follows:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Typically, assets and liabilities are considered to be fair valued on a recurring basis if fair value is measured regularly. However, if the fair value measurement of an instrument does not necessarily result in a change in the amount recorded on the consolidated balance sheet, assets and liabilities are considered to be fair valued on a nonrecurring basis. This generally occurs when accounting guidance requires assets and liabilities to be recorded at the lower of cost or fair value, or assessed for impairment.

Fair Value Measurements on a Recurring Basis

Derivative instruments—All derivative instruments are required to be reported on the balance sheet at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria. Aptiv’s derivative exposures are with counterparties with long-term investment grade credit ratings. Aptiv estimates the fair value of its derivative contracts using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. Aptiv also considers the risk of non-performance in the estimation of fair value, and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. The non-performance risk adjustment reflects the credit default spread (“CDS”) applied to the net commodity by counterparty and foreign currency exposures by counterparty. When Aptiv is in a net derivative asset position, the counterparty CDS rates are applied to the net derivative asset position. When Aptiv is in a net derivative liability position, estimates of peer companies’ CDS rates are applied to the net derivative liability position.

In certain instances where market data is not available, Aptiv uses management judgment to develop assumptions that are used to determine fair value. This could include situations of market illiquidity for a particular currency or commodity or where observable market data may be limited. In those situations, Aptiv generally surveys investment banks and/or brokers and utilizes the surveyed prices and rates in estimating fair value.

As of December 31, 2017 and 2016, Aptiv was in a net derivative asset (liability) position of $12 million and $(37) million, respectively, and no significant adjustments were recorded for nonperformance risk based on the application of peer companies’ CDS rates, evaluation of our own nonperformance risk and because Aptiv’s exposures were to counterparties with investment grade credit ratings. Refer to Note 17. Derivatives and Hedging Activities for further information regarding derivatives.

Contingent consideration—As described in Note 20. Acquisitions and Divestitures, as of December 31, 2017, additional contingent consideration may be earned as a result of Aptiv's acquisition agreements for nuTonomy, Inc. ("nuTonomy"), Movimento Group ("Movimento"), Control-Tec LLC ("Control-Tec") and Ottomatika, Inc. ("Ottomatika"). The liability for contingent consideration is estimated as of the date of the acquisition and is recorded as part of the purchase price, and is subsequently re-measured to fair value at each reporting date based on a probability-weighted discounted cash flow analysis using a rate that reflects the uncertainty surrounding the expected outcomes, which the Company believes is appropriate and representative of market participant assumptions. The measurement of the liability for contingent consideration is based on significant inputs that are not observable in the market, and is therefore classified as a Level 3 measurement in accordance with ASU Topic 820-10-35. Examples of utilized unobservable inputs are estimated future earnings of the acquired businesses and applicable discount rates. The estimate of the liability may fluctuate if there are changes in the forecast of the acquired

businesses' future earnings, as a result of actual earnings levels achieved or in the discount rates used to determine the present value of contingent future cash flows. As of December 31, 2017, the range of periods in which the earn-out provisions may be achieved is from 2018 to 2020. The Company regularly reviews these assumptions, and makes adjustments to the fair value measurements as required by facts and circumstances.

As of December 31, 2017 and 2016, the liability for contingent consideration was $33 million (of which $7 million was classified within other current liabilities and $26 million was classified within other long-term liabilities) and $35 million (of which $22 million was classified within other current liabilities and $13 million which was classified within other long-term liabilities). Adjustments to this liability for interest accretion are recognized in interest expense, and any other changes in the fair value of this liability are recognized within other income (expense), net in the consolidated statement of operations.

The changes in the contingent consideration liability classified as a Level 3 measurement were as follows:

	Year Ended December 31,
	2017				2016
	(in millions)
Fair value at beginning of year	$	35			$	32
Additions	32				—
Payments	(22		)		(2		)
Interest accretion	2				2
Measurement adjustments	(14		)		3
Fair value at end of year	$	33			$	35

During the year ended December 31, 2017, Aptiv recorded liabilities of $32 million for the estimated fair values of contingent consideration related to our acquisitions, as further described in Note 20. Acquisitions and Divestitures. Also during the year ended December 31, 2017, the Company paid $22 million of contingent consideration and recorded reductions to our contingent consideration liabilities of $14 million based on the actual level of earnings and the forecasted future earnings of the acquired businesses during the contractual earn-out period.

During the year ended December 31, 2016, Aptiv paid $2 million of contingent consideration and recorded a net increase to our contingent consideration liabilities of $3 million based on the actual level of earnings and the forecasted future earnings of the acquired businesses during the contractual earn-out period.

As of December 31, 2017 and 2016, Aptiv had the following assets measured at fair value on a recurring basis:

	Total				Quoted Prices in Active Markets Level 1				Significant Other Observable Inputs Level 2				Significant Unobservable Inputs Level 3
	(in millions)
As of December 31, 2017
Commodity derivatives	$	35			$	—			$	35			$	—
Foreign currency derivatives	3				—				3				—
Total	$	38			$	—			$	38			$	—
As of December 31, 2016
Commodity derivatives	$	11			$	—			$	11			$	—
Foreign currency derivatives	8				—				8				—
Total	$	19			$	—			$	19			$	—

As of December 31, 2017 and 2016, Aptiv had the following liabilities measured at fair value on a recurring basis:

	Total				Quoted Prices in Active Markets Level 1				Significant Other Observable Inputs Level 2				Significant Unobservable Inputs Level 3
	(in millions)
As of December 31, 2017
Commodity derivatives	$	—			$	—			$	—			$	—
Foreign currency derivatives	26				—				26				—
Contingent consideration	33				—				—				33
Total	$	59			$	—			$	26			$	33
As of December 31, 2016
Commodity derivatives	$	—			$	—			$	—			$	—
Foreign currency derivatives	56				—				56				—
Contingent consideration	35				—				—				35
Total	$	91			$	—			$	56			$	35

Non-derivative financial instruments—Aptiv’s non-derivative financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable, as well as debt, which consists of its accounts receivable factoring arrangement, capital leases and other debt issued by Aptiv’s non-U.S. subsidiaries, the Revolving Credit Facility, the Tranche A Term Loan and all series of outstanding senior notes. The fair value of debt is based on quoted market prices for instruments with public market data or significant other observable inputs for instruments without a quoted public market price (Level 2). As of December 31, 2017 and December 31, 2016, total debt was recorded at $4,149 million and $3,963 million, respectively, and had estimated fair values of $4,289 million and $3,999 million, respectively. For all other financial instruments recorded at December 31, 2017 and December 31, 2016, fair value approximates book value.

Fair Value Measurements on a Nonrecurring Basis

In addition to items that are measured at fair value on a recurring basis, Aptiv also has items in its balance sheet that are measured at fair value on a nonrecurring basis. As these items are not measured at fair value on a recurring basis, they are not included in the tables above. Nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include certain long-lived assets, equity and cost method investments, intangible assets, asset retirement obligations, share-based compensation and liabilities for exit or disposal activities measured at fair value upon initial recognition. During the years ended December 31, 2017, 2016 and 2015, Aptiv recorded non-cash asset impairment charges of $9 million, $1 million and $7 million, respectively, in cost of sales related to declines in the fair values of certain fixed assets. Fair value of long-lived assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals. As such, Aptiv has determined that the fair value measurements of long-lived assets fall in Level 3 of the fair value hierarchy.

Additionally, as further described in Note 25. Discontinued Operations, an after-tax impairment loss of approximately $88 million was recorded in income from discontinued operations in the first quarter of 2015 based on the evaluation and estimate of the fair value of the Company's interest in KDAC of approximately $32 million, which was determined primarily

based on negotiations with a third party and on a non-binding offer from that potential buyer at the time, in relation to the carrying value of this interest. Subsequently, in September 2015 the Company closed the sale of this interest for net cash proceeds of $70 million. As a result, for the year ended December 31, 2015, the Company recorded a net loss of $41 million on the KDAC divestiture within income from discontinued operations, which includes the $88 million impairment loss recorded in the first quarter of 2015.

19. OTHER INCOME, NET

Other income (expense), net included:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Interest income	$	7			$	1			$	5
Loss on extinguishment of debt	—				(73		)		(58		)
Components of net periodic benefit cost other than service cost	(32		)		(18		)		(26		)
Reserve for Unsecured Creditors litigation	(10		)		(300		)		—
Costs associated with acquisitions	(8		)		—				(40		)
Contingent consideration liability fair value adjustment	14				(3		)		7
Other, net	8				9				(2		)
Other expense, net	$	(21	)		$	(384	)		$	(114	)

As further discussed in Note 13. Commitments and Contingencies, during the three months ended June 30, 2017, Aptiv and the plaintiffs reached an agreement to settle the Unsecured Creditors litigation for $310 million, which was subsequently approved by the Bankruptcy Court. In July 2017, the Company paid the $310 million settlement pursuant to the terms of the settlement agreement. In accordance with the terms of the settlement agreement, the Company recorded a net incremental charge of $10 million to its previously recorded reserve of $300 million to other expense during the year ended December 31, 2017. Also during the year ended December 31, 2017, Aptiv incurred approximately $8 million in transaction costs related to the acquisition of nuTonomy.

During the year ended December 31, 2016, Aptiv recorded a reserve of $300 million for the Unsecured Creditors litigation. As further discussed in Note 11. Debt, during the year ended December 31, 2016, Aptiv redeemed for cash the entire $800 million aggregate principal amount outstanding of the 2013 Senior Notes, resulting in a loss on debt extinguishment of approximately $70 million. Aptiv also recorded a loss on debt extinguishment of $3 million during the year ended December 31, 2016 in conjunction with the 2016 amendment to the Credit Agreement, as further discussed in Note 11. Debt. Additionally, as further discussed in Note 25. Discontinued Operations, during the year ended December 31, 2016, Aptiv recorded $8 million for certain fees earned pursuant to the transition services agreement in connection with the sale of the Company's wholly owned Thermal Systems business.

During the year ended December 31, 2015, as further discussed in Note 11. Debt, Aptiv redeemed for cash the entire aggregate principal amount outstanding of the 6.125% Senior Notes and, as further discussed in Note 20. Acquisitions and Divestitures, canceled the Senior Bridge Credit Agreement, resulting in losses on extinguishment of debt of approximately $52 million and $6 million, respectively. During the year ended December 31, 2015, Aptiv incurred approximately $23 million in transaction costs related to the acquisition of HellermannTyton and, as further discussed in Note 17. Derivatives and Hedging Activities, recorded a loss of $15 million on option contracts entered into in order to hedge portions of the currency risk associated with the acquisition of HellermannTyton, which are reflected within costs associated with acquisitions in the above table. Also during the year ended December 31, 2015, Aptiv recorded $8 million for certain fees earned pursuant to the transition services agreement in connection with the sale of the Company's wholly owned Thermal Systems business.

20. ACQUISITIONS AND DIVESTITURES

Acquisition of nuTonomy

On November 21, 2017, Aptiv acquired 100% of the equity interests of nuTonomy, Inc. ("nuTonomy"), a leading provider of autonomous driving software and technology, for total consideration of up to $454 million. Of the total consideration, $284 million of purchase price was paid at closing, subject to certain post-closing adjustments. An additional $109 million of the purchase price will vest to certain selling shareholders in annual installments over a three-year period from the acquisition date,

subject to such shareholders' compliance with certain employment conditions. Of the $109 million, approximately $7 million is payable after one year and approximately $51 million is payable after each of the second and third years following the acquisition date. These remaining installments will be recorded as a component of selling, general and administrative expense ratably over the respective installment period.

Additionally, the total consideration includes a cash payment of up to $54 million, contingent upon the achievement of certain performance metrics over a future three-year period. The range of the undiscounted amounts the Company could be required to pay under this arrangement is between $0 and $54 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $24 million. Refer to Note 15. Fair Value of Financial Instruments for additional information regarding the measurement of the contingent consideration liability. The results of operations of nuTonomy are reported within the Advanced Safety and User Experience segment from the date of acquisition. The Company acquired nuTonomy utilizing cash on hand.

The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2017. The purchase price and related allocation to the acquired net assets of nuTonomy based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration, net of cash acquired	$	284
Purchase price, fair value of contingent consideration	24
Total purchase price, net of cash acquired	$	308
Intangible assets	$	102
Other liabilities, net	(40		)
Identifiable net assets acquired	62
Goodwill resulting from purchase	246
Total purchase price allocation	$	308

Goodwill recognized in this transaction is primarily attributable to synergies expected to arise after the acquisition from future growth and potential commercialization opportunities. Intangible assets include $102 million of in-process research and development, which will not be amortized, but tested for impairment until the completion or abandonment of the associated research and development efforts. The estimated fair value of these assets was based on third-party valuations and management's estimates, generally utilizing income and market approaches.

The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.

The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented.

Acquisition of Movimento Group

On January 3, 2017, Aptiv acquired 100% of the equity interests of Movimento Group ("Movimento"), a leading provider of Over-the-Air software and data management for the automotive sector, for a purchase price of $40 million at closing and an additional cash payment of up to $10 million contingent upon the achievement of certain performance metrics over a future 2-year period. The range of the undiscounted amounts the Company could be required to pay under this arrangement is between $0 and $10 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $8 million. Refer to Note 15. Fair Value of Financial Instruments for additional information regarding the measurement of the contingent consideration liability. The results of operations of Movimento are reported within the Advanced Safety and User Experience segment from the date of acquisition. The Company acquired Movimento utilizing cash on hand.

The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the first quarter of 2017. The preliminary purchase price and related allocation to the acquired net assets of Movimento based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration, net of cash acquired	$	40
Purchase price, fair value of contingent consideration	8
Total purchase price, net of cash acquired	$	48
Intangible assets	$	22
Other liabilities, net	(2		)
Identifiable net assets acquired	20
Goodwill resulting from purchase	28
Total purchase price allocation	$	48

Intangible assets include $8 million recognized for the fair value of the acquired trade name, which has an estimated useful life of approximately 25 years, $4 million of customer-based and technology-related assets with estimated useful lives of approximately 7 years, and $10 million of in-process research and development, which will not be amortized, but tested for impairment until the completion or abandonment of the associated research and development efforts. The estimated fair value of these assets was based on third-party valuations and management's estimates, generally utilizing income and market approaches.

The purchase price and related allocation are preliminary and could be revised as a result of adjustments made to the purchase price, additional information obtained regarding liabilities assumed, including, but not limited to, contingent liabilities, revisions of provisional estimates of fair values, including, but not limited to, the completion of independent appraisals and valuations related to property, plant and equipment and intangible assets, and certain tax attributes.

The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented.

Acquisition of PureDepth, Inc.

On March 23, 2016, Aptiv acquired 100% of the equity interests of PureDepth, Inc. ("PureDepth"), a leading provider of 3D display technology, for approximately $15 million. The results of operations of PureDepth are reported within the Advanced Safety and User Experience segment from the date of acquisition. The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the first quarter of 2016. The purchase price and related allocation were finalized in the first quarter of 2017, and resulted in no adjustments from the amounts previously disclosed. The purchase price and related allocation to the acquired net assets of PureDepth based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration	$	15
Intangible assets	$	10
Goodwill resulting from purchase	5
Total purchase price allocation	$	15

Intangible assets include amounts recognized for the fair value of in-process research and development, which will not be amortized, but tested for impairment until the completion or abandonment of the associated research and development efforts. The fair value of these assets was based on third-party valuations and management's estimates, generally utilizing income and market approaches.

The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented.

Acquisition of HellermannTyton Group PLC

On December 18, 2015, pursuant to the terms of a recommended offer made on July 30, 2015, Aptiv completed the acquisition of 100% of the issued ordinary share capital of HellermannTyton Group PLC ("HellermannTyton"), a public limited company based in the United Kingdom, and a leading global manufacturer of high-performance and innovative cable management solutions. Aptiv paid 480 pence per HellermannTyton share, totaling approximately $1.5 billion in aggregate, net of cash acquired. Approximately $242 million of HellermannTyton outstanding debt to third-party creditors was assumed and subsequently paid off.

HellermannTyton had 2014 sales of approximately €600 million (approximately 6% of which were to Aptiv and will be eliminated on a consolidated basis). Upon completing the acquisition, Aptiv incurred transaction related expenses totaling approximately $23 million, which were recorded within other income (expense), net in the statement of operations in the fourth quarter of 2015.

The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2015. The purchase price and related allocation were finalized in the fourth quarter of 2016. As a result of additional information obtained, changes to the preliminary fair values of certain property, plant and equipment and other assets purchased and liabilities assumed, including contingent tax liabilities, from the amounts disclosed as of December 31, 2015 were recorded during the year ended December 31, 2016, which resulted in a net adjustment to goodwill of $10 million. These adjustments did not result in significant effects to the consolidated statement of operations for the year ended December 31, 2016. The purchase price and related allocation to the acquired net assets of HellermannTyton based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration, net of cash acquired	$	1,534
Debt and pension liabilities assumed	258
Total consideration, net of cash acquired	$	1,792
Property, plant and equipment	$	326
Indefinite-lived intangible assets	128
Definite-lived intangible assets	554
Other liabilities, net	(82		)
Identifiable net assets acquired	926
Goodwill resulting from purchase	866
Total purchase price allocation	$	1,792

Goodwill recognized in this transaction is primarily attributable to synergies expected to arise after the acquisition and the assembled workforce of HellermannTyton, and is not deductible for tax purposes. Intangible assets primarily include $128 million recognized for the fair value of the acquired trade name, which has an indefinite useful life, $451 million of customer-based assets with approximate useful lives of 13 years and $103 million of technology-related assets with approximate useful lives of 13 years. The valuation of the intangible assets acquired was based on third-party valuations, management's estimates, available information and reasonable and supportable assumptions. The fair value of the acquired trade name and the technology-related assets was generally estimated utilizing the relief from royalty method under the income approach, and the fair value of customer-based assets was generally estimated utilizing the multi-period excess earnings method.

The results of operations of HellermannTyton are reported within the Signal and Power Solutions segment from the date of acquisition. The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented.

Acquisition financing

Aptiv financed the cash payment required to close the acquisition of HellermannTyton primarily with the net proceeds received from the offering of $1.3 billion of 2015 Senior Notes, as further described in Note 11. Debt, with the remainder of the purchase price funded with cash on hand that was received from the sale of the Company's Thermal Systems business, as further described below. Prior to the transaction closing, in connection with the offer to acquire HellermannTyton in July 2015, £540 million ($844 million using July 30, 2015 foreign currency rates) was placed on deposit for purposes of satisfying a portion of the consideration required to effect the acquisition.

Prior to the issuance of the 2015 Senior Notes, in connection with the offer to acquire HellermannTyton, on July 30, 2015, Aptiv PLC and certain of its subsidiaries, certain financial institutions from time to time party thereto, as lenders and

Barclays Bank PLC, as administrative agent, entered into a Senior Bridge Credit Agreement (the "Senior Bridge Credit Agreement"), pursuant to which the lenders thereunder agreed to provide a £550 million bridge term loan facility. The Senior Bridge Credit Agreement was automatically terminated on November 19, 2015 in connection with the issuance of the 2015 Senior Notes, and unamortized issuance costs of $6 million associated with the Senior Bridge Credit Agreement were written-off to other income (expense), net. The Company did not draw on the Senior Bridge Credit Agreement.

Acquisition of Control-Tec LLC

On November 30, 2015, Aptiv acquired 100% of the equity interests of Control-Tec LLC ("Control-Tec"), a leading provider of telematics and cloud-hosted data analytics solutions, for a purchase price of $104 million at closing and an additional cash payment of up to $40 million contingent upon the achievement of certain financial performance metrics over a future 3-year period. The range of the undiscounted amounts the Company could be required to pay under this arrangement is between $0 and $40 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $20 million. Refer to Note 18. Fair Value of Financial Instruments for additional information regarding the measurement of the contingent consideration liability. The results of operations of Control-Tec are reported within the Advanced Safety and User Experience segment from the date of acquisition. The Company acquired Control-Tec utilizing cash on hand.

The acquisition was accounted for as a business combination, with the total purchase price allocated on a preliminary basis using information available, in the fourth quarter of 2015. The purchase price and related allocation were finalized in the fourth quarter of 2016, and resulted in no adjustments from the amounts disclosed as of December 31, 2015. The purchase price and related allocation to the acquired net assets of Control-Tec based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration, net of cash acquired	$	104
Purchase price, fair value of contingent consideration	20
Total purchase price, net of cash acquired	$	124
Intangible assets	$	66
Other assets, net	4
Identifiable net assets acquired	70
Goodwill resulting from purchase	54
Total purchase price allocation	$	124

Intangible assets primarily include amounts recognized for the fair value of the acquired trade name as well as customer-based and technology-related assets, and will be amortized over their estimated useful lives of approximately 10 years. The fair value of these assets was based on third-party valuations and management's estimates, generally utilizing income and market approaches.

The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements were presented.

Acquisition of Ottomatika, Inc.

On July 23, 2015, Aptiv acquired 100% of the equity interests of Ottomatika, Inc. ("Ottomatika"), an automated vehicle software developer, for total consideration of $32 million. The Company paid $16 million at closing utilizing cash on hand, with additional cash payments totaling $11 million deferred over a period of 3 years and additional contingent consideration of up to $5 million due upon the achievement of certain product development milestones over a 3-year period. The range of the undiscounted amounts the Company could be required to pay is between $0 and $5 million. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $5 million. Refer to Note 18. Fair Value of Financial Instruments for additional information regarding the measurement of the contingent consideration liability. The results of operations of Ottomatika are reported within the Advanced Safety and User Experience segment from the date of acquisition. Aptiv previously held a convertible debt investment in Ottomatika, and as a result of this transaction recognized a gain on its previously held investment of $2 million within other income (expense), net in the consolidated statement of operations during the third quarter of 2015 as a result of remeasuring this investment to fair value.

The acquisition was accounted for as a business combination. The purchase price and related allocation to the acquired net assets of Ottomatika based on their estimated fair values is shown below (in millions):

Assets acquired and liabilities assumed

Purchase price, cash consideration	$	16
Purchase price, deferred consideration	11
Purchase price, fair value of contingent consideration	5
Fair value of previously held investment	4
Total purchase price	$	36
Indefinite-lived intangible assets	$	24
Definite-lived intangible assets	1
Other liabilities, net	(8		)
Identifiable net assets acquired	17
Goodwill resulting from purchase	19
Total purchase price allocation	$	36

Intangible assets include amounts recognized for the fair value of in-process research and development, which will not be amortized, but tested for impairment until the completion or abandonment of the associated research and development efforts, and non-competition agreements, which will be amortized over their estimated useful lives of approximately 4 years. The fair value of these assets was generally estimated utilizing income and market approaches.

The pro forma effects of this acquisition would not materially impact the Company's reported results for any period presented, and as a result no pro forma financial statements are presented.

Sale of Mechatronics Business

On December 30, 2016, Aptiv completed the sale of its Mechatronics business, which was previously reported within the Advanced Safety and User Experience segment, for net cash proceeds of approximately $197 million. The net sales of this business in 2016 prior to the divestiture were approximately $290 million. Aptiv recognized a pre-tax gain on the divestiture of $141 million, net of $29 million of accumulated currency translation losses transferred from accumulated other comprehensive income, which is included in cost of sales in the consolidated statement of operations. The gain on the divestiture, net of tax, was $124 million, resulting in an increase in earnings per diluted share of approximately $0.45 for the year ended December 31, 2016. The results of operations of this business were not significant to the consolidated financial statements for any period presented, and the divestiture did not meet the discontinued operations criteria.

Exit of Argentina Businesses

On December 10, 2015, Aptiv completed the exit of its Electronics business located in Argentina, which was previously reported within the Advanced Safety and User Experience segment. The net sales of this business in 2015 prior to the divestiture were approximately $34 million. Aptiv recognized a pre-tax loss on the divestiture of this business of $33 million within cost of sales in the fourth quarter of 2015, which included a cash payment by Aptiv to the buyer of $7 million.

On April 21, 2015, Aptiv completed the exit of its Electrical Wiring business located in Argentina, which was previously reported within the Signal and Power Solutions segment. Aptiv recognized a pre-tax loss on the divestiture of this business of $14 million within cost of sales in the second quarter of 2015, which included a cash payment by Aptiv to the buyer of $7 million.

The results of operations of these businesses, including the losses on divestiture, were not significant to the consolidated financial statements for any period presented, and the disposals did not meet the discontinued operations criteria.

Sale of Reception Systems Business

On July 31, 2015, Aptiv completed the sale of its Reception Systems business for net cash proceeds of approximately $25 million and $39 million of buyer-assumed pension liabilities. The net sales of this business, which was previously reported within the Advanced Safety and User Experience segment, were approximately $55 million for the six months ended June 30, 2015. Aptiv recognized a pre-tax gain on the divestiture of $39 million, which is included in cost of sales in the consolidated

statement of operations. The results of operations of this business, including the gain on divestiture, were not significant to the consolidated financial statements for any period presented, and the divestiture did not meet the discontinued operations criteria.

Sale of Thermal Systems Business

On June 30, 2015, Aptiv completed the sale of the Company's wholly owned Thermal Systems business. On September 24, 2015, Aptiv completed the sale of its interest in its KDAC joint venture, and on March 31, 2016, Aptiv completed the sale of its interest in its SDAAC joint venture. Aptiv's interests in the SDAAC and KDAC joint ventures were previously reported within the Thermal Systems segment. Accordingly, the results of the Thermal Systems business are classified as discontinued operations for all periods presented. Refer to Note 25. Discontinued Operations for further disclosure related to the Company's discontinued operations, including details of the divestiture transactions.

Technology Investments

The Company has made technology investments in certain non-consolidated affiliates for ownership interests of less than 20%, which are accounted for under the cost method.

During the third quarter of 2017, the Company's Advanced Safety and User Experience segment made investments in two leading developers of Light Detection and Ranging (“LIDAR”) technology, a $15 million investment in Innoviz Technologies and a $10 million investment in LeddarTech, Inc.

During the second quarter of 2017, the Company's Signal and Power Solutions segment made a $10 million investment in Valens Semiconductor Ltd., a leading provider of signal processing technology for high frequency data transmission of connected car content. During the first quarter of 2017, the Company's Advanced Safety and User Experience segment made a $15 million investment in Otonomo Technologies Ltd., the developer of a connected car data marketplace.

Refer to Note 5. Investments in Affiliates for further information regarding the Company's technology investments.

21. SHARE-BASED COMPENSATION

Long Term Incentive Plan

The PLC LTIP allows for the grant of awards of up to 25,665,448 ordinary shares for long-term compensation. The PLC LTIP is designed to align the interests of management and shareholders. The awards can be in the form of shares, options, stock appreciation rights, restricted stock, RSUs, performance awards, and other share-based awards to the employees, directors, consultants and advisors of the Company. The Company has awarded annual long-term grants of RSUs under the PLC LTIP in each year from 2012 to 2017 in order to align management compensation with Aptiv's overall business strategy. The Company has competitive and market-appropriate ownership requirements. All of the RSUs granted under the PLC LTIP are eligible to receive dividend equivalents for any dividend paid from the grant date through the vesting date. Dividend equivalents are generally paid out in ordinary shares upon vesting of the underlying RSUs. Historical amounts disclosed within this note include amounts attributable to the Company's discontinued operations, unless otherwise noted, and for activity prior to December 4, 2017 represent awards based on shares of Delphi Automotive PLC.

In connection with the Separation, the Company made adjustments to the number of unvested RSUs with the intention of preserving the intrinsic value of the recipient's awards prior to the Separation. Accordingly, the number of RSUs underlying each unvested award outstanding as of the date of the Separation was multiplied by a factor of 1.17, and the related grant date fair value was divided by a factor of 1.17, which resulted in no increase in the intrinsic value of awards outstanding. The RSUs continue to vest in accordance with their original vesting period. These adjustments to the Company’s share-based compensation awards did not result in additional compensation expense.

RSUs that were held by employees who transferred to Delphi Technologies in connection with the Separation were canceled and replaced by awards issued by Delphi Technologies. Employees remaining with the Company did not receive share-based compensation awards of Delphi Technologies as a result of the spin-off. Except for the conversion of awards, the material terms of the awards remained unchanged.

Board of Director Awards

On April 3, 2014, Aptiv granted 24,144 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 3, 2014. The RSUs vested on April 22, 2015, and 24,482 ordinary shares, which included shares issued in connection with dividend equivalents, were issued to members of the Board of Directors at a fair value of approximately $2 million. 2,673 ordinary shares were withheld to cover the minimum U.K. withholding taxes.

On April 23, 2015, Aptiv granted 20,347 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 23, 2015. The RSUs vested on April 27, 2016, and 24,542 ordinary shares, which included shares issued in connection with dividend equivalents, were issued to members of the Board of Directors at a fair value of approximately $2 million. 1,843 ordinary shares were withheld to cover the minimum U.K. withholding taxes.

On April 28, 2016, Aptiv granted 27,238 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 28, 2016. The RSUs vested on April 26, 2017, and 26,580 ordinary shares, which included shares issued in connection with dividend equivalents, were issued to members of the Board of Directors at a fair value of approximately $2 million. 3,472 ordinary shares were withheld to cover the minimum U.K. withholding taxes.

On April 27, 2017, Aptiv granted 26,782 RSUs to the Board of Directors at a grant date fair value of approximately $2 million. The grant date fair value was determined based on the closing price of the Company's ordinary shares on April 27, 2017. The RSUs will vest on April 25, 2018, the day before the 2018 annual meeting of shareholders.

Executive Awards

Aptiv has made annual grants of RSUs to its executives in February of each year beginning in 2012. These awards include a time-based vesting portion and a performance-based vesting portion, as well as continuity awards in certain years. The time-based RSUs, which make up 25% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest ratably over three years beginning on the first anniversary of the grant date. The performance-based RSUs, which make up 75% of the awards for Aptiv’s officers and 50% for Aptiv’s other executives, vest at the completion of a three-year performance period if certain targets are met. Each executive will receive between 0% and 200% of his or her target performance-based award based on the Company’s performance against established company-wide performance metrics, which are:

Metric	2016 - 2017 Grant			2013 - 2015 Grants
Average return on net assets (1)	50%			50%
Cumulative net income	25%			N/A
Cumulative earnings per share (2)	N/A			30%
Relative total shareholder return (3)	25%			20%

(1)	Average return on net assets is measured by tax-affected operating income divided by average net working capital plus average net property, plant and equipment for each calendar year during the respective performance period.

(2)	Cumulative earnings per share is measured by net income attributable to Aptiv divided by the weighted average number of diluted shares outstanding for the respective three-year performance period.

(3)

Relative total shareholder return is measured by comparing the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the end of the performance period to the average closing price per share of the Company’s ordinary shares for all available trading days in the fourth quarter of the year preceding the grant, including dividends, and assessed against a comparable measure of competitor and peer group companies.

The details of the executive grants were as follows:

Grant Date		RSUs Granted			Grant Date Fair Value				Time-Based Award Vesting Dates		Performance-Based Award Vesting Date
		(in millions)
February 2013		1.45			$	60			Annually on anniversary of grant date, 2014 - 2016		December 31, 2015
February 2014		0.78			53				Annually on anniversary of grant date, 2015 - 2017		December 31, 2016
February 2015		0.90			76				Annually on anniversary of grant date, 2016 - 2018		December 31, 2017
February 2016		0.71			48				Annually on anniversary of grant date, 2017 - 2019		December 31, 2018
February 2017		0.80			63				Annually on anniversary of grant date, 2018 - 2020		December 31, 2019

Any new executives hired after the annual executive RSU grant date may be eligible to participate in the PLC LTIP. Any off cycle grants made for new hires are valued at their grant date fair value based on the closing price of the Company's ordinary shares on the date of such grant.

The grant date fair value of the RSUs is determined based on the target number of awards issued, the closing price of the Company’s ordinary shares on the date of the grant of the award, including an estimate for forfeitures, and a contemporaneous valuation performed by an independent valuation specialist with respect to the relative total shareholder return awards.

In February 2015, under the time-based vesting terms of the 2012, 2013 and 2014 grants, 535,345 ordinary shares were issued to Aptiv executives at a fair value of approximately $42 million, of which 199,211 ordinary shares were withheld to cover minimum withholding taxes. The performance-based RSUs associated with the 2012 grant vested at the completion of a three-year performance period on December 31, 2014, and in the first quarter of 2015, 1,364,966 ordinary shares were issued to executives at a fair value of $107 million, of which 545,192 ordinary shares were withheld to cover minimum withholding taxes.

In February 2016, under the time-based vesting terms of the 2013, 2014 and 2015 grants, 395,744 ordinary shares were issued to Aptiv executives at a fair value of approximately $24 million, of which 146,726 ordinary shares were withheld to cover minimum withholding taxes. The performance-based RSUs associated with the 2013 grant vested at the completion of a three-year performance period on December 31, 2015, and in the first quarter of 2016, 1,265,339 ordinary shares were issued to executives at a fair value of approximately $77 million, of which 512,371 ordinary shares were withheld to cover minimum withholding taxes.

In February 2017, under the time-based vesting terms of the 2014, 2015 and 2016 grants, 248,008 ordinary shares were issued to Aptiv executives at a fair value of approximately $19 million, of which 88,807 ordinary shares were withheld to cover minimum withholding taxes. The performance-based RSUs associated with the 2014 grant vested at the completion of a three-year performance period on December 31, 2016, and in the first quarter of 2017, 797,210 ordinary shares were issued to executives at a fair value of approximately $60 million, of which 324,555 ordinary shares were withheld to cover minimum withholding taxes.

A summary of RSU activity, including award grants, vesting and forfeitures is provided below. For periods prior to the Separation, RSU activity and the corresponding weighted average grant date fair value is presented based on the awards of Delphi Automotive PLC RSUs.

	RSUs			Weighted Average Grant Date Fair Value
	(in thousands)
Nonvested, January 1, 2015	2,274			$	50.38
Granted	1,683			72.30
Vested	(1,774	)		42.45
Forfeited	(203	)		64.75
Nonvested, December 31, 2015	1,980			74.66
Granted	1,219			68.35
Vested	(1,241	)		65.91
Forfeited	(218	)		74.10
Nonvested, December 31, 2016	1,740			76.54
Granted	1,245			82.02
Vested	(980	)		73.01
Forfeited	(195	)		76.18
Adjustment due to Delphi Technologies Separation (1)	(3	)
Nonvested, December 31, 2017 (2)	1,807			68.66

(1)	Reflects the cancellation of awards outstanding as of the Distribution Date held by Delphi Technologies employees, which were converted to Delphi Technologies RSUs as part of the Separation, and the conversion of unvested RSUs for Aptiv employees in accordance with the conversion factor described above.

(2)	Nonvested RSUs and the corresponding weighted average grant date fair value as of December 31, 2017 presented on an Aptiv basis using the conversion factor described above in connection with the Separation.

As of December 31, 2017, there were approximately 618,000 Aptiv performance-based RSUs, with a weighted average grant date fair value of $72.20, that were vested but not yet distributed.

Aptiv recognized compensation expense from continuing operations of $62 million ($56 million, net of tax), $62 million ($54 million, net of tax) and $67 million ($58 million net of tax) based on the Company’s best estimate of ultimate performance against the respective targets during the years ended December 31, 2017, 2016 and 2015, respectively. Aptiv will continue to recognize compensation expense, based on the grant date fair value of the awards applied to the Company’s best estimate of ultimate performance against the respective targets, over the requisite vesting periods of the awards. Based on the grant date fair value of the awards and the Company’s best estimate of ultimate performance against the respective targets as of December 31, 2017, unrecognized compensation expense on a pretax basis of approximately $64 million is anticipated to be

recognized over a weighted average period of approximately 2 years. For the years ended December 31, 2017, 2016 and 2015, respectively, approximately $33 million, $40 million, and $59 million of cash was paid and reflected as a financing activity in the statements of cash flows related to the minimum statutory tax withholding for vested RSUs.

22. SUPPLEMENTAL GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Basis of Presentation

Notes Issued by the Subsidiary Issuer

As described in Note 11. Debt, Delphi Corporation (the "Subsidiary Issuer/Guarantor"), a 100% owned subsidiary of Aptiv PLC (the "Parent"), issued the 2013 Senior Notes and the 2014 Senior Notes, both of which were registered under the Securities Act, and is the borrower of obligations under the Credit Agreement. The 2013 Senior Notes were subsequently redeemed and extinguished in September 2016. The 2014 Senior Notes and obligations under the Credit Agreement are, and prior to their redemption, the 2013 Senior Notes were, fully and unconditionally guaranteed by Aptiv PLC and certain of Aptiv PLC's direct and indirect subsidiary companies, which are directly or indirectly 100% owned by Aptiv PLC (the “Subsidiary Guarantors”), on a joint and several basis, subject to customary release provisions (other than in the case of Aptiv PLC). All other consolidated direct and indirect subsidiaries of Aptiv PLC are not subject to the guarantees (“Non-Guarantor Subsidiaries”).

Notes Issued by the Parent

As described in Note 11. Debt, Aptiv PLC issued the 2015 Senior Notes, the 2015 Euro-denominated Senior Notes, the 2016 Euro-denominated Senior Notes and the 2016 Senior Notes, each of which were registered under the Securities Act. Each series of these senior notes are fully and unconditionally guaranteed on a joint and several basis, subject to customary release provisions, by certain of Aptiv PLC's direct and indirect subsidiary companies (the “Subsidiary Guarantors”), and Delphi Corporation, each of which are directly or indirectly 100% owned by Aptiv PLC. All other consolidated direct and indirect subsidiaries of Aptiv PLC are not subject to the guarantees (“Non-Guarantor Subsidiaries”).

In lieu of providing separate audited financial statements for the Guarantors, the Company has included the accompanying condensed consolidating financial statements. These condensed consolidating financial statements are presented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the parent’s share of the subsidiary’s cumulative results of operations, capital contributions and distributions and other equity changes. The Non-Guarantor Subsidiaries are combined in the condensed consolidating financial statements. The principal elimination entries are to eliminate the investments in subsidiaries and intercompany balances and transactions.

Statement of Operations Year Ended December 31, 2017

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net sales	$	—			$	—			$	—			$	12,884			$	—			$	12,884
Operating expenses:
Cost of sales	—				—				—				10,270				—				10,270
Selling, general and administrative	137				—				—				815				—				952
Amortization	—				—				—				117				—				117
Restructuring	—				—				—				129				—				129
Total operating expenses	137				—				—				11,331				—				11,468
Operating (loss) income	(137		)		—				—				1,553				—				1,416
Interest (expense) income	(255		)		(24		)		(174		)		(11		)		324				(140		)
Other (expense) income, net	—				144				13				146				(324		)		(21		)
(Loss) income from continuing operations before income taxes and equity income	(392		)		120				(161		)		1,688				—				1,255
Income tax benefit (expense)	—				—				59				(282		)		—				(223		)
(Loss) income from continuing operations before equity income	(392		)		120				(102		)		1,406				—				1,032
Equity in net income of affiliates	—				—				—				31				—				31
Equity in net income (loss) of subsidiaries	1,747				1,565				56				—				(3,368		)		—
Income (loss) from continuing operations	1,355				1,685				(46		)		1,437				(3,368		)		1,063
Income from discontinued operations, net of tax	—				—				—				365				—				365
Net income (loss)	1,355				1,685				(46		)		1,802				(3,368		)		1,428
Net income attributable to noncontrolling interest	—				—				—				73				—				73
Net income (loss) attributable to Aptiv	$	1,355			$	1,685			$	(46	)		$	1,729			$	(3,368	)		$	1,355

Statement of Operations Year Ended December 31, 2016

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net sales	$	—			$	—			$	—			$	12,274			$	—			$	12,274
Operating expenses:
Cost of sales	—				—				—				9,527				—				9,527
Selling, general and administrative	87				—				—				837				—				924
Amortization	—				—				—				117				—				117
Restructuring	—				—				—				167				—				167
Total operating expenses	87				—				—				10,648				—				10,735
Operating (loss) income	(87		)		—				—				1,626				—				1,539
Interest (expense) income	(208		)		(23		)		(202		)		(67		)		345				(155		)
Other (expense) income, net	(5		)		(163		)		(11		)		140				(345		)		(384		)
(Loss) income from continuing operations before income taxes and equity income	(300		)		(186		)		(213		)		1,699				—				1,000
Income tax benefit (expense)	60				—				78				(305		)		—				(167		)
(Loss) income from continuing operations before equity income	(240		)		(186		)		(135		)		1,394				—				833
Equity in net income of affiliates	—				—				—				35				—				35
Equity in net income (loss) of subsidiaries	1,497				1,621				406				—				(3,524		)		—
Income (loss) from continuing operations	1,257				1,435				271				1,429				(3,524		)		868
Income from discontinued operations, net of tax	—				—				—				458				—				458
Net income (loss)	1,257				1,435				271				1,887				(3,524		)		1,326
Net income attributable to noncontrolling interest	—				—				—				69				—				69
Net income (loss) attributable to Aptiv	$	1,257			$	1,435			$	271			$	1,818			$	(3,524	)		$	1,257

Statement of Operations Year Ended December 31, 2015

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net sales	$	—			$	—			$	—			$	10,864			$	—			$	10,864
Operating expenses:
Cost of sales	—				—				(6		)		8,697				—				8,691
Selling, general and administrative	32				—				—				771				—				803
Amortization	—				—				—				70				—				70
Restructuring	—				—				—				65				—				65
Total operating expenses	32				—				(6		)		9,603				—				9,629
Operating (loss) income	(32		)		—				6				1,261				—				1,235
Interest (expense) income	(105		)		(30		)		(180		)		(87		)		278				(124		)
Other (expense) income, net	(20		)		89				18				77				(278		)		(114		)
(Loss) income from continuing operations before income taxes and equity income	(157		)		59				(156		)		1,251				—				997
Income tax benefit (expense)	—				—				57				(218		)		—				(161		)
(Loss) income from continuing operations before equity income	(157		)		59				(99		)		1,033				—				836
Equity in net income of affiliates	—				—				—				16				—				16
Equity in net income (loss) of subsidiaries	1,607				1,548				508				—				(3,663		)		—
Income (loss) from continuing operations	1,450				1,607				409				1,049				(3,663		)		852
Income from discontinued operations, net of tax	—				—				—				683				—				683
Net income (loss)	1,450				1,607				409				1,732				(3,663		)		1,535
Net income attributable to noncontrolling interest	—				—				—				85				—				85
Net income (loss) attributable to Aptiv	$	1,450			$	1,607			$	409			$	1,647			$	(3,663	)		$	1,450

Statement of Comprehensive Income Year Ended December 31, 2017

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net income (loss)	$	1,355			$	1,685			$	(46	)		$	1,802			$	(3,368	)		$	1,428
Other comprehensive income (loss):
Currency translation adjustments	(177		)		—				—				492				—				315
Net change in unrecognized gain (loss) on derivative instruments, net of tax	—				—				—				15				—				15
Employee benefit plans adjustment, net of tax	—				—				—				11				—				11
Other comprehensive income (loss)	(177		)		—				—				518				—				341
Equity in other comprehensive (loss) income of subsidiaries	508				(218		)		31				—				(321		)		—
Comprehensive income (loss)	1,686				1,467				(15		)		2,320				(3,689		)		1,769
Comprehensive income attributable to noncontrolling interests	—				—				—				83				—				83
Comprehensive income (loss) attributable to Aptiv	$	1,686			$	1,467			$	(15	)		$	2,237			$	(3,689	)		$	1,686

Statement of Comprehensive Income Year Ended December 31, 2016

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net income (loss)	$	1,257			$	1,435			$	271			$	1,887			$	(3,524	)		$	1,326
Other comprehensive income (loss):
Currency translation adjustments	65				—				—				(212		)		—				(147		)
Net change in unrecognized gain (loss) on derivative instruments, net of tax	—				—				—				95				—				95
Employee benefit plans adjustment, net of tax	—				—				—				(139		)		—				(139		)
Other comprehensive income (loss)	65				—				—				(256		)		—				(191		)
Equity in other comprehensive (loss) income of subsidiaries	(247		)		(371		)		2				—				616				—
Comprehensive income (loss)	1,075				1,064				273				1,631				(2,908		)		1,135
Comprehensive income attributable to noncontrolling interests	—				—				—				60				—				60
Comprehensive income (loss) attributable to Aptiv	$	1,075			$	1,064			$	273			$	1,571			$	(2,908	)		$	1,075

Statement of Comprehensive Income Year Ended December 31, 2015

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net income (loss)	$	1,450			$	1,607			$	409			$	1,732			$	(3,663	)		$	1,535
Other comprehensive income (loss):
Currency translation adjustments	(5		)		—				—				(339		)		—				(344		)
Net change in unrecognized gain (loss) on derivative instruments, net of tax	—				—				—				(28		)		—				(28		)
Employee benefit plans adjustment, net of tax	—				—				—				64				—				64
Other comprehensive loss	(5		)		—				—				(303		)		—				(308		)
Equity in other comprehensive (loss) income of subsidiaries	(287		)		(449		)		(9		)		—				745				—
Comprehensive income (loss)	1,158				1,158				400				1,429				(2,918		)		1,227
Comprehensive income attributable to noncontrolling interests	—				—				—				69				—				69
Comprehensive income (loss) attributable to Aptiv	$	1,158			$	1,158			$	400			$	1,360			$	(2,918	)		$	1,158

Balance Sheet as of December 31, 2017

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1			$	—			$	—			$	1,595			$	—			$	1,596
Restricted cash	—				—				—				1				—				1
Accounts receivable, net	—				—				—				2,440				—				2,440
Intercompany receivables, current	50				16				82				9,867				(10,015		)		—
Inventories	—				—				—				1,083				—				1,083
Other current assets	—				—				—				521				—				521
Total current assets	51				16				82				15,507				(10,015		)		5,641
Long-term assets:
Intercompany receivables, long-term	—				—				768				1,366				(2,134		)		—
Property, net	—				—				—				2,804				—				2,804
Investments in affiliates	—				—				—				91				—				91
Investments in subsidiaries	11,987				12,599				3,416				—				(28,002		)		—
Intangible assets, net	—				—				—				3,163				—				3,163
Other long-term assets	60				—				8				402				—				470
Total long-term assets	12,047				12,599				4,192				7,826				(30,136		)		6,528
Total assets	$	12,098			$	12,615			$	4,274			$	23,333			$	(40,151	)		$	12,169
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—			$	—			$	13			$	4			$	—			$	17
Accounts payable	2				—				—				2,225				—				2,227
Intercompany payables, current	5,689				1,736				1,032				1,558				(10,015		)		—
Accrued liabilities	91				—				10				1,195				—				1,296
Total current liabilities	5,782				1,736				1,055				4,982				(10,015		)		3,540
Long-term liabilities:
Long-term debt	3,017				—				1,078				37				—				4,132
Intercompany payables, long-term	—				—				1,297				837				(2,134		)		—
Pension benefit obligations	—				—				—				454				—				454
Other long-term liabilities	—				—				—				526				—				526
Total long-term liabilities	3,017				—				2,375				1,854				(2,134		)		5,112
Total liabilities	8,799				1,736				3,430				6,836				(12,149		)		8,652
Total Aptiv shareholders’ equity	3,299				10,879				844				16,279				(28,002		)		3,299
Noncontrolling interest	—				—				—				218				—				218
Total shareholders’ equity	3,299				10,879				844				16,497				(28,002		)		3,517
Total liabilities and shareholders’ equity	$	12,098			$	12,615			$	4,274			$	23,333			$	(40,151	)		$	12,169

Balance Sheet as of December 31, 2016

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	2			$	—			$	—			$	735			$	—			$	737
Restricted cash	—				—				—				1				—				1
Accounts receivable, net	—				—				—				2,130				—				2,130
Intercompany receivables, current	47				1,843				436				5,285				(7,611		)		—
Inventories	—				—				—				859				—				859
Other current assets	—				—				—				302				—				302
Current assets of discontinued operations	—				—				—				1,390				—				1,390
Total current assets	49				1,843				436				10,702				(7,611		)		5,419
Long-term assets:
Intercompany receivables, long-term	—				1,070				768				1,767				(3,605		)		—
Property, net	—				—				—				2,325				—				2,325
Investments in affiliates	—				—				—				67				—				67
Investments in subsidiaries	10,833				8,722				3,090				—				(22,645		)		—
Intangible assets, net	—				—				—				2,650				—				2,650
Other long-term assets	60				—				10				210				—				280
Long-term assets of discontinued operations	—				—				—				1,551				—				1,551
Total long-term assets	10,893				9,792				3,868				8,570				(26,250		)		6,873
Total assets	$	10,942			$	11,635			$	4,304			$	19,272			$	(33,861	)		$	12,292
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—			$	—			$	3			$	7			$	—			$	10
Accounts payable	3				—				—				1,817				—				1,820
Intercompany payables, current	5,504				68				974				1,065				(7,611		)		—
Accrued liabilities	31				300				30				881				—				1,242
Current liabilities of discontinued operations	—				—				—				1,076				—				1,076
Total current liabilities	5,538				368				1,007				4,846				(7,611		)		4,148
Long-term liabilities:
Long-term debt	2,837				—				1,090				26				—				3,953
Intercompany payables, long-term	166				1,317				1,296				826				(3,605		)		—
Pension benefit obligations	—				—				—				439				—				439
Other long-term liabilities	—				—				10				361				—				371
Long-term liabilities of discontinued operations	—				—				—				618				—				618
Total long-term liabilities	3,003				1,317				2,396				2,270				(3,605		)		5,381
Total liabilities	8,541				1,685				3,403				7,116				(11,216		)		9,529
Total Aptiv shareholders’ equity	2,401				9,950				901				11,794				(22,645		)		2,401
Noncontrolling interest	—				—				—				362				—				362
Total shareholders’ equity	2,401				9,950				901				12,156				(22,645		)		2,763
Total liabilities and shareholders’ equity	$	10,942			$	11,635			$	4,304			$	19,272			$	(33,861	)		$	12,292

Statement of Cash Flows for the Year Ended December 31, 2017

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net cash (used in) provided by operating activities from continuing operations	$	(93	)		$	(184	)		$	—			$	1,383			$	—			$	1,106
Net cash provided by operating activities from discontinued operations	—				—				—				362				—				362
Net cash (used in) provided by operating activities	(93		)		(184		)		—				1,745				—				1,468
Cash flows from investing activities:
Capital expenditures	—				—				—				(698		)		—				(698		)
Proceeds from sale of property / investments	—				—				—				7				—				7
Cost of business acquisitions, net of cash acquired	—				—				—				(324		)		—				(324		)
Cost of technology investments	—				—				—				(50		)		—				(50		)
Settlement of derivatives	—				—				—				(28		)		—				(28		)
Loans to affiliates	—				(126		)		—				(986		)		1,112				—
Repayments of loans from affiliates	—				—				—				1,345				(1,345		)		—
Net cash used in investing activities from continuing operations	—				(126		)		—				(734		)		(233		)		(1,093		)
Net cash used in investing activities from discontinued operations	—				—				—				(159		)		—				(159		)
Net cash used in investing activities	—				(126		)		—				(893		)		(233		)		(1,252		)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	—				—				—				(17		)		—				(17		)
Contingent consideration and deferred acquisition purchase price payments	—				—				—				(24		)		—				(24		)
Dividend payments of consolidated affiliates to minority shareholders	—				—				—				(38		)		—				(38		)
Proceeds from issuance of senior notes, net of issuance costs	—				—				—				796				—				796
Proceeds from borrowings from affiliates	802				310				—				—				(1,112		)		—
Payments on borrowings from affiliates	(1,345		)		—				—				—				1,345				—
Repurchase of ordinary shares	(383		)		—				—				—				—				(383		)
Distribution of cash dividends	(310		)		—				—				—				—				(310		)
Dividend received from spin-off of Delphi Technologies	1,148				—				—				—				—				1,148
Cash transferred from Delphi Technologies related to spin-off	180				—				—				—				—				180
Cash transferred to Delphi Technologies related to spin-off	—				—				—				(863		)		—				(863		)
Taxes withheld and paid on employees' restricted share awards	—				—				—				(33		)		—				(33		)
Net cash provided by (used in) financing activities	92				310				—				(179		)		233				456
Effect of exchange rate fluctuations on cash and cash equivalents	—				—				—				86				—				86
(Decrease) increase in cash and cash equivalents	(1		)		—				—				759				—				758
Cash and cash equivalents at beginning of year	2				—				—				836				—				838
Cash and cash equivalents at end of year	$	1			$	—			$	—			$	1,595			$	—			$	1,596
Cash and cash equivalents of discontinued operations	$	—			$	—			$	—			$	—			$	—			$	—
Cash and cash equivalents of continuing operations	$	1			$	—			$	—			$	1,595			$	—			$	1,596

Statement of Cash Flows for the Year Ended December 31, 2016

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net cash (used in) provided by operating activities from continuing operations	$	(141	)		$	125			$	—			$	1,510			$	—			$	1,494
Net cash provided by operating activities from discontinued operations	—				—				—				447				—				447
Net cash (used in) provided by operating activities	(141		)		125				—				1,957				—				1,941
Cash flows from investing activities:
Capital expenditures	—				—				—				(657		)		—				(657		)
Proceeds from sale of property / investments	—				—				—				19				—				19
Net proceeds from divestiture of discontinued operations	—				—				—				48				—				48
Proceeds from business divestitures	—				—				—				197				—				197
Cost of business acquisitions, net of cash acquired	—				—				(15		)		—				—				(15		)
Cost of technology investments	—				—				(3		)		—				—				(3		)
Settlement of derivatives	—				—				—				(1		)		—				(1		)
Loans to affiliates	—				(979		)		—				(1,346		)		2,325				—
Repayments of loans from affiliates	—				—				—				353				(353		)		—
Investments in subsidiaries	(854		)		—				(350		)		—				1,204				—
Net cash (used in) provided by investing activities from continuing operations	(854		)		(979		)		(368		)		(1,387		)		3,176				(412		)
Net cash used in investing activities from discontinued operations	—				—				—				(166		)		—				(166		)
Net cash (used in) provided by investing activities	(854		)		(979		)		(368		)		(1,553		)		3,176				(578		)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	—				—				—				(34		)		—				(34		)
Repayment of senior notes	—				—				(862		)		—				—				(862		)
Proceeds from issuance of senior notes, net of issuance costs	852				—				—				—				—				852
Contingent consideration and deferred acquisition purchase price payments	—				—				—				(4		)		—				(4		)
Dividend payments of consolidated affiliates to minority shareholders	—				—				—				(42		)		—				(42		)
Proceeds from borrowings from affiliates	1,095				—				1,230				—				(2,325		)		—
Payments on borrowings from affiliates	(353		)		—				—				—				353				—
Investment from parent	350				854				—				—				(1,204		)		—
Repurchase of ordinary shares	(634		)		—				—				—				—				(634		)
Distribution of cash dividends	(317		)		—				—				—				—				(317		)
Taxes withheld and paid on employees' restricted share awards	—				—				—				(40		)		—				(40		)
Net cash provided by (used in) financing activities	993				854				368				(120		)		(3,176		)		(1,081		)
Effect of exchange rate fluctuations on cash and cash equivalents	—				—				—				(23		)		—				(23		)
(Decrease) increase in cash and cash equivalents	(2		)		—				—				261				—				259
Cash and cash equivalents at beginning of year	4				—				—				575				—				579
Cash and cash equivalents at end of year	$	2			$	—			$	—			$	836			$	—			$	838
Cash and cash equivalents of discontinued operations	$	—			$	—			$	—			$	101			$	—			$	101
Cash and cash equivalents of continuing operations	$	2			$	—			$	—			$	735			$	—			$	737

Statement of Cash Flows for the Year Ended December 31, 2015

	Parent				Subsidiary Guarantors				Subsidiary Issuer/Guarantor				Non-Guarantor Subsidiaries				Eliminations				Consolidated
	(in millions)
Net cash (used in) provided by operating activities from continuing operations	$	(53	)		$	171			$	—			$	1,122			$	(100	)		$	1,140
Net cash provided by operating activities from discontinued operations	—				—				—				563				—				563
Net cash (used in) provided by operating activities	(53		)		171				—				1,685				(100		)		1,703
Cash flows from investing activities:
Capital expenditures	—				—				—				(503		)		—				(503		)
Proceeds from sale of property / investments	—				—				—				7				—				7
Net proceeds from divestiture of discontinued operations	—				—				—				713				—				713
Proceeds from business divestitures, net of payments of $14 in 2015	—				—				(7		)		18				—				11
Cost of business acquisitions, net of cash acquired	(1,606		)		—				(104		)		56				—				(1,654		)
Cost of technology investments	—				—				—				(3		)		—				(3		)
Loans to affiliates	—				(925		)		(342		)		(3,221		)		4,488				—
Repayments of loans from affiliates	—				—				135				1,333				(1,468		)		—
Investments in subsidiaries	(753		)		—				—				—				753				—
Net cash (used in) provided by investing activities from continuing operations	(2,359		)		(925		)		(318		)		(1,600		)		3,773				(1,429		)
Net cash used in investing activities from discontinued operations	—				—				—				(270		)		—				(270		)
Net cash (used in) provided by investing activities	(2,359		)		(925		)		(318		)		(1,870		)		3,773				(1,699		)
Cash flows from financing activities:
Net repayments under other short-term debt agreements	—				—				—				(214		)		—				(214		)
Repayment of senior notes	—				—				(546		)		—				—				(546		)
Proceeds from issuance of senior notes, net of issuance costs	2,043				—				—				—				—				2,043
Dividend payments of consolidated affiliates to minority shareholders	—				—				—				(63		)		—				(63		)
Proceeds from borrowings from affiliates	3,277				—				964				247				(4,488		)		—
Payments on borrowings from affiliates	(1,468		)		—				—				—				1,468				—
Investment from parent	—				753				—				—				(753		)		—
Dividends paid to affiliates	—				—				(100		)		—				100				—
Repurchase of ordinary shares	(1,159		)		—				—				—				—				(1,159		)
Distribution of cash dividends	(286		)		—				—				—				—				(286		)
Taxes withheld and paid on employees' restricted share awards	—				—				—				(59		)		—				(59		)
Net cash provided by (used in) financing activities	2,407				753				318				(89		)		(3,673		)		(284		)
Effect of exchange rate fluctuations on cash and cash equivalents	—				—				—				(45		)		—				(45		)
Decrease in cash and cash equivalents	(5		)		(1		)		—				(319		)		—				(325		)
Cash and cash equivalents at beginning of year	9				1				—				894				—				904
Cash and cash equivalents at end of year	$	4			$	—			$	—			$	575			$	—			$	579
Cash and cash equivalents of discontinued operations	$	—			$	—			$	—			$	152			$	—			$	152
Cash and cash equivalents of continuing operations	$	4			$	—			$	—			$	423			$	—			$	427

23. SEGMENT REPORTING

Aptiv operates its core business along the following operating segments, which are grouped on the basis of similar product, market and operating factors:

•	Signal and Power Solutions (formerly known as Electrical/Electronic Architecture), which includes complete electrical architecture and component products.

•	Advanced Safety and User Experience (formerly known as Electronics and Safety), which includes component and systems integration expertise in infotainment and connectivity, body controls and security systems, displays, passive and active safety electronics, autonomous driving software and technologies, as well as advanced development of software.

•	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.

The accounting policies of the segments are the same as those described in Note 2. Significant Accounting Policies, except that the disaggregated financial results for the segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for which Aptiv’s chief operating decision maker regularly reviews financial results to assess performance of, and make internal operating decisions about allocating resources to, the segments.

Generally, Aptiv evaluates segment performance based on stand-alone segment net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, income (loss) from discontinued operations, net of tax, 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, gains (losses) on business divestitures and deferred compensation related to acquisitions (“Adjusted Operating Income”) and accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, at current market prices. Aptiv’s 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 Aptiv's 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.

As described in Note 25. Discontinued Operations, the Company's previously reported Powertrain Systems and Thermal Systems segments have been classified as discontinued operations for all periods presented. Discontinued operations also includes the Company's thermal original equipment service business, the results of which were previously reported within the Powertrain Systems segment. Certain operations, primarily related to contract manufacturing services, which were previously included within the Thermal Systems reporting segment but which were not included in the scope of the divestiture, and certain original equipment service businesses that were previously included within the Powertrain Systems segment but which was not included in the spin-off, are reported in continuing operations and have been reclassified within the Advanced Safety and User Experience and Signal and Power Solutions segments for all periods presented. Amounts for shared general and administrative operating expenses that were allocated to the Powertrain Systems and Thermal Systems segments in prior periods have been re-allocated to the Company's reportable operating segments. No amounts for shared general and administrative operating expense or interest expense were allocated to discontinued operations.

Included below are sales and operating data for Aptiv’s segments for the years ended December 31, 2017, 2016 and 2015, as well as balance sheet data as of December 31, 2017 and 2016.

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other (1)				Total
	(in millions)
For the Year Ended December 31, 2017:
Net sales	$	9,507			$	3,446			$	(69	)		$	12,884
Depreciation and amortization	$	438			$	108			$	—			$	546
Adjusted operating income	$	1,302			$	292			$	—			$	1,594
Operating income (2)	$	1,206			$	210			$	—			$	1,416
Equity income, net of tax	$	31			$	—			$	—			$	31
Net income attributable to noncontrolling interest	$	42			$	—			$	—			$	42
Capital expenditures	$	477			$	196			$	25			$	698

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other (1)				Total
	(in millions)
For the Year Ended December 31, 2016:
Net sales	$	9,319			$	3,024			$	(69	)		$	12,274
Depreciation and amortization	$	401			$	88			$	—			$	489
Adjusted operating income	$	1,272			$	351			$	—			$	1,623
Operating income (3)	$	1,099			$	440			$	—			$	1,539
Equity income, net of tax	$	35			$	—			$	—			$	35
Net income attributable to noncontrolling interest	$	34			$	—			$	—			$	34
Capital expenditures	$	458			$	131			$	68			$	657

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other (1)				Total
	(in millions)
For the Year Ended December 31, 2015:
Net sales	$	8,183			$	2,756			$	(75	)		$	10,864
Depreciation and amortization	$	276			$	68			$	—			$	344
Adjusted operating income	$	1,013			$	347			$	—			$	1,360
Operating income (4)	$	924			$	311			$	—			$	1,235
Equity income, net of tax	$	16			$	—			$	—			$	16
Net income attributable to noncontrolling interest	$	39			$	—			$	—			$	39
Capital expenditures	$	353			$	102			$	48			$	503

(1)	Eliminations and Other includes the elimination of inter-segment transactions. Capital expenditures amounts are attributable to corporate administrative and support functions, including corporate headquarters and certain technical centers.

(2)	Includes charges recorded in 2017 related to costs associated with employee termination benefits and other exit costs of $67 million for Signal and Power Solutions and $62 million for Advanced Safety and User Experience.

(3)	Includes a pre-tax gain of $141 million from the divestiture of the Advanced Safety and User Experience Mechatronics business, as well as charges recorded in 2016 related to costs associated with employee termination benefits and other exit costs of $125 million for Signal and Power Solutions and $42 million for Advanced Safety and User Experience.

(4)	Includes charges recorded in 2015 related to costs associated with employee termination benefits and other exit costs of $39 million for Signal and Power Solutions and $26 million for Advanced Safety and User Experience.

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other (1)				Total
	(in millions)
Balance as of December 31, 2017:
Investment in affiliates	$	91			$	—			$	—			$	91
Goodwill	$	1,594			$	350			$	—			$	1,944
Total segment assets	$	9,833			$	4,225			$	(1,889	)		$	12,169
Balance as of December 31, 2016:
Investment in affiliates	$	67			$	—			$	—			$	67
Goodwill	$	1,424			$	78			$	—			$	1,502
Total segment assets	$	8,458			$	2,327			$	1,507			$	12,292

(1)	Eliminations and Other includes the elimination of inter-segment transactions, and includes assets of discontinued operations of $2,941 million as of December 31, 2016.

The reconciliation of Adjusted Operating Income to Operating Income includes, as applicable, 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, gains (losses) on business divestitures and deferred compensation related to acquisitions. The reconciliation of Adjusted Operating Income to net income attributable to Aptiv for the years ended December 31, 2017, 2016 and 2015 are as follows:

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other				Total
	(in millions)
For the Year Ended December 31, 2017:
Adjusted operating income	$	1,302			$	292			$	—			$	1,594
Restructuring	(67		)		(62		)		—				(129		)
Other acquisition and portfolio project costs	(21		)		(7		)		—				(28		)
Asset impairments	(8		)		(1		)		—				(9		)
Deferred compensation related to nuTonomy acquisition	—				(12		)		—				(12		)
Operating income	$	1,206			$	210			$	—			1,416
Interest expense													(140		)
Other expense, net													(21		)
Income from continuing operations before income taxes and equity income													1,255
Income tax expense													(223		)
Equity income, net of tax													31
Income from continuing operations													1,063
Income from discontinued operations, net of tax													365
Net income													1,428
Net income attributable to noncontrolling interest													73
Net income attributable to Aptiv													$	1,355

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other				Total
	(in millions)
For the Year Ended December 31, 2016:
Adjusted operating income	$	1,272			$	351			$	—			$	1,623
Restructuring	(125		)		(42		)		—				(167		)
Other acquisition and portfolio project costs	(48		)		(9		)		—				(57		)
Asset impairments	—				(1		)		—				(1		)
Gain (loss) on business divestitures, net	—				141				—				141
Operating income	$	1,099			$	440			$	—			1,539
Interest expense													(155		)
Other expense, net													(384		)
Income from continuing operations before income taxes and equity income													1,000
Income tax expense													(167		)
Equity income, net of tax													35
Income from continuing operations													868
Income from discontinued operations, net of tax													458
Net income													1,326
Net income attributable to noncontrolling interest													69
Net income attributable to Aptiv													$	1,257

	Signal and Power Solutions				Advanced Safety and User Experience				Eliminations and Other				Total
	(in millions)
For the Year Ended December 31, 2015:
Adjusted operating income	$	1,013			$	347			$	—			$	1,360
Restructuring	(39		)		(26		)		—				(65		)
Other acquisition and portfolio project costs	(32		)		(13		)		—				(45		)
Asset impairments	(4		)		(3		)		—				(7		)
Gain (loss) on business divestitures, net	(14		)		6				—				(8		)
Operating income	$	924			$	311			$	—			1,235
Interest expense													(124		)
Other expense, net													(114		)
Income from continuing operations before income taxes and equity income													997
Income tax expense													(161		)
Equity income, net of tax													16
Income from continuing operations													852
Income from discontinued operations, net of tax													683
Net income													1,535
Net income attributable to noncontrolling interest													85
Net income attributable to Aptiv													$	1,450

Information concerning principal geographic areas is set forth below. Net sales data reflects the manufacturing location and is for the years ended December 31, 2017, 2016 and 2015. Net property data is as of December 31, 2017, 2016 and 2015.

	Year Ended December 31, 2017								Year Ended December 31, 2016								Year Ended December 31, 2015
	Net Sales				Net Property (1)				Net Sales				Net Property (1)				Net Sales				Net Property (1)
	(in millions)
United States (2)	$	4,652			$	839			$	4,800			$	733			$	4,472			$	676
Other North America	171				185				137				150				139				127
Europe, Middle East & Africa (3)	4,235				1,029				3,905				821				3,216				764
Asia Pacific (4)	3,544				698				3,212				573				2,803				522
South America	282				53				220				48				234				37
Total	$	12,884			$	2,804			$	12,274			$	2,325			$	10,864			$	2,126

(1)	Net property data represents property, plant and equipment, net of accumulated depreciation.

(2)	Includes net sales and machinery, equipment and tooling that relate to the Company's maquiladora operations located in Mexico. These assets are utilized to produce products sold to customers located in the United States.

(3)

Includes Aptiv’s country of domicile, Jersey, and the country of Aptiv’s principal executive offices, the United Kingdom. The Company had no sales in Jersey in any period. The Company had net sales of $157 million, $153 million, and $106 million in the United Kingdom for the years ended December 31, 2017, 2016 and 2015, respectively. The Company had net property in the United Kingdom of $91 million, $84 million, and $88 million as of December 31, 2017, 2016 and 2015, respectively. The largest portion of net sales in the Europe, Middle East & Africa region was $1,191 million, $944 million and $677 million in Germany for the years ended December 31, 2017, 2016 and 2015, respectively.

(4)	Net sales and net property in Asia Pacific are primarily attributable to China.

24. QUARTERLY DATA (UNAUDITED)

The following is a condensed summary of the Company’s unaudited quarterly results of operations for fiscal 2017 and 2016.

	Three Months Ended
	March 31,				June 30,				September 30,				December 31,				Total
	(in millions, except per share amounts)
2017
Net sales	$	3,143			$	3,153			$	3,148			$	3,440			$	12,884
Cost of sales	2,544				2,498				2,498				2,730				10,270
Gross profit	$	599			$	655			$	650			$	710			$	2,614
Operating income (1)	$	293			$	364			$	373			$	386			$	1,416
Income from continuing operations	229				306				306				222				1,063
Income from discontinued operations, net of tax	123				80				107				55				365
Net income (2)	$	352			$	386			$	413			$	277			$	1,428
Net income attributable to Aptiv	$	335			$	369			$	395			$	256			$	1,355
Basic net income per share:
Continuing operations (3)	$	0.82			$	1.11			$	1.11			$	0.78			$	3.82
Discontinued operations (3)	0.42				0.27				0.37				0.18				1.25
Basic net income per share attributable to Aptiv (3)	$	1.24			$	1.38			$	1.48			$	0.96			$	5.07
Weighted average number of basic shares outstanding	269.20				267.41				266.24				265.84				267.16
Diluted net income per share:
Continuing operations (3)	$	0.82			$	1.11			$	1.11			$	0.77			$	3.81
Discontinued operations (3)	0.42				0.27				0.37				0.18				1.25
Diluted net income per share attributable to Aptiv (3)	$	1.24			$	1.38			$	1.48			$	0.95			$	5.06
Weighted average number of diluted shares outstanding	269.54				268.03				267.16				267.44				268.03
2016
Net sales	$	2,958			$	3,084			$	3,039			$	3,193			$	12,274
Cost of sales (4)	2,377				2,423				2,402				2,325				9,527
Gross profit	$	581			$	661			$	637			$	868			$	2,747
Operating income (5)	$	303			$	376			$	335			$	525			$	1,539
Income from continuing operations	216				253				202				197				868
Income from discontinued operations, net of tax (6)	227				18				104				109				458
Net income (7)	$	443			$	271			$	306			$	306			$	1,326
Net income attributable to Aptiv	$	425			$	258			$	293			$	281			$	1,257
Basic net income per share:
Continuing operations (3)	$	0.76			$	0.91			$	0.72			$	0.67			$	3.05
Discontinued operations (3)	0.78				0.04				0.36				0.37				1.55
Basic net income per share attributable to Aptiv (3)	$	1.54			$	0.95			$	1.08			$	1.04			$	4.60
Weighted average number of basic shares outstanding	276.62				272.92				272.19				270.38				273.02
Diluted net income per share:
Continuing operations (3)	$	0.75			$	0.90			$	0.72			$	0.67			$	3.05
Discontinued operations (3)	0.78				0.04				0.35				0.36				1.54
Diluted net income per share attributable to Aptiv (3)	$	1.53			$	0.94			$	1.07			$	1.03			$	4.59
Weighted average number of diluted shares outstanding	277.04				273.37				272.77				271.64				273.70

(1)	In the first quarter of 2017, Aptiv recorded restructuring charges totaling $52 million, which includes employee-related and other costs, $36 million of which related to the initiation of the closure of a European manufacturing site within the Advanced Safety and User Experience segment.

(2)	In the fourth quarter of 2017, Aptiv recorded increased tax expense of approximately $50 million due to the enactment of the Tax Cuts and Jobs Act in the United States on December 22, 2017.

(3)	Due to the use of the weighted average shares outstanding for each quarter for computing earnings per share, the sum of the quarterly per share amounts may not equal the per share amount for the year.

(4)	In the fourth quarter of 2016, Aptiv recognized a pre-tax gain of $141 million on the divestiture of its Mechatronics business.

(5)	In the fourth quarter of 2016, Aptiv recorded restructuring charges totaling $62 million, which includes employee-related and other costs.

(6)	In the first quarter of 2016, Aptiv recognized an after-tax gain on the divestiture of discontinued operations of $104 million.

(7)	In the third quarter of 2016, Aptiv recognized losses on the extinguishment of debt of $73 million. In the fourth quarter of 2016, Aptiv recorded a reserve of $300 million for the Unsecured Creditors litigation.

NOTE 25. DISCONTINUED OPERATIONS

Spin-Off of Delphi Technologies

On December 4, 2017, the Company completed the Separation of its former Powertrain Systems segment by distributing to Aptiv shareholders on a pro rata basis all of the issued and outstanding ordinary shares of Delphi Technologies PLC (“Delphi Technologies”), a public limited company formed to hold the spun-off business. To effect the Separation, the Company distributed to its shareholders one ordinary share of Delphi Technologies for every three Aptiv ordinary shares outstanding as of November 22, 2017, the record date for the distribution. Shareholders received cash in lieu of any fractional ordinary shares of Delphi Technologies. Following the Separation, Delphi Technologies is now an independent public company. Aptiv did not retain any equity or other interests in Delphi Technologies.

On December 4, 2017, pursuant to the Separation and Distribution Agreement, the Company transferred to Delphi Technologies the assets and liabilities that comprised Delphi Technologies’ business. The Company received a dividend of approximately $1,148 million from Delphi Technologies in connection with the Separation. Delphi Technologies financed this dividend through the issuance of approximately $1.55 billion of debt, consisting of a senior secured five-year $750 million term loan facility that was issued upon the spin-off and $800 million aggregate principal amount of 5.00% senior unsecured notes due 2025 that were issued in September 2017 (collectively, the "Delphi Technologies Debt"). In connection with the Separation, the Delphi Technologies Debt was transferred to Delphi Technologies and is no longer reflected in the Company’s consolidated financial statements. Also in connection with the Separation, the Company received $180 million in cash from Delphi Technologies pursuant to the Tax Matters Agreement.

The requirements for the presentation of Delphi Technologies as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying consolidated financial statements reflect this business as a discontinued operation for all periods presented through the Distribution Date. Operations related to certain original equipment service businesses previously included within the Company's Powertrain Systems segment, but which were not included in the spin-off, are reported in continuing operations and have been reclassified within the Advanced Safety and User Experience and Signal and Power Solutions segments for all periods presented. No amounts for shared general and administrative expense or interest expense were allocated to discontinued operations. Aptiv has not had significant continuing involvement with the spun-off Powertrain Systems business following the closing of the transaction.

In connection with the Separation, Aptiv and Delphi Technologies 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, a Transition Services Agreement, a Tax Matters Agreement, an Employee Matters Agreement and Contract Manufacturing Services Arrangements. The transition services primarily involve Aptiv providing certain services to Delphi Technologies related to information technology and human resource infrastructure for terms of up to 24 months following the Separation. Amounts billed to Delphi Technologies pursuant to the Transition Services Agreement were not significant during the year ended December 31, 2017. As part of the near-term transition related to these agreements, Aptiv has recorded certain short-term assets and liabilities within the consolidated balance sheet as of December 31, 2017. The Company has recorded $123 million in other current assets related to accounts receivable from customers that it will collect on behalf of Delphi Technologies, which will be remitted to Delphi Technologies, and $132 million in accrued liabilities related to accounts payable to outside suppliers that it will remit on behalf of Delphi Technologies, which will be reimbursed by Delphi Technologies.

As a result of the Separation, the Company incurred approximately $118 million in separation costs during the year ended December 31, 2017, which are included within earnings from discontinued operations, net of income taxes in the accompanying Consolidated Statement of Operations. These costs primarily related to professional fees associated with planning the Separation, as well as Separation activities within finance, tax, legal and information system functions and certain investment banking fees incurred upon the Separation.

As a result of the Separation, the Company has separated its defined benefit pension and other post-employment benefit plans, and adjusted its employee share-based compensation awards. See Note 12. Pension Benefits and Note 21. Share-Based Compensation, respectively, for additional information.

As a result of the completion of the Separation on December 4, 2017, there were no assets or liabilities of the discontinued operation as of December 31, 2017. The following table summarizes the carrying value of the major classes of assets and liabilities of discontinued operations as of December 31, 2016:

	December 31, 2016
	(in millions)
Cash and cash equivalents	$	101
Accounts receivable, net	808
Inventories, net	373
Other current assets	108
Total current assets of discontinued operations	$	1,390
Property, net	$	1,190
Investments in affiliates	34
Intangible assets, net	92
Goodwill	6
Other long-term assets	229
Total long-term assets of discontinued operations	$	1,551
Short-term debt	$	2
Accounts payable	743
Other current liabilities	331
Total current liabilities of discontinued operations	$	1,076
Long-term debt	$	6
Pension benefit obligations	516
Other long-term liabilities	96
Total long-term liabilities of discontinued operations	$	618

As of December 31, 2016, there was $156 million of Noncontrolling interest attributable to the Company's partners in its Powertrain Systems joint ventures.

Divestiture of Thermal Systems

During the first quarter of 2015, the Company determined that its previously reported Thermal Systems segment met the criteria to be classified as a discontinued operation as a result of entering into a definitive agreement for the sale of substantially all of the assets and liabilities of the Company's wholly owned Thermal Systems business and a commitment to a plan to dispose of the Company's interests in two joint ventures which were previously reported within the Thermal Systems segment.

On June 30, 2015 the Company closed the sale of its wholly owned Thermal Systems business to MAHLE GmbH ("MAHLE"). The Company received cash proceeds of approximately $670 million and recognized a gain on the divestiture within income from discontinued operations of $271 million (approximately $0.95 per diluted share), net of tax expense of $52 million, transaction costs of $10 million and $18 million of pre-tax post-closing adjustments recorded during the year ended December 31, 2015 primarily related to settlement of working capital items and contingent liabilities. Additional post-closing adjustments of $3 million, primarily related to the settlement of contingent liabilities, were recorded as a reduction to the gain on the divestiture during the year ended December 31, 2016. In conjunction with the sale, Aptiv and MAHLE also entered into a transition services agreement under which Aptiv provided certain administrative and other services, as well as a supply agreement under which Aptiv supplied certain products, primarily for a period of up to eighteen months following the closing of the transaction. Aptiv recorded $8 million and $8 million to other income (expense), net for the years ended December 31, 2016 and December 31, 2015, respectively, for certain fees earned pursuant to the transition services agreement.

On September 24, 2015 the Company closed the sale of its 50 percent interest in its Korea Delphi Automotive Systems Corporation ("KDAC") joint venture, which was accounted for under the equity method and was principally reported as part of the Thermal Systems segment, to the joint venture partner. The Company received cash proceeds of $70 million and recognized

a gain on the divestiture of $47 million, net of tax expense, within income from discontinued operations during the three months ended September 30, 2015. During the year ended December 31, 2015, the Company recorded a net loss of $41 million (approximately $0.14 per diluted share) on the KDAC divestiture within income from discontinued operations, which includes an impairment loss of $88 million recorded on this investment in the first quarter of 2015 based on the evaluation of the estimated fair value of the Company's interest in KDAC as of March 31, 2015 in relation to its carrying value.

On March 31, 2016, the Company closed the sale of its 50 percent interest in its Shanghai Delphi Automotive Air Conditioning ("SDAAC") joint venture to one of the Company's joint venture partners, Shanghai Aerospace Automobile Electromechanical Co., Ltd ("SAAE"). The Company received cash proceeds of $62 million, net of tax, transaction costs and $29 million of cash divested, and recognized a gain on the divestiture of $104 million (approximately $0.38 per diluted share), net of tax expense of $10 million and transaction costs, within income from discontinued operations during the year ended December 31, 2016. The financial results of SDAAC, which were consolidated by Aptiv, were historically reported as part of the Thermal Systems segment.

As the divestiture of the Thermal Systems segment, including the Company's interests in SDAAC and KDAC and the thermal original equipment service business, represents a strategic shift that will have a major effect on the Company's operations and financial results, the assets and liabilities, operating results, and operating and investing cash flows for the former Thermal Systems segment are presented as discontinued operations separate from the Company’s continuing operations for all periods presented. Discontinued operations also includes the Company's thermal original equipment service business, which was included in the sale of the wholly owned Thermal Systems business, the results of which were previously reported within the Powertrain Systems segment. Certain operations, primarily related to contract manufacturing services, which were previously included within the Thermal Systems reporting segment, were excluded from the scope of the divestiture, and are reported in continuing operations within the Advanced Safety and User Experience segment for all periods presented. No amounts for shared general and administrative operating expense or interest expense were allocated to discontinued operations. Aptiv has not had significant continuing involvement with the divested Thermal Systems business following the closing of the transactions.

Assets and liabilities classified as held for sale were required to be recorded at the lower of carrying value or fair value less costs to sell. Accordingly, an after-tax impairment loss of $88 million (approximately $0.30 per diluted share) was recorded in income from discontinued operations in the first quarter of 2015 based on the evaluation of the estimated fair value of the Company's interest in KDAC as of March 31, 2015 in relation to its carrying value. As of March 31, 2015, the fair value of this interest was estimated to be approximately $32 million, determined primarily based on recent negotiations with a third party and based on a non-binding offer from that potential buyer at the time. As described above, the Company subsequently completed the sale of its interest in KDAC for net cash proceeds of $70 million during the third quarter of 2015.

Income from Discontinued Operations

A reconciliation of the major classes of line items constituting pre-tax profit or loss of discontinued operations, including Powertrain Systems through December 4, 2017, as well as Thermal Systems in prior periods, to income from discontinued operations, net of tax as presented in the consolidated statements of operations is as follows:

	Year Ended December 31,
	2017				2016				2015
	(in millions)
Net sales	$	4,385			$	4,465			$	5,215
Cost of sales	3,496				3,631				4,269
Selling, general and administrative	298				222				236
Amortization	15				17				24
Restructuring	90				161				115
Other income and expense items that are not major, net	(54		)		(2		)		(5		)
Income from discontinued operations before income taxes and equity income	432				432				566
Income tax expense on discontinued operations	(71		)		(75		)		(112		)
Equity income (loss) from discontinued operations, net of tax	4				—				(1		)
Gain on divestiture of discontinued operations, net of tax	—				104				318
Adjustment to prior period gain on divestiture, net of tax	—				(3		)		—
Impairment loss	—				—				(88		)
Income from discontinued operations, net of tax	365				458				683
Income from discontinued operations attributable to noncontrolling interests	31				35				46
Net income from discontinued operations attributable to Aptiv	$	334			$	423			$	637

Income from discontinued operations before income taxes attributable to Aptiv was $399 million, $491 million and $739 million for the years ended December 31, 2017, 2016 and 2015, respectively, which includes $6 million, $7 million and $10 million respectively, of income tax expense attributable to noncontrolling interests.