UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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For the quarterly period ended March 31, 2022

OR

For the transition period from to .

Commission file number: 001-35346

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APTIV PLC

(Exact name of registrant as specified in its charter)

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5 Hanover Quay

Grand Canal Dock

Dublin, D02 VY79, Ireland

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code) 353-1-259-7013

(Former name, former address and former fiscal year, if changed since last report) N/A

_____________________________________________________________________________________________________________________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of the registrant’s ordinary shares outstanding, $0.01 par value per share as of April 29, 2022, was 270,930,925.

APTIV PLC

INDEX

PART I. FINANCIAL INFORMATION

APTIV PLC

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

See notes to consolidated financial statements.

APTIV PLC

CONSOLIDATED BALANCE SHEETS

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The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help you understand the business operations and financial condition of the Company for the three months ended March 31, 2022. This discussion should be read in conjunction with Item 1. Financial Statements. Our MD&A is presented in eight sections:

• Executive Overview

• Consolidated Results of Operations

• Results of Operations by Segment

• Liquidity and Capital Resources

• Off-Balance Sheet Arrangements

• Contingencies and Environmental Matters

• Recently Issued Accounting Pronouncements

• Critical Accounting Estimates

Within the MD&A, “Aptiv,” the “Company,” “we,” “us” and “our” refer to Aptiv PLC (formerly known as Delphi Automotive PLC), a public limited company formed under the laws of Jersey on May 19, 2011, which completed an initial public offering on November 22, 2011, and its consolidated subsidiaries. On December 4, 2017, following the spin-off of Delphi Technologies PLC, the Company changed its name to Aptiv PLC and New York Stock Exchange (“NYSE”) symbol to “APTV.”

Executive Overview

Our Business

We are a leading global technology and mobility architecture company primarily serving the automotive sector. We deliver end-to-end mobility solutions enabling our customers’ transition to more electrified, software-defined vehicles. We design and manufacture vehicle components and provide electrical, electronic and active safety technology solutions to the global automotive and commercial vehicle markets, creating the software and hardware foundation for vehicle features and functionality. Our Advanced Safety and User Experience segment is focused on providing the necessary software and advanced computing platforms, and our Signal and Power Solutions segment is focused on providing the requisite networking architecture required to support the integrated systems in today’s complex vehicles. Together, our businesses develop the ‘brain’ and the ‘nervous system’ of increasingly complex vehicles, providing integration of the vehicle into its operating environment.

We are one of the largest vehicle technology suppliers and our customers include the 25 largest automotive original equipment manufacturers (“OEMs”) in the world.

Our total net sales during the three months ended March 31, 2022 were $4.2 billion, an increase of 4% compared to the same period of 2021. Our overall volumes increased 4% for the three months ended March 31, 2022, despite decreased global automotive production of 6% (7% on an Aptiv weighted market basis, which represents global vehicle production weighted to the geographic regions in which the Company generates its revenue, “AWM”). The increase in volumes is primarily attributable to volume increases in North America and China, partially offset by decreases in Europe.

We are focused on maintaining a low fixed cost structure that provides us flexibility to remain profitable at all points of the traditional vehicle industry production cycle, including during periods of reduced industry volumes. Accordingly, we will continue to adjust our cost structure and optimize our manufacturing footprint in response to changes in the global and regional automotive markets and in order to increase investment in advanced technologies and engineering as conditions permit. As we operate in a cyclical industry that is impacted by movements in the global and regional economies, we continually evaluate opportunities to further refine our cost structure, as evidenced by our ongoing restructuring programs focused on the continued rotation of our manufacturing footprint to best cost locations and on reducing our global overhead costs, as described in Note 7. Restructuring to the consolidated financial statements contained herein. We believe our strong balance sheet coupled with our flexible cost structure will position us to capitalize on improvements in OEM production volumes as economic and pandemic conditions improve.

Proposed Acquisition of Wind River Systems, Inc.

In January 2022, the Company entered into a definitive agreement to acquire Wind River Systems, Inc. (“Wind River”), a global leader in delivering software for the intelligent edge, for approximately $4.3 billion. The transaction is expected to close

in mid-2022, subject to regulatory approvals and customary closing conditions. Refer to Note 17. Acquisitions and Divestitures to the consolidated financial statements contained herein for more information. With Aptiv and Wind River’s synergistic technologies and decades of experience delivering safety critical systems, the Company believes this acquisition will accelerate the journey to a software-defined future of the automotive industry.

Trends, Uncertainties and Opportunities

Ukraine/Russia conflict. The conflict between Ukraine and Russia, which began in February 2022, has had, and is expected to continue to have, negative economic impacts to both countries and to the European and global economies. In response to the conflict, the U.S., European Union and other nations implemented broad economic sanctions against Russia. These countries may impose further sanctions and take other actions as the situation continues.

Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases. Disruptions in the supply and volatility in the price of these materials and other inputs produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business and results of operations. The conflict has also increased the likelihood of cyberattacks occurring, which could either directly or indirectly impact our operations. Furthermore, customer production plans in the region remain uncertain and many businesses, including certain automotive OEMs and suppliers, have announced their plans to sever business ties or cease operations in Russia, indefinitely shut down production operations in Russia, relocate production out of Russia and/or suspend shipments of products, supplies, resources and goods into Russia. The conflict has also led to significant volatility in the value of the Russian Ruble, which, in combination with the sanctions and other factors described above, may result in a significant reduction in consumer demand in Russia for many products, including vehicles.

We do not have a material physical presence in either Ukraine or Russia, with approximately 1% of our workforce located in the countries as of December 31, 2021, while approximately 2% of our annual net sales are generated from manufacturing facilities in those countries for the year ended December 31, 2021. However, the impacts of the conflict have adversely impacted, and may continue to adversely impact, global economies, and in particular, the European economy, a region which accounted for approximately 33% of our total net sales for the year ended December 31, 2021. We have incurred costs (including capital expenditures), and expect to continue to incur costs, to relocate production out of Ukraine and to duplicate such production in other countries, which we expect to complete in the second quarter of 2022. While we expect our customers to reimburse us for all of such costs, there can be no assurances that we will recover all of these costs and we cannot assure that we will not experience prolonged production shutdowns prior to completing this process. Costs and recoveries related to this process were not significant for the three months ended March 31, 2022.

We continue to monitor the situation and will seek to minimize its impact to our business, while prioritizing the safety and well-being of our employees located in both countries and our compliance with applicable laws and regulations in the locations where we operate. Any of the impacts mentioned above, among others, could adverse

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There have been no material changes to the information concerning our exposures to market risk as stated in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. As described in the Form 10-K, we have currency exposures related to buying, selling and financing in currencies other than the local functional currencies in which we operate (“transactional exposure”). We also have currency exposures related to the translation of the financial statements of our non-U.S. subsidiaries that use the local currency as their functional currency into U.S. dollars, the Company’s reporting currency (“translational exposure”). As described in Note 14. Derivatives and Hedging Activities to the unaudited consolidated financial statements included in Part I, Item 1 of this report, to manage this risk the Company designates certain qualifying instruments 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 the cumulative translation adjustment component of OCI to offset changes in the value of the net investment in these foreign currency-denominated operations.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Disclosure Controls and Procedures

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance of achieving their objectives.

As of March 31, 2022, the Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated, for disclosure purposes, the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the desired control objectives were achieved as of March 31, 2022.

Changes in Internal Control over Financial Reporting

There were no material changes in the Company’s internal controls over financial reporting during the three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are from time to time subject to various actions, claims, suits, government investigations, and other proceedings incidental to our business, including those arising out of alleged defects, breach of contracts, competition and antitrust matters, product warranties, intellectual property matters, personal injury claims and employment-related matters. For a description of risks related to various legal proceedings and claims, see Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2021. For a description of our outstanding material legal proceedings, see Note 10. Commitments and Contingencies to the unaudited consolidated financial statements included in this report.

We are including the following revised risk factor to reflect a material development subsequent to the risk factors presented in our Annual Report on Form 10-K for the year ended December 31, 2021. Except for the following revised risk factor, there have been no material changes in risk factors for the Company in the period covered by this report. The revised risk factor should be read in conjunction with or description of risk factors in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

We face risks associated with doing business in various national and local jurisdictions.

The majority of our manufacturing and distribution facilities are in Mexico, China and other countries in Asia Pacific, Eastern and Western Europe, South America and Northern Africa. We also purchase raw materials and other supplies from many different countries around the world. For the year ended December 31, 2021, approximately 67% of our net revenue came from sales outside the U.S. International operations are subject to certain risks inherent in doing business globally, including:

• exposure to local economic, political and labor conditions;

• unexpected changes in laws, regulations, economic and trade sanctions, trade or monetary or fiscal policy, including interest rates, foreign currency exchange rates and changes in the rate of inflation in the U.S. and other countries;

• tariffs, quotas, customs and other import or export restrictions and other trade barriers;

• expropriation and nationalization;

• difficulty of enforcing agreements, collecting receivables and protecting assets through certain non-U.S. legal systems;

• reduced technology, data or intellectual property protections;

• limitations on repatriation of earnings;

• withholding and other taxes on remittances and other payments by subsidiaries;

• investment restrictions or requirements;

• violence and civil unrest in local countries, including the conflict between Ukraine and Russia; and

• compliance with the requirements of an increasing body of applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar laws of various other countries.

Additionally, our global operations may also be adversely affected by political events, terrorist events and hostilities, complications due to natural, nuclear or other disasters or the spread of an infectious disease, virus or other widespread illness. For instance, the conflict between Ukraine and Russia caused the U.S., European Union and other nations to implement broad economic sanctions against Russia. These countries may impose further sanctions and take other actions as the situation continues. While it is difficult to anticipate the impact the sanctions announced to date may have on us, any further sanctions imposed or actions taken by these countries, and any retaliatory measures by Russia in response, including restrictions on energy supplies from Russia to countries in the region and asset expropriations, could increase our costs, reduce our sales and earnings or otherwise have an adverse effect on our operations.

Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases. Disruptions in the supply and volatility in the price of these materials and other inputs produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business and results of operations. The conflict has also increased the likelihood of cyberattacks occurring, which could either directly or indirectly impact our operations. Furthermore, customer production plans in the region remain uncertain and many businesses, including certain automotive OEMs and suppliers, have announced their plans to sever business ties or cease operations in Russia, indefinitely shut down production operations in Russia, relocate production out of Russia and/or suspend shipments of products, supplies, resources and goods into Russia. The conflict has also led to significant volatility in the value of the Russian Ruble, which, in combination with the sanctions and other factors described above, may result in a significant reduction in consumer demand in Russia for many products, including vehicles.

We do not have a material physical presence in either Ukraine or Russia, with approximately 1% of our workforce located in the countries as of December 31, 2021, while approximately 2% of our annual net sales are generated from manufacturing facilities in those countries for the year ended December 31, 2021. However, the impacts of the conflict have adversely impacted, and may continue to adversely impact, global economies, and in particular, the European economy, a region which accounted for approximately 33% of our total net sales for the year ended December 31, 2021. We have incurred costs (including capital expenditures), and expect to continue to incur costs, to relocate production out of Ukraine and to duplicate such production in other countries. While we expect our customers to reimburse us for all of such costs, there can be no assurances that we will recover all of these costs and we cannot assure that we will not experience prolonged production shutdowns prior to completing this process. We continue to monitor the situation and will seek to minimize its impact to our business, while prioritizing the safety and well-being of our employees located in both countries and our compliance with applicable laws and regulations in the locations where we operate. Any of the impacts mentioned above, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows.

In addition, the global spread of COVID-19, which originated in late 2019 and was later declared a pandemic by the World Health Organization in March 2020, caused certain governmental authorities worldwide to initiate “lockdown” orders for all non-essential activities, which at times, included extended shutdowns of businesses in the impacted regions. Beginning late in the first quarter of 2022 and continuing into the second quarter, various regions in China, including regions where Aptiv has operations, have been subjected to new lockdowns imposed by governmental authorities to mitigate the spread of COVID-19 in those areas. In response, our manufacturing facilities located in these areas have implemented measures designed to minimize the impacts of any shutdowns. Despite these measures, production interruptions adversely impacted sales and profitability at the end of the first quarter, and it is currently unclear how long the lockdowns will continue. Although the duration and impact of these governmental lockdowns remains uncertain, we currently anticipate that our second quarter results of operations and cash flows are likely to be adversely impacted. This or any further political or governmental developments or health concerns in China, Mexico or other countries in which we operate could result in social, economic and labor instability. These uncertainties could have a material adverse effect on the continuity of our business and our results of operations and financial condition.

Existing free trade laws and regulations, such as the United States-Mexico-Canada Agreement, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements. Changes in laws or policies governing the terms of trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products, such as China and Mexico, could have a material adverse effect on our business and financial results. Furthermore, management continues to monitor the volatile geopolitical environment to identify, quantify and assess threatened duties, taxes or other business restrictions which could adversely affect our business and financial results.

Increasing our manufacturing footprint in Asian markets, including China, and our business relationships with Asian automotive manufacturers are important elements of our long-term strategy. In addition, our strategy includes increasing revenue and expanding our manufacturing footprint in lower-cost regions. As a result, our exposure to the risks described above may be greater in the future. The likelihood of such occurrences and their potential impact on us vary from country to country and are unpredictable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no repurchases of equity securities during the three months ended March 31, 2022. In January 2019, the Board of Directors authorized a share repurchase program of up to $2.0 billion. This program will commence following the completion of the previously announced share repurchase program of $1.5 billion, which was approved by the Board of Directors in April 2016. As of March 31, 2022, approximately $2,013 million remained available for repurchases pursuant to these programs.

• Filed herewith.

+ Management contract or compensatory plan or arrangement.

Filed electronically with the Report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 5, 2022