APTV

be affected by labor relations issues, regulatory requirements, trade 16 Table of Contents agreements, the availability of consumer financing, inflationary pressures, interest rate volatility, supply chain disruptions and other factors, including global health crises

87 Selling, general and administrative 1,673 1,465 (208) Amortization 208 211 3 Restructuring 185 193 8 Goodwill impairment 648 — (648) Operating income 1,184 1,842 (658) Interest expense (361) (337) (24) Other income, net 50 41 9 Net gain on equity method transactions 46 605 (559) Income before income taxes and equity loss 919 2,151 (1,232) Income tax expense (700) (223) (477) Income before equity loss 219 1,928 (1,709) Equity loss, net of tax (38) (118) 80 Net income 181 1,810 (1,629) Net income attributable t

05 (261) Gross margin 920 18.1% 920 19.1% — Selling, general and administrative 427 384 (43) Amortization 53 51 (2) Restructuring 62 37 (25) Operating income 378 448 (70) Interest expense (89) (93) 4 Other expense, net (4) — (4) Income before income taxes and equity loss 285 355 (70) Income tax expense (81) (356) 275 Income (loss) before equity loss 204 (1) 205 Equity loss, net of tax (13) (10) (3) Net income (loss) 191 (11) 202 Net income attributable to noncontrolling interest 3 1 2 Net loss attributable to

4,166 3,905 Selling, general and administrative 427 384 Amortization 53 51 Restructuring (Note 7) 62 37 Total operating expenses 4,708 4,377 Operating income 378 448 Interest expense ( 89 ) ( 93 ) Other expense, net (Note 16) ( 4 ) — Income before income taxes and equity loss 285 355 Income tax expense (Note 11) ( 81 ) ( 356 ) Income (loss) before equity loss 204 ( 1 ) Equity loss, net of tax ( 13 ) ( 10 ) Net income (loss) 191 ( 11 ) Net income attributable to noncontrolling interest 3 1 Net loss attribu

Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability

Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability

of the number of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends

consumer credit availability or cost of borrowing could adversely affect our business

Accordingly, the interest rate is subject to fluctuation during the term of the Credit Agreement based on changes in the ABR, SOFR and changes in the Company’s corporate credit ratings

Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability

Increases in interest rates could also negatively impact automotive production as a result of increased consumer borrowing costs or reduced credit availability

of the number of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends

be affected by labor relations issues, regulatory requirements, trade 16 Table of Contents agreements, the availability of consumer financing, inflationary pressures, interest rate volatility, supply chain disruptions and other factors, including global health crises

Accordingly, the interest rate is subject to fluctuation during the term of the Credit Agreement based on changes in the ABR, SOFR and changes in the Company’s corporate credit ratings

in the supply of and changes in the competitive environment for raw material and other components integral to the Company’s products, including the ongoing semiconductor supply shortage

For instance, the worldwide semiconductor shortage adversely impacted the automotive industry in recent years resulting in reduced vehicle production schedules and sales from historical levels, which adversely impacted our financial condition, operating results and cash flows for portions of the year

Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases

From time to time, payments may be received from suppliers

Global supply chain disruptions

In addition, geopolitical tensions are also causing them to regionalize their supply chains

Our suppliers also use a similar method

could result in increased pricing pressures on our global supply chain, which could adversely affect our business and financial results

could result in increased pricing pressures on our global supply chain, which could adversely affect our business and financial results

Global supply chain disruptions

Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases

Our suppliers also use a similar method

In addition, geopolitical tensions are also causing them to regionalize their supply chains

From time to time, payments may be received from suppliers

Prices are negotiated with respect to each business award, which may be subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses, significant changes in direct labor costs, for specification/design changes during the life of the program or for cost reductions achieved by us

to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes

to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes

We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our financial results

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

to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes

We are exposed to foreign currency fluctuations as a result of our substantial global operations, which may affect our financial results

to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), contractual reductions of the sales price to the OEM (which we refer to as contractual price reductions) and engineering changes

Prices are negotiated with respect to each business award, which may be subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses, significant changes in direct labor costs, for specification/design changes during the life of the program or for cost reductions achieved by us

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

other labor reforms, such as an initiative to shorten the work week from 48 to 40 hours, as early as January 1, 2027, through a gradual reduction of two hours per year. Labor costs have increased significantly in Mexico as a result of this and other labor reform initiatives, necessitating a strategic review of more cost-competitive jurisdictions and a greater acceleration in manufacturing automation. While management has implemented measures to mitigate the impact of these labor reforms on our cost structure

$1.2 billion of operating income (record adjusted operating income of $2.5 billion), demonstrating strong operating execution in the face of continuing material and labor cost inflation; ◦ Delivering operating income margin of 5.8% (adjusted operating income margin of 12.1%), driven by strong operating performance and cost reduction initiatives; • Repurchasing 22.8 million shares with a value of $1.5 billion, including incremental share deliveries under the terms of the Company’s accelerated share re

which may be subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses, significant changes in direct labor costs, for specification/design changes during the life of the program or for cost reductions achieved by us. The terms and conditions typically provide that we are subject to a warranty on the products supplied; in most cases, the duration of such warranty is coterminous with the warranty offered by the OEM to the end-user of the vehicle

addition, some of our manufacturing lines are located in China or other countries that are subject to a number of additional risks and uncertainties, including increasing labor costs, which may result from market demand or other factors, and political, social and economic instability. Changes in factors that impact the determination of our non-U.S. pension liabilities may adversely affect us. Certain of our non-U.S. subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on neg

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 or statutory requirements. 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

other labor reforms, such as an initiative to shorten the work week from 48 to 40 hours, as early as January 1, 2027, through a gradual reduction of two hours per year. Labor costs have increased significantly in Mexico as a result of this and other labor reform initiatives, necessitating a strategic review of more cost-competitive jurisdictions and a greater acceleration in manufacturing automation. While management has implemented measures to mitigate the impact of these labor reforms on our cost structure

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 or statutory requirements. 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

which may be subject to adjustments under certain circumstances, such as commodity or foreign exchange escalation/de-escalation clauses, significant changes in direct labor costs, for specification/design changes during the life of the program or for cost reductions achieved by us. The terms and conditions typically provide that we are subject to a warranty on the products supplied; in most cases, the duration of such warranty is coterminous with the warranty offered by the OEM to the end-user of the vehicle

addition, some of our manufacturing lines are located in China or other countries that are subject to a number of additional risks and uncertainties, including increasing labor costs, which may result from market demand or other factors, and political, social and economic instability. Changes in factors that impact the determination of our non-U.S. pension liabilities may adversely affect us. Certain of our non-U.S. subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on neg

$1.2 billion of operating income (record adjusted operating income of $2.5 billion), demonstrating strong operating execution in the face of continuing material and labor cost inflation; ◦ Delivering operating income margin of 5.8% (adjusted operating income margin of 12.1%), driven by strong operating performance and cost reduction initiatives; • Repurchasing 22.8 million shares with a value of $1.5 billion, including incremental share deliveries under the terms of the Company’s accelerated share re

This industry is subject to rapid technological change, vigorous competition, cyclical and short product life cycles, reduced consumer demand patterns and industry consolidation

Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, and this trend has continued in 2026

Consumer demand for intelligent and connected solutions, as well as certain government regulations, are helping transform markets and creating new opportunities for Aptiv

Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, which may continue in 2026

Consumer demand for intelligent and connected solutions, as well as certain government regulations, are helping transform markets and creating new opportunities for Aptiv

Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, which may continue in 2026

Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, and this trend has continued in 2026

This industry is subject to rapid technological change, vigorous competition, cyclical and short product life cycles, reduced consumer demand patterns and industry consolidation

in which our products are manufactured in order to minimize transportation and other costs. The most significant raw materials we use to manufacture our products include copper and resins. As of December 31, 2025, we have not experienced any significant shortages of raw materials, however, as a result of our customers’ recent production volatility and cancellations, our balance of productive, raw and component material inventories has increased substantially from customary levels. These changes to the product

and profitability burdens on the entire supply chain. For instance, the industry has recently been subjected to increased pricing pressures, specifically in relation to copper and petroleum-based resin products, which have experienced significant volatility in price. We have also been impacted globally by increased overall inflation as a result of a variety of global trends. For example, the rapidly evolving trade policies and tariff actions could result in increased pricing pressures on our global supply chai

contained herein for further detail on this transaction. Ukraine and Russia are significant global producers of raw materials used in our supply chain, including copper, aluminum, palladium and neon gases. Disruptions in the supply and volatility in the price of these materials and other inputs produced by Ukraine or Russia, including increased logistics costs and longer transit times, could adversely impact our business and results of operations. The conflict has also increased the possibility of cyber

supplies that we and our customers use in our products may adversely affect our profitability. We and our customers use a broad range of materials and supplies, including copper and other metals, petroleum-based resins, chemicals, electronic components and semiconductors. A significant disruption in the supply of these materials for any reason could decrease our production and shipping levels, which could materially increase our operating costs and materially decrease our profit margins. We, as with other compon

that were entered into to hedge forecasted exposures: Commodity Quantity Hedged Unit of Measure Notional Amount (Approximate USD Equivalent) (in thousands) (in millions) Copper 87,976 pounds $ 500 Foreign Currency Quantity Hedged Unit of Measure Notional Amount (Approximate USD Equivalent) (in millions) Mexican Peso 28,654 MXN $ 1,580 Chinese Yuan Renminbi 2,550 RMB $ 370 Polish Zloty 795 PLN $ 215 Hungarian Forint 24,910 HUF $ 75 British Pound 76 GBP $ 100 As of March 31, 2026, Aptiv has entered into derivativ

sales volumes in China and may be impacted if there are reductions in vehicle demand in China. If we are unable to maintain our position in the Chinese market or if vehicle sales in China continue to experience minimal growth or decrease, our business and financial results could be materially adversely affected. We operate in the highly competitive automotive technology and component supply industry, and are dependent on the acceptance of new product introductions for continued growth. The global automotiv

to take advantage of these trends. Consolidated Results of Operations Aptiv typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and the net of new and lost business (which we refer to collectively as volume), increased prices attributable to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), c

new customers and increasing their presence in global markets. We believe that evolving entrants into the global transportation industry, such as mobility providers, electric vehicle developers and smart cities will provide additional markets for our advanced technologies. We believe that, as a company with a global presence and advanced technology, engineering, manufacturing and customer support capabilities, we are well-positioned to benefit from these opportunities. We believe that continuously increasin

operating income, while continuing to strategically invest in the future. Aptiv typically experiences fluctuations in revenue due to changes in OEM production schedules, vehicle sales mix and the net of new and lost business (which we refer to collectively as volume), increased prices attributable to escalation clauses in our supply contracts for recovery of increased commodity costs (which we refer to as commodity pass-through), fluctuations in foreign currency exchange rates (which we refer to as “FX”), c

increased logistics costs and longer transit times, could adversely impact our business and results of operations. The conflict has also increased the possibility of cyberattacks occurring, which could either directly or indirectly impact our operations. Furthermore, the conflict has caused our customers to analyze their and their suppliers’ continued presence in the region and future customer production plans in the region remain uncertain. We do not have a material physical presence in either Russia or

We face risks related to cybersecurity for both our infrastructure and products and any cybersecurity breach or failure of one or more key information technology systems, or those of third-parties with which we do business could have a material adverse impact on our business or reputa

Consumer demand for intelligent and connected solutions, as well as certain government regulations, are helping transform markets and creating new opportunities for Aptiv

the timing of customer and consumer adoption, increased competition 39 Table of Contents from entrants outside our traditional industries, and evolving regulations, such as the guidance for automated driving systems published by the U

uncertainty regarding the timing of customer and consumer adoption, increased competition from entrants outside our traditional industries, and evolving regulations, such as the guidance for automated driving systems published by the U

health and safety laws and regulations

18 Table of Contents We may not be able to respond quickly enough to changes in regulations, technology and technological risks, and to develop our intellectual property into commercially viable products

the timing of customer and consumer adoption, increased competition 39 Table of Contents from entrants outside our traditional industries, and evolving regulations, such as the guidance for automated driving systems published by the U

health and safety laws and regulations

Consumer demand for intelligent and connected solutions, as well as certain government regulations, are helping transform markets and creating new opportunities for Aptiv

uncertainty regarding the timing of customer and consumer adoption, increased competition from entrants outside our traditional industries, and evolving regulations, such as the guidance for automated driving systems published by the U

2026, no executive officer or director of the Company adopted , modified or terminated any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K)

execution and cost reduction initiatives, despite the global inflationary environment and evolving geopolitical issues, including global trade impacts from tariffs

In particular, changes to international trade agreements, such as the United States-Mexico-Canada Agreement (the “USMCA”), increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions, or other political pressures have affected and could continue to affect our operations and the operations of our OEM customers, resulting in reduce

For example, as a result of the rapidly evolving trade policies and tariff actions, the uncertainty in the automotive industry has increased, which could adversely affect our business and financial results

effects of significant increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions

In particular, changes to international trade agreements, such as the United States-Mexico-Canada Agreement (the “USMCA”), increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions, or other political pressures have affected and could continue to affect our operations and the operations of our OEM customers, resulting in reduce

execution and cost reduction initiatives, despite the global inflationary environment and evolving geopolitical issues, including global trade impacts from tariffs

effects of significant increases in trade tariffs, import quotas and other trade restrictions or actions, including retaliatory responses to such actions

For example, as a result of the rapidly evolving trade policies and tariff actions, the uncertainty in the automotive industry has increased, which could adversely affect our business and financial results

of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends

of new vehicles produced in response to consumer demand, which is primarily driven by macro-economic factors such as credit availability, interest rates, fuel prices, consumer confidence, employment and other trends

receivable, net and short-term debt. The expenses associated with receivables factoring are recorded in the consolidated statements of operations within interest expense. Credit losses —Aptiv is exposed to credit losses primarily through the sale of vehicle components, software licenses and services. Aptiv assesses the creditworthiness of a counterparty by conducting ongoing credit reviews, which considers the Company’s expected billing exposure and timing for payment, as well as the counterparty’s establi

additional detail regarding our expected contributions to our pension plans and expected distributions to participants in future periods. Capital Expenditures Supplier selection in the automotive industry is generally finalized several years prior to the start of production of the vehicle. Therefore, current capital expenditures are based on customer commitments entered into previously, generally several years ago when the customer contract was awarded. As of December 31, 2025, we had approximately $183 millio

◦ Driving more than 75% of new business awards in China with local OEM customers

Global automotive vehicle production increased 4% from 2024 to 2025 (1% on an AWM basis), reflecting increased vehicle production of 10% in China and 1% in South America, our smallest region, partially offset by declines of 2% in North America and 1% in Europe

”), 17 of the 20 top-selling vehicle models in Europe and 20 of the 20 top-selling vehicle models in China

global vehicle production weighted to the geographic regions in which the Company generates its revenue), reflecting increased vehicle production of 10% in China and 1% in South America, our smallest region, partially offset by declines of 2% in North America and 1% in Europe

Copper 87,976 pounds $ 500 Foreign Currency Quantity Hedged Unit of Measure Notional Amount (Approximate USD Equivalent) (in millions) Mexican Peso 28,654 MXN $ 1,580 Chinese Yuan Renminbi 2,550 RMB $ 370 Polish Zloty 795 PLN $ 215 Hungarian Forint 24,910 HUF $ 75 British Pound 76 GBP $ 100 As of March 31, 2026, Aptiv has entered into derivative instruments to hedge cash flows extending out to March 2028. 27 Table of Contents Gains and losses on derivatives qualifying as cash flow hedges are recorded in accu

continuing to develop market-leading automated driving solutions, such as automated driving software, sensing and perception technologies enhanced through artificial intelligence and machine learning, as well as the underlying architecture technologies capable of supporting safety-critical applications

devices and systems themselves are becoming increasingly software-defined, with the capability to being continuously updated, while also leveraging artificial intelligence to deliver insights, transform operations and unlock value

continuing to develop market-leading automated driving solutions such as automated driving software, sensing and perception technologies enhanced through artificial intelligence and machine learning, as well as the underlying architecture technologies capable of supporting safety-critical applications

Additionally, some actors are using artificial intelligence technology to launch more automated, targeted and coordinated attacks which further heightens these risks

with actions taken by governmental authorities to impose changes in laws or regulations that restrict certain business operations, trade or travel in response to a pandemic or widespread outbreak of an illness. The impacts of any of these factors mentioned above, among others, could adversely affect our business, business opportunities, results of operations, financial condition and cash flows. Product development . The automotive technology and components industry is highly competitive and is characteriz

breakdowns or failures, electrical outages, fires, explosions, political upheaval, terrorism or war, material shortages, as well as logistical complications due to weather, global climate change, volcanic eruptions, or other natural or nuclear disasters, delayed customs processing, the spread of an infectious disease, virus or other widespread illness and more. Additionally, as we focus operations in best cost countries, the risk for such disruptions is heightened. The lack of any single subcomponent nece