Aptiv PLCAPTV
Aptiv PLC Fair Value Disclosure
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 U.S. 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 sheets, 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, 2025 and 2024, Aptiv was in a net derivative asset position of $166 million and a net derivative liability position of $96 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.
Publicly traded equity securities—All publicly traded equity securities are reported at fair value as of each reporting date. The measurement of the asset is based on quoted prices for identical assets on active market exchanges. Gains and losses from changes in the fair value of these securities are recorded within other income, net on the consolidated statements of operations.
Available-for-sale debt securities—Investments in available-for-sale debt securities are reported at fair value with changes in the fair value recorded in other comprehensive income. Changes in the fair value of available-for-sale debt securities impact earnings only when such securities are sold, or an allowance for expected credit losses or impairment is recognized.
As further described in Note 5. Investments in Affiliates, the Company owns an investment in Maxieye, which is classified as an available-for-sale debt security due to the Company’s redemption rights. As of December 31, 2025, the carrying value of this investment was $57 million, and is included within other long-term assets in the consolidated balance sheet. The fair value measurements of this investment is based on significant inputs that are not observable in the market, and is therefore classified as a Level 3 measurement. As further described in Note 5. Investments in Affiliates, in October 2025, the Company converted its existing preferred shares in StradVision into common shares (the “Conversion”). Prior to the Conversion, the Company classified its investment in StradVision as an available-for-sale debt security due to the Company’s redemption rights. The fair value measurement of this investment prior to the Conversion was based on significant inputs that were not observable in the market, and was therefore classified as a Level 3 measurement.
Refer to Note 5. Investments in Affiliates for further information regarding these investments.
The below table summarizes the cost, cumulative unrealized gains and losses, which includes the accumulated currency translation adjustments for StradVision prior to the Conversion, as described above, and the estimated fair value of Aptiv’s debt securities held as of December 31, 2025 and 2024:
| Cost basis | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Available-for-sale debt securities | $ | 57 | $ | 20 | $ | (19) | $ | 58 | |||||||||||||||
| Total debt securities | $ | 57 | $ | 20 | $ | (19) | $ | 58 | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Available-for-sale debt securities | $ | 165 | $ | 8 | $ | (12) | $ | 161 | |||||||||||||||
| Total debt securities | $ | 165 | $ | 8 | $ | (12) | $ | 161 | |||||||||||||||
The change in fair value of available-for-sale debt securities classified as a Level 3 measurement for the years ended December 31, 2025 and 2024 are as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Fair value at beginning of period | $ | 161 | $ | — | |||||||
| Additions | 40 | 165 | |||||||||
| Measurement adjustments | 5 | (4) | |||||||||
| Conversion to equity method investment (1) | (148) | — | |||||||||
| Fair value at end of period | $ | 58 | $ | 161 | |||||||
(1)In October 2025, the Company converted its existing preferred shares in StradVision into common shares (the “Conversion”). The cost basis and fair value of the Company’s investment in StradVision on the Conversion date were approximately $148 million and $149 million, respectively. Following the Conversion, Aptiv began accounting for its investment in StradVision under the equity method. Refer to Note 5. Investment in Affiliates for additional information.
There were no impairment charges related to these investments during the years ended December 31, 2025 and 2024.
As of December 31, 2025 and 2024, 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, 2025 | |||||||||||||||||||||||
| Commodity derivatives | $ | 85 | $ | — | $ | 85 | $ | — | |||||||||||||||
| Foreign currency derivatives | 82 | — | 82 | — | |||||||||||||||||||
| Available-for-sale debt securities | 58 | — | — | 58 | |||||||||||||||||||
| Total | $ | 225 | $ | — | $ | 167 | $ | 58 | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Commodity derivatives | $ | 6 | $ | — | $ | 6 | $ | — | |||||||||||||||
| Foreign currency derivatives | 13 | — | 13 | — | |||||||||||||||||||
| Publicly traded equity securities | 11 | 11 | — | — | |||||||||||||||||||
| Available-for-sale debt securities | 161 | — | — | 161 | |||||||||||||||||||
| Total | $ | 191 | $ | 11 | $ | 19 | $ | 161 | |||||||||||||||
As of December 31, 2025 and 2024, 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, 2025 | |||||||||||||||||||||||
| Foreign currency derivatives | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||||
| Total | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||
| Commodity derivatives | $ | 12 | $ | — | $ | 12 | $ | — | |||||||||||||||
| Foreign currency derivatives | 103 | — | 103 | — | |||||||||||||||||||
| Total | $ | 115 | $ | — | $ | 115 | $ | — | |||||||||||||||
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, finance leases and other debt issued by Aptiv’s non-U.S. subsidiaries, the Revolving Credit Facility, the Term Loan A and all series of outstanding senior and junior 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, 2025 and 2024, total debt was recorded at $7,551 million and $8,352 million, respectively, and had estimated fair values of $6,700 million and $7,125 million, respectively. For all other financial instruments recorded as of December 31, 2025 and 2024, 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. Financial and nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, assets and liabilities held for sale, intangible assets, equity investments without readily determinable fair values and liabilities for exit or disposal activities measured at fair value upon initial recognition. During the year ended December 31, 2025, Aptiv recorded non-cash long-lived asset impairment charges of $9 million within cost of sales and $7 million within selling, general and administrative expense, primarily related to the declines in the fair value of certain fixed assets in connection with the consolidation of certain business operations and a planned site exit.
During the year ended December 31, 2024, Aptiv recorded non-cash long-lived asset impairment charges of $14 million within cost of sales related to operating lease right-of-use assets that will no longer be in use during the remaining lease terms and $8 million within cost of sales related to the declines in the fair value of certain fixed assets in connection with planned site exits. In addition, Aptiv recorded a non-cash long-lived asset impairment charge of $36 million within net gain on equity method transactions related to its equity method investment in TTTech Auto, as further discussed in Note 5. Investments in Affiliates.
During the year ended December 31, 2023, Aptiv recorded non-cash long-lived asset impairment charges of $11 million within cost of sales primarily related to an operating lease right-of-use asset in Ukraine that will no longer be in use during the remaining lease term, $7 million within cost of sales related to the abandonment of certain fixed assets and declines in the fair values of certain fixed assets, and additional non-cash asset impairment charges of $18 million within other income, net related to its equity investments without readily determinable fair value.
Fair value of long-lived and other assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals or other market indicators and management estimates. As such, Aptiv has determined that the fair value measurements of long-lived and other assets principally fall in Level 3 of the fair value hierarchy. The fair value of the Company’s investment in TTTech Auto was determined based on the contractual sales price pursuant to the executed purchase and sale agreement, as further discussed in Note 5. Investments in Affiliates. As such, Aptiv has determined that the fair value measurement of TTTech Auto falls in Level 2 of the fair value hierarchy.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 6, 2026 | Showing above |
| 2024 | Feb 7, 2025 | |
| 2023 | Feb 6, 2024 | |
| 2022 | Feb 8, 2023 | |
| 2021 | Feb 7, 2022 | |
| 2020 | Feb 8, 2021 | |
| 2019 | Feb 3, 2020 | |
| 2018 | Feb 4, 2019 | |
| 2016 | Feb 6, 2017 | |
| 2015 | Feb 8, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.