Aptiv PLCAPTV
Aptiv PLC Leases Disclosure
LEASES
Lease Portfolio
The Company has operating and finance leases for real estate, office equipment, automobiles, forklifts and certain other equipment. The Company's leases have remaining lease terms of one year to 25 years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one year. Certain of our lease agreements include rental payments which are adjusted periodically for inflation. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. The incremental borrowing rate is not a quoted rate and is primarily derived by applying a spread over U.S. Treasury rates with a similar duration to the Company’s lease payments. The spread utilized is based on the Company’s credit rating and the impact of full collateralization.
Related Party Lease Agreement
Aptiv subleases certain office space to Motional, our autonomous driving joint venture, which has a remaining lease term of approximately three years as of December 31, 2025. Total income under the agreement was $2 million, $3 million and $4 million during the years ended December 31, 2025, 2024 and 2023, respectively. The sublease income and Aptiv’s associated operating lease cost are recorded to cost of sales in the consolidated statements of operations. The Company believes the terms of the lease agreement have not significantly been affected by the fact the Company and the lessee are related parties.
The components of lease expense were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Lease cost: | |||||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of right-of-use assets | $ | 4 | $ | 4 | $ | 5 | |||||||||||
| Interest on lease liabilities | — | 1 | 1 | ||||||||||||||
| Total finance lease cost | 4 | 5 | 6 | ||||||||||||||
| Operating lease cost | 157 | 150 | 142 | ||||||||||||||
| Short-term lease cost | 22 | 9 | 17 | ||||||||||||||
| Variable lease cost | 10 | 22 | 3 | ||||||||||||||
| Sublease income (1) | (3) | (3) | (5) | ||||||||||||||
| Total lease cost | $ | 190 | $ | 183 | $ | 163 | |||||||||||
(1)Sublease income excludes rental income from owned properties of $9 million, $9 million and $8 million for the years ended December 31, 2025, 2024 and 2023, respectively, which is included in other income, net.
There were no impairments of lease assets during the year ended December 31, 2025. During the year ended December 31, 2024, the Company recorded impairment charges of $14 million related to operating lease right-of-use assets that will no longer be in use during the remaining lease terms, which was recorded within cost of sales in the consolidated statements of operations. During the year ended December 31, 2023, the Company recorded an impairment charge of $10 million related to an operating lease right-of-use asset in Ukraine that will no longer be in use during the remaining lease term, which was recorded within cost of sales in the consolidated statements of operations.
Supplemental cash flow and other information related to leases was as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows for finance leases | $ | — | $ | 1 | $ | 1 | |||||||||||
| Operating cash flows for operating leases | $ | 152 | $ | 143 | $ | 134 | |||||||||||
| Financing cash flows for finance leases | $ | 4 | $ | 5 | $ | 5 | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | $ | 86 | $ | 54 | $ | 94 | |||||||||||
| Finance leases | $ | 1 | $ | 2 | $ | 1 | |||||||||||
Supplemental balance sheet information related to leases was as follows:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (dollars in millions) | |||||||||||
| Operating leases: | |||||||||||
| Operating lease right-of-use assets | $ | 501 | $ | 495 | |||||||
(Note 8) | $ | 142 | $ | 124 | |||||||
| Long-term operating lease liabilities | 401 | 412 | |||||||||
| Total operating lease liabilities | $ | 543 | $ | 536 | |||||||
| Finance leases: | |||||||||||
| Property and equipment | $ | 28 | $ | 25 | |||||||
| Less: accumulated depreciation | (22) | (18) | |||||||||
| Total property, net | $ | 6 | $ | 7 | |||||||
(Note 11) | $ | 4 | $ | 4 | |||||||
(Note 11) | 4 | 5 | |||||||||
| Total finance lease liabilities | $ | 8 | $ | 9 | |||||||
| Weighted average remaining lease term: | |||||||||||
| Operating leases | 5 years | 6 years | |||||||||
| Finance leases | 2 years | 3 years | |||||||||
| Weighted average discount rate: | |||||||||||
| Operating leases | 4.00 | % | 4.50 | % | |||||||
| Finance leases | 4.25 | % | 4.50 | % | |||||||
Maturities of lease liabilities were as follows:
| Operating Leases | Finance Leases | ||||||||||
| (in millions) | |||||||||||
| As of December 31, 2025 | |||||||||||
| 2026 | $ | 160 | $ | 4 | |||||||
| 2027 | 133 | 2 | |||||||||
| 2028 | 98 | 1 | |||||||||
| 2029 | 61 | 1 | |||||||||
| 2030 | 47 | — | |||||||||
| Thereafter | 103 | — | |||||||||
| Total lease payments | 602 | 8 | |||||||||
| Less: imputed interest | (59) | — | |||||||||
| Total | $ | 543 | $ | 8 | |||||||
As of December 31, 2025, the Company has entered into additional operating leases, primarily for real estate, that have not yet commenced of approximately $50 million. These operating leases are anticipated to commence primarily in 2026 with lease terms of to ten years.
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 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.