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Derivatives And Hedging Activities | 3 Months Ended
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Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | 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 March 31, 2022, 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 | 87,603 |  |  | pounds |  | $ | 405 |
Foreign Currency | Quantity Hedged |  | Unit of Measure |  | Notional Amount (Approximate USD Equivalent)
| (in millions)
Mexican Peso | 17,116 |  |  | MXN |  | $ | 855 |
Chinese Yuan Renminbi | 3,179 |  |  | RMB |  | 500 |
Euro | 205 |  |  | EUR |  | 225 |
Polish Zloty | 587 |  |  | PLN |  | 140 |
Hungarian Forint | 20,326 |  |  | HUF |  | 60 |
As of March 31, 2022, Aptiv has entered into derivative instruments to hedge cash flows extending out to March 2024. Gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated 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 March 31, 2022 were $61 million (approximately $61 million, net of tax). Of this total, approximately $48 million of gains are expected to be included in cost of sales within the next 12 months and approximately $13 million of gains 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. Cash flows from derivatives used to manage commodity and foreign exchange risks designated as cash flow hedges are classified as operating activities within the consolidated statements 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 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. Gains and losses reported in accumulated OCI 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 statements of cash flows. The Company has entered into a series of forward contracts, each of which have been 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 three months ended March 31, 2022 and 2021, the Company paid $1 million and $1 million, respectively, at settlement related to this series of forward contracts which matured during the period. In March 2022, the Company entered into forward contracts with a total notional amount of 1.4 billion RMB (approximately $215 million, using March 31, 2022 foreign currency rates), which matured in April 2022 and were subsequently extended to June 2022. Refer to the tables below for details of the fair value recorded in the consolidated balance sheets and the effects recorded in the consolidated statements of operations and consolidated statements 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 8. 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 three months ended March 31, 2022 and 2021, $29 million and $63 million of gains, respectively, were recognized within the cumulative translation adjustment component of OCI. Included in accumulated OCI related to these net investment hedges were cumulative losses of $8 million and $37 million as of March 31, 2022 and December 31, 2021, respectively. 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 statements of operations. Fair Value of Derivative Instruments in the Balance Sheet The fair value of derivative financial instruments recorded in the consolidated balance sheets as of March 31, 2022 and December 31, 2021 are as follows:
| Asset Derivatives |  | Liability Derivatives |  | Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
| Balance Sheet Location |  | March 31, 2022 |  | Balance Sheet Location |  | March 31, 2022 |  | March 31, 2022
| (in millions)
Derivatives designated as cash flow hedges: |  |  |  |  |  |  |  |
Commodity derivatives | Other current assets |  | $ | 38 |  |  | Accrued liabilities |  | $ | — |  |  |
Foreign currency derivatives* | Other current assets |  | 26 |  |  | Other current assets |  | 17 |  |  | $ | 9 |
Foreign currency derivatives* | Accrued liabilities |  | 8 |  |  | Accrued liabilities |  | 11 |  |  | (3) |
Commodity derivatives | Other long-term assets |  | 11 |  |  | Other long-term liabilities |  | — |  |  |
Foreign currency derivatives* | Other long-term assets |  | 8 |  |  | Other long-term assets |  | 3 |  |  | 5 |
Foreign currency derivatives* | Other long-term liabilities |  | 1 |  |  | Other long-term liabilities |  | 6 |  |  | (5) |
Derivatives designated as net investment hedges: |  |  |  |  |  |  |  |
Foreign currency derivatives | Other current assets |  | — |  |  | Accrued liabilities |  | 1 |  |  |
Total derivatives designated as hedges |  | $ | 92 |  |  |  |  | $ | 38 |  |  |
| Asset Derivatives |  | Liability Derivatives |  | Net Amounts of Assets and (Liabilities) Presented in the Balance Sheet
| Balance Sheet Location |  | December 31, 2021 |  | Balance Sheet Location |  | December 31, 2021 |  | December 31, 2021
| (in millions)
Derivatives designated as cash flow hedges: |  |  |  |  |  |  |  |
Commodity derivatives | Other current assets |  | $ | 27 |  |  | Accrued liabilities |  | $ | — |  |  |
Foreign currency derivatives* | Other current assets |  | 15 |  |  | Other current assets |  | 9 |  |  | $ | 6 |
Foreign currency derivatives* | Accrued liabilities |  | 5 |  |  | Accrued liabilities |  | 16 |  |  | (11) |
Commodity derivatives | Other long-term assets |  | 2 |  |  | Other long-term liabilities |  | — |  |  |
Foreign currency derivatives* | Other long-term assets |  | 2 |  |  | Other long-term assets |  | 1 |  |  | 1 |
Foreign currency derivatives* | Other long-term liabilities |  | 1 |  |  | Other long-term liabilities |  | 8 |  |  | (7) |
Derivatives designated as net investment hedges: |  |  |  |  |  |  |  |
Foreign currency derivatives | Other current assets |  | — |  |  | Accrued liabilities |  | 1 |  |  |
Total derivatives designated as hedges |  | $ | 52 |  |  |  |  | $ | 35 |  |  |
Derivatives not designated: |  |  |  |  |  |  |  |
Commodity derivatives | Other current assets |  | $ | 5 |  |  | Accrued liabilities |  | $ | — |  |  |
Foreign currency derivatives* | Accrued liabilities |  | — |  |  | Accrued liabilities |  | 1 |  |  | (1) |
Total derivatives not designated as hedges |  | $ | 5 |  |  |  |  | $ | 1 |  |  |
* 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 March 31, 2022 and December 31, 2021. Effect of Derivatives on the Statements of Operations and Statements of Comprehensive Income The pre-tax effect of derivative financial instruments in the consolidated statements of operations and consolidated statements of comprehensive income for the three months ended March 31, 2022 and 2021 is as follows:
Three Months Ended March 31, 2022 | Gain (Loss) Recognized in OCI |  | Gain Reclassified from OCI into Income
| (in millions)
Derivatives designated as cash flow hedges: |  |  |
Commodity derivatives | $ | 31 |  |  | $ | 11 |
Foreign currency derivatives | 19 |  |  | — |
Derivatives designated as net investment hedges: |  |  |
Foreign currency derivatives | (2) |  |  | — |
Total | $ | 48 |  |  | $ | 11 |
| Loss Recognized in Income
| (in millions)
Derivatives not designated: |
Foreign currency derivatives | $ | (3) |
Total | $ | (3) |
Three Months Ended March 31, 2021 | Gain (Loss) Recognized in OCI |  | Gain Reclassified from OCI into Income
| (in millions)
Derivatives designated as cash flow hedges: |  |  |
Commodity derivatives | $ | 34 |  |  | $ | 19 |
Foreign currency derivatives | (23) |  |  | — |
Derivatives designated as net investment hedges: |  |  |
Foreign currency derivatives | 1 |  |  | — |
Total | $ | 12 |  |  | $ | 19 |
| Gain (Loss) Recognized in Income
| (in millions)
Derivatives not designated: |
Commodity derivatives | $ | 1 |
Foreign currency derivatives | (2) |
Total | $ | (1) |
The gain or loss recognized in income for designated and non-designated derivative instruments was recorded to cost of sales and other income (expense), net in the consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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